Agenda item

Report of Lucy Cater, Head of Internal Audit and Assistant Director, SWAP Internal Audit Services

Lucy Cater (LC) of SWAP presented the regular update on internal audit work undertaken since the last meeting, highlighting the three reports in the pack:  Voids Review, Homelessness Deposit Rent Scheme, and Members’ Allowances.  She said the agreed actions are being followed up by the Governance, Risk and Assurance Manager and the SWAP team on behalf of the council.

In response to a request for further information, she said that the Void Process Report had been requested by the Director of Governance, Housing and Communities,  following issues identified at CBH before the transfer. In response to a question from the Chair as to how long issues may take to be resolved; the Deputy Chief Executive confirmed that there will be a full Member update on housing on 23 June, but reminded Members that while he understood their concerns, it should be remembered that the council can only act on what it knows; independent auditors are able to look at all areas. He said voids are a systematic issue in that the workforce needs to turn round minor and major voids; the team is working with interims and new staff to get processes in place to ensure the council is complying with issues such as procurement, consumer standards, and health and safety.  This will take time, but officers can give intermediate assurance that a lot of work is taking place in the background to resolve the issues. The Chair looked forward to having reassurance at the next meeting in July that discussions and processes are in place.

Other Members expressed strong concerns about this issue and the apparent lack of effective controls in all areas, suggesting that it needs to be a massive priority to take action and provide evidence as soon as the appropriate control environment is in place and operating effectively. LC confirmed that a full update and more information on the agreed actions will be provided at the next meeting.

On the subject of homelessness deposits, a Member was concerned that if we don’t know how much recipients have paid against their advance, there could be a risk of someone overpaying if not told to stop their regular monthly payments.  He also wondered if giving non-refundable grants would solve this issue and take away a lot of admin costs at the same time.

LC said homelessness deposits are considered as loans, with repayments being recycled to allow someone else to benefit.  They are not considered as grants but her team could do a piece of work to look at what the Member is suggesting.  The Deputy Chief Executive made the point that if these payments became grants, they would have to be funded from local taxation via a new pot of money, and would have to come forward as part of budget proposals rather than as a recommendation from internal audit. The Director of CFEU added that this would also introduce the risk of fraud – repayment is more of a deterrent than free money via a grant scheme, which would also require an admin function to verify that the right people were getting the right money.

The Member pointed out that the council needs to comply with the Consumer Credit Act and is subject to statutory regulations through its activities; LC confirmed that she would email the Member figures to show how much money was outstanding at any point in time, and how many people were involved.

In response to further questions raised by a Member, LC and EC confirmed that:

-       returning to the Voids Review, and whether any checks were carried out to ensure that particular contractors hadn’t billed for work that wasn’t carried out, CFEU has done a lot of background work on invoices but to get a case to a criminal standard, the council cannot undermine its own defence and must be pragmatic about resources and what it does or doesn’t do;

-       there have been no referrals for members’ allowances, and any irregularities are more likely to be in error rather than fraudulent.  Officers will be required to challenge any claims presented without receipts going forward; 

-       with reference to the Priority 1s on Page 65, No. 6205 has the wrong date and should have a timescale of 30 June like the others; more text will be provided next time.

No vote was required on this item.