Agenda item

Mr Morris presented the update report.

Grant Certification (Appendix 1)

Audit work on Housing Benefit (HB) claims is done on behalf of the Department for Work and Pensions. There is no materiality in relation to HB, so all discrepancies have to be reported. A large number of issues had arisen in relation to HB claims in previous years, and Grant Thornton had agreed with the Council to provide training to officers processing HB claims to try to address the issues. It had been agreed that the training would be provided free of charge, provided that the number of errors decreased year on year. Unfortunately the number of errors identified this year had not decreased, so there would be an addition to the audit fee of £1,895 to cover the cost of the training. DWP had been concerned, particularly about the lack of sufficient evidence in relation to pensions, which could have resulted in a drawback of over £100,000. The Council undertook further work to find more evidence, which was reviewed by Grant Thornton, resulting in a reduction in the extrapolated error to £43,008. The Council must focus on improving its handling of HB claims.

A Member expressed concern that the report might give an unduly pessimistic picture of the Council’s performance in relation to HB claims; a total error of £100k in relation to total was actually very small. It might be more expensive to recruit additional staff. He hoped that the problem would be reported and addressed in a proportionate manner.

Mr Morris agreed that the quantum might appear small, but there were a large number of transactions and a number of different areas of the process where problems were found, on a relatively small sample. In addition, the error figure related only to overpayments; there was no figure for underpayments, which could impact severely on recipients of HB.

The Head of Audit West stated that it was clearly disappointing that despite the free training offered by Grant Thornton, the number of HB errors had actually increased. The service had written to DWP setting out a number of actions that they were taking which can be shared with the committee, which was positive, but we could not give a categoric assurance to the Committee that errors would not re-occur. The DWP had written to the Council and had requested recovery of the overpaid subsidy.

A Member said that it was important for the Committee to receive a detailed report from the service about the problems and the actions being taken to address them. There could be an increase in unjustified claims if the perception developed that applications for HB were not adequately checked. Underpayments were as great a cause of concern as overpayments. Another Member said that it was important for the Committee to understand that the external auditors had an obligation to make extrapolations of potential losses from their sample testing. If there were issues relating to training and expertise in the service, it was important that the head of service should acknowledge them and explain to the Committee how he would address them.

It was agreed that the head of service should be invited to attend the next meeting of the Committee and present a report.

External Audit Plan for Council (Appendix 2)

In response to a question from a Member Mr Morris explained that historic assets and investment assets were valued by the same team in the Council, but on a different basis. The external auditor checked to see whether the appropriate basis was applied.

He said that the external auditors were aiming to complete the audit on the 2016/17 accounts by July.

The Audit Manager reported that Internal Audit had carried out a review of iTrent System Administration and Security. This had been rated at level 3 (satisfactory) and 15 recommendations had been made. Management had responded positively and agreed to implement all the recommendations.

Mr Morris presented the External Audit Plan for the Pension Fund and the External Audit Update.

RESOLVED to note the report.