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CONTENTS
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BACKGROUND
1 Fraud is a significant risk to the public sector. The government estimated that between £33.2 and £58.8 billion of public spending was lost to fraud in 2020/21[1]. Financial loss due to fraud can reduce a council’s ability to support public services and can cause reputational damage.
2 Veritau provides a corporate fraud service to the council which aims to prevent, detect and deter fraud and related criminality. We use qualified criminal investigators to support departments with fraud prevention, proactively identify issues through data matching exercises, and investigate any suspected fraud found. To deter fraud, offenders face a range of outcomes, including prosecution in the most serious cases.
3 The purpose of this report is to summarise counter fraud activity in 2022/23. The report also updates the Audit and Governance Committee on whistleblowing reports received during the year.
KEY PERFORMANCE FIGURES
4 Veritau helped the council to achieve £273k in savings in 2022/23, against an annual target of £200k.
5 We received over 319 referrals of suspected fraud during the year including reports from the public, council staff, external agencies, and issues identified through proactive exercises. Over 145 investigations were completed in 2022/23 with successful outcomes[2] achieved in 50% of cases. We also conducted verification exercises in respect of 54 applications for Right to Buy and school placements.
6 One council property was recovered, five people were cautioned, six internal fraud investigations were completed, two mandate fraud attempts were prevented, and warnings were issued to 31 people.
7 A detailed summary of performance can be found in appendix A, below.
ANALYSIS OF RESULTS
8 Veritau has an annual target of £200k to achieve in fraud related savings. These savings comprise the repayment of debt arising following investigative work, a maximum of one year future savings if an investigation has stopped an ongoing fraud that would otherwise have continued, and the prevention of any one-off payments that would have been made without our intervention, eg a right to buy discount. The chart below shows the areas where savings were achieved in 2022/23.
9 Over the past six years Veritau has helped the council to achieve £1.7 million in counter fraud savings, increasing to £1.9 million including savings associated with Covid-19 grants.
WHISTLEBLOWING
10 Veritau supports the council’s whistleblowing processes and has had overall responsibility for the policy since 2018. We work with council colleagues within the Human Resources department to ensure that all concerns raised are dealt with appropriately. We regularly raise awareness of the policy with all council employees including annual publicity for World Whistleblowers’ Day in June. In 2022 two whistleblowing training sessions were delivered to over 30 council managers. The training reinforced the guidance and processes contained in the council’s whistleblowing policy.
11 Veritau has developed an e-learning training package covering whistleblowing which is accessible to all employees. In 2022/23 over 30 employees accessed this training. Veritau is currently developing updated e-learning packages for both employees and managers which are expected to be released in 2023/24.
12 The figure below shows the number of whistleblowing reports recorded over the past six financial years – 19 in total.
13 The following figure details the categories of whistleblowing reports received over the same period.
14 One whistleblowing report was received in 2022/23 which related to working relationships. An investigation into this concern is still ongoing.
15 Two whistleblowing investigations were completed in 2022/23. The first involved concerns around the disposal of sensitive items from two council properties. An investigation took place which found no evidence to suggest that anything had been improperly disposed of, however recommendations were made to improve procedures. The second concern related to potential theft from the council. The subsequent investigation did not find any evidence to suggest that theft had occurred.
COUNTER FRAUD MANAGEMENT
16 Veritau undertakes a range of non-investigative activity to support the development of counter fraud arrangements at the council. In January 2023 an annual review of the counter fraud framework was undertaken and presented to the Audit and Governance Committee. The council’s Counter Fraud and Corruption Strategy Action Plan was updated with new actions and an updated Fraud Risk Assessment was presented.
17 Raising awareness of fraud amongst council staff and the public is an important function of the counter fraud team. Awareness campaigns were undertaken to mark International Fraud Awareness Week and International Anti-Corruption Day in November and December 2022 respectively. In addition, specific training was provided to members of staff within the adult social care, human resources, customer services, parking and housing departments during 2022/23.
18 Cybercrime is considered to be a high risk area for the council. In 2021/22 the council was targeted by two serious mandate fraud (also known as payment diversion) fraud attempts. Two more attempts were detected in 2022/23. No losses occurred as a result of these incidents, however Veritau has worked alongside the council to raise awareness of the threat of cybercrime, how to spot it, and how to prevent it from happening. Awareness was raised with all employees in October 2022 as part of Cyber Security Awareness Month. Bespoke training has also been delivered to council staff in charge of administering payments to suppliers.
19 An anti-fraud message was included with annual council tax and business rates billing in March 2023. This raised awareness of fraud against the council and provided information on how to report concerns to Veritau.
20 Veritau also ensures that the council meets its legal obligations. We manage work connected to the National Fraud Initiative, an exercise run by the Cabinet Office, in which council participation is mandatory. We also provide annual transparency data for publication by the council.
21 Veritau’s counter fraud team represents the council at regional and national counter fraud groups. Veritau participates in regular meetings of the Yorkshire and Humber Counter Fraud Group. The team represents the council and supports a regional Tenancy Fraud Forum by acting as vice-chair. Veritau also participates in and chairs a national Fighting Fraud and Corruption Locally working group examining issues surrounding adult social care fraud.