Issue - meetings

The purpose of this report is to inform members of the Audit and Governance Committee about irregularity investigations and proactive counter fraud work undertaken by Internal Audit in the first half of this financial year from 1 April to 30 September 2015.

Declarations of interest:

None.

Witnesses:

Reem Burton, Lead Auditor

David John, Audit Performance Manager

Key points raised during the discussion:

1.    The Lead Auditor introduced the report and highlighted the increase in the number of irregularity investigations which she suggested was due to the promotion work that had been undertaken.  Many of the investigations were relatively quick and focused on the provision of advice to improve controls.

2.    The committee was informed that in the case of the payment of £97k made in response to a fraudulent letter claiming a change of bank details for a council supplier, £70k had been recovered.

3.    Members asked if officers could give any assurance that other large frauds had not happened.  The Lead Auditor stressed the fraud prevention work undertaken and the annual audits of key financial controls.  She pointed out that a list of all suppliers is publicly available due to transparency rules, making it easy for fraudsters to create invoices.  Reasonable assurance could be given that controls are in place.  In response to a suggestion that demands for payment be made both electronically and in paper, the Director of Finance stated that this would not prevent fraud.  However, a new invoicing system was being implemented.  Officers informed Members that this particular fraud had highlighted that counter-fraud activities had been focussing on the more sophisticated ends of the process rather than the basics.  Counter-fraud work would now go back to basics and not assume knowledge. 

4.    Counter-fraud officers would be working with schools to improve their controls.  It was confirmed that governing bodies have to take responsibility for any loss through fraudulent activity.

5.    In response to a query about the investigation in the Chief Executive’s Office, officers confirmed that the case had not been proven.

Action/Further information to note:

None.

RESOLVED:

The committee NOTED the report.