Agenda item

This report informs Members about potential fraud risks that the Council is exposed to, and proposed activity to address those risks. The report also details a proposed new counter fraud and corruption policy, and a strategy, for the committee’s comments.

Members considered a report which gave details of potential fraud risks that the council is exposed to, and proposed activity to address those risks.  The report also detailed a proposed new counter fraud and corruption policy, and a strategy, for the committee’s comments.

Members were asked to comment on the counter fraud policy and corruption policy and associated prosecution policy at annex 1 of the report and on the proposed strategy at annex 2 of the report. They were also invited to comment on the fraud risk assessment and proposed priorities for counter fraud work as set out in annex 3.

The Head of Internal Audit was asked if there were sufficient resources in place to implement the policies.  He stated that he believed that the Council was doing everything possible and that the policies were based on best practice, including the Chartered Institute of Public Finance (CIPFA) guidance. He was satisfied that all reasonable steps were being taken to protect against fraud and that there was an appropriate level of resources.  If additional resources were to be made available it would, however, enable more proactive work to be carried out, including data matching.  The Head of Internal Audit stated that benchmarking was carried out with other local authorities and he was satisfied that the current allocation of time for fraud work was reasonable.  The benchmarking data indicated that York was performing well in respect of fraud reduction when compared with other local authorities.

Members sought assurances that effective mechanisms were in place to enable incidents of fraud to be reported.  They were informed that fraud reporting arrangements were publicised and campaigns held.  Members were informed that incidents of fraud were reported in several ways, including referrals from managers, staff and the public. 

Referring to the Fraud and Corruption Prosecution Policy (Annex A of the report), Members sought clarification as to the circumstances in which a prosecution would not be sought when incidents of fraud were identified.  Members were informed that the Council had a zero tolerance approach to fraud although there may be some circumstances when it would not be appropriate to prosecute.  The Internal Audit Team carried out the fraud investigations and made recommendations as to whether or not a prosecution should be sought.  The Director of Customer and Corporate Services made the final decision regarding prosecutions.  In response to questions from Members, the Director of Customer and Corporate Services stated that, in all cases to date, he had accepted the recommendation of the Internal Audit Team in respect of prosecutions.

[The press and public were excluded from the meeting whilst Members sought clarification from the Internal Audit Manager regarding several fraud areas detailed in Annex 3 of the report].

Resolved:  (i)      That the proposed new counter fraud and

corruption policy and associated prosecution policy, at annex 1 and annex 2, be noted.

(ii)      That the fraud risk assessment and proposed priorities for counter fraud work, as set out in annex 3 of the report, be noted.

Reasons:   (i)      In accordance with the committee’s responsibility

for assessing the effectiveness of the Council’s counter fraud arrangements.

(ii)      To ensure that scarce audit and counter fraud resources are used effectively.