Issue - meetings

The Head of Internal Audit presented a report to provide the Audit Committee with an update on the internal audit and counter fraud work undertaken and information on the outcome of Veritau’s recent external quality assessment.

The internal audit progress report was at Appendix 1 to the submitted report and included a summary of current work in progress, internal audit priorities for the year, completed work, and  follow-up of previously agreed audit actions.  

Two audits had reached draft report stage since the last progress report to Committee in December 2023.   The findings were currently being discussed with management in order to agree actions to address the issues identified.  Four audits had been finalised since the last report to Committee. The findings from three of the audits were summarised in Annex C to the submitted report.  A copy of the audit report on the Council’s acquisition of the former Crown public house was attached at Appendix 2 to the submitted report.

In relation to counter fraud, the team continued to focus on prevention measures and training, to ensure employees were alert to the risks and if they suspected fraud, to report it to Veritau.    Between 1 April 2023 and 31 January 2024, the counter fraud team received 93 referrals of suspected fraud.  These referrals covered potential council tax fraud, council tax reduction fraud, internal fraud, blue badge fraud, and debt evasion issues and were made by members of staff, the NFI, and the public.   Thirty-one investigations had been completed this year and there were currently twenty cases under investigation.  One person had been successfully prosecuted and four people have received formal warnings for fraud involving the council tax reduction scheme and council tax discounts.

Investigative work in 2023/24 had identified £55k of loss due to fraud and error.  The counter fraud team supported the Council to recover losses identified as part of investigations.  Counter fraud savings were also tracked by monitoring repayments to the Council and calculating the value of stopping ongoing frauds.  To date £39k of counter fraud savings had been identified.

The team also supported legal proceedings taken by the Council to recover £300k of outstanding business rates from a company with substantial commercial property holdings within Middlesbrough. The case was currently going through the court process. 

In relation to the report on acquisition of the former Crown public house the Auditor commented that the report looked back at events from the previous year and there were a number of recommendations to assist the Council to learn lessons and put appropriate processes in place.

Members discussed the issues raised in the report and sought assurance in relation to responsibility and accountability.  The Chief Executive commented that Councillors should be able to place reliance on the system of internal control.  The Council had a duty to ensure that taxpayers money was spent appropriately and that policies for acquisition and disposal of assets were adhered to.

AGREED that the information provided was received and noted.