Agenda item

The Head of Internal Audit, Veritau, presented a report to provide the Audit Committee with an update on the delivery of internal audit and counter fraud

work and on reports issued and other work completed since the last update report to Committee.

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

Good progress had been made since the last update.  Seven reports had been finalised and 3 reports were in draft.  One of the 3 draft reports – Homecare - had been finalised since this report was written.  

The final report on Middlesbrough Development Company was reported to the August meeting of the Corporate Affairs and Audit Committee.  Five of the final reports provided substantial or reasonable assurance.  The opinion on the Children’s Commissioning and Contract Management audit was limited and actions had been agreed with target dates.  The actions would be followed up to ensure they had been completed.

Annex E to the submitted report provided details of the follow up of agreed actions and one action has been completed since the last report to Committee.   This was a priority 3 action relating to the audit of the main accounting system.  A total of 18 actions with original due dates that had passed were still outstanding.   Of those 18, 15 had revised target dates agreed and the remaining 3 were being followed up.

Members asked questions in relation to the prioritisation of audits, the length of time taken to complete and overdue actions.  The purpose of Internal Audit was to help the Council and its managers to mitigate and manage risk.  Interna Audit focussed on areas that would be of most benefit to the Council and likely to be the most risky.

The counter fraud progress report was contained at Appendix 2 to the submitted report.  A range of work was detailed including activity to promote awareness of fraud, work with external agencies, and information on the level of fraud reported to date.

Veritau had worked with Human Resources to update the Council’s Whistleblowing Policy.  The updated policy was finalised in June 2023 and reflected national guidance and best practice as well as detailed guidance for managers on how to address whistleblowing concerns.  A central log of whistleblowing reports was now being maintained by Veritau.   With the support of the Communications Team, the revised Whistleblowing Policy was highlighted to all Council employees as part of World Whistleblowers’ Day on 23 June.

Middlesbrough had participated in a National Day of Action against Blue Badge fraud in June 2023, alongside 80 other councils. The exercise involved making checks on blue badges displayed in the town to determine if they were being properly used by legitimate badge holders.  The Counter Fraud and Neighbourhood Safety Teams worked together to check 38 badges on the day, which resulted in one penalty charge notice (PCN) being issued.  Nationally 5000 badges were inspected, 196 PCNs were issued, and 92 badges were seized.

Between 1 April and 31 August 2023, the counter fraud team received 47 referrals of suspected fraud.  These covered potential council tax fraud, council tax reduction fraud, internal fraud and debt recovery issues. Referrals had been made by members of staff, the NFI, and the public.  Ten investigations had been completed this year and there were currently 24 cases under investigation.

Investigative work in 2023/24 had identified £33k of loss to the Council to date.  The counter fraud team supported the Council to recover debts identified as part of investigations.  Counter fraud savings were also tracked by monitoring repayments to the Council and calculating the value of stopping ongoing fraud.  To date £11k of counter fraud savings had been generated.  Internal Audit tried to get best value for the Council by prioritising high value frauds to investigate.  Amounts recovered would continue to be collected, sometimes through repayment plans that could take a number of years, or potentially from a person’s assets.

AGREED that the information provided was received and noted.