Appendix A: Risks to the integrity of HB and CTB
Introduction
Managing a benefit-paying system carries risks of:
- customer information getting into the wrong hands
- benefits staff making fictitious claims for their personal gain
- misuse of IT systems
- errors leading to incorrect payments
- fraud being committed
- theft of information or official property.
Management has a responsibility to minimise the risks associated with paying benefit. For example, one of the key defences against internal fraud is to ensure separation of duties, so that no assessor can put a claim into payment unaided. Collusion is harder to guard against and detect, but some defences are possible.
Lambeth’s benefit administration is very poorly managed and over the years this has resulted in excessive delays and significant backlogs of work. This in turn has increased the number of errors and created confusion and uncertainty for claimants and their landlords. These problems have made it more difficult to identify frauds and attempted frauds.
Findings
This appendix provides a summary of our findings relating to the risks to the integrity of HB and CTB from the start of a claim and throughout its life. We have also outlined the risks to Lambeth associated with our findings and set out in Figure A.1 the improvements required.
Much of the risk associated with the payment of benefit can be reduced if processes are introduced, implemented and managed. As well as reducing the opportunity for fraud and error, management can offer greater assurance on the accuracy and integrity of the benefit paid.
Risk |
Associated risk to Lambeth |
Improvement required |
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Benefit records |
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The current filing system:
There is an abundance of duplicate files. Lambeth does not record the number of duplicate files that are created either clerically or by noting the IT system. Lambeth does not control requests for further information. |
Inaccurate awards of benefit. Poor use of resources searching for records. Poor customer service – delays in responding to enquiries. |
Proposals for the introduction of a new system to be rigorously pursued and implementation of the new system thereafter as soon as reasonably practicable. |
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Post opening |
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The procedures adopted by Lambeth are not robust and secure and do not provide assurance for either the management or staff conducting post opening. |
Items of value are lost and fraudulent documents enter the system. |
Secure and robust procedures to be introduced to protect the public from fraud and staff against suspicion. |
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Claim forms |
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The HB/CTB claim forms used by Lambeth are poorly designed and poorly written. |
All information needed to determine a claim is not obtained at the outset of the claim. |
Claim forms to be redesigned and improved. |
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Verification |
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Lambeth does not adopt a systematic approach to verifying information in new and renewal claims. In particular we found that Lambeth:
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Staff do not routinely sign each document to endorse that it has been checked and verified in line with the LA’s verification procedures. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX |
Inaccurate awards of benefit from the start of a claim and throughout its life leading to overpayments and re-working on claims. |
Verification procedures to be reviewed and staff trained on the LA’s requirements on the standards of acceptable evidence. |
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Visiting |
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XXXX XXXX XXXX XX XXXX XXXX XXXX XXX |
XXXX XXXX XXXX XXXX XXX |
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Management checks |
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There is no systematic checking regime within the assessment teams. There is no systematic checking regime within the determination team. Outcomes of checks are not reported to management or used to inform on future training needs. |
Inaccurate awards of benefit and internal fraud. No assurance that procedures are being followed and performance is meeting agreed standards. Training needs of staff are not identified. |
Procedures to be developed and implemented for a robust checking regime allowing flexibility for new staff and for staff whose work is falling below standard. |
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Assessment and determination |
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There are no procedures to ensure:
Straightforward changes of circumstances are assessed without the claimant’s file. |
Inaccurate awards of benefit – payments are made illegally. Internal fraud – there are no controls or measures in place to deter or prevent staff setting up, assessing and paying fictitious claims. |
Procedures for controlling the assessment and determination of claims to be devised and implemented. This should include inhibiting claims until a determination officer is satisfied that the claim has been assessed correctly and accurately. |
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Working with the Rent Officer |
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There is no control over the referrals made by Lambeth. It has illegally allowed Capita the responsibility for referrals. There are delays throughout the whole referral process. |
Illegal and inaccurate awards of benefit in high rent claims or properties that are under occupied. |
Procedures to be developed adhering to legal requirements. |
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Renewal claims |
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There is no follow-up action on renewal claim forms that are not returned. |
Fraudulent claims are not identified. The more vulnerable people are not given an opportunity to continue to receive HB and CTB. |
Procedures to deal with the non return of renewal claims to be introduced. |
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Risk analysis and benefit periods |
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Lambeth has not completed any form of risk analysis to determine benefit periods. CAFT does not share information about the work it undertakes to establish risk. Limited guidance on the setting of benefit periods. Benefit periods are not tailored to reflect the circumstances of the claim. |
Inaccurate awards of benefit – risks associated with different types of claim are not effectively managed. |
Guidance on setting benefit periods to be revised and account taken of risks associated with the types of claims paid by the LA. |
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Changes of circumstances |
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There are delays in actioning changes of circumstances. The exact date of the change in the circumstances is not established. |
Inaccurate awards of benefit and creation of avoidable overpayments. |
Training on dealing with changes of circumstances to be provided to all staff. |
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Working with landlords and HAs |
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There is no formal liaison with landlords or HAs. In particular:
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Working with the Housing department |
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There is no formal liaison with the HD. In particular:
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Poor use of resources. Incorrect awards of benefit. |
HD and benefits section to work in partnership to improve liaison and accuracy of awards of benefit and rates of rent collection. |
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Payment security |
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XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
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XXXX XXXX XXX |
XXXX XXXX XXXX XXXX XXXX |
IT security |
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There are weaknesses in the security of the IT system. In particular:
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Internal fraud and a lack of security of personal data. |
IT security policy to be devised and introduced to reduce the opportunity for internal fraud and improve the security of personal data. |
IT – maximising potential |
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Lambeth fails to maximise the potential of the IT system. In particular:
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Ineffective administration and poor quality management information. |
Use of IT system to be maximised to improve administration of benefit. |
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Fraud detection |
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The procedures adopted by assessment staff and call centre staff mean that opportunities to investigate allegations of fraud are not pursued. There is no feedback loop for staff at the call centre to be informed of the outcome of fraud investigations. The fraud hotline is ineffective. |
Fraud is not investigated – payments continue to be made incorrectly. |
Fraud referral process to be streamlined and made less cumbersome. Procedures for continuous feedback on fraud investigations to be introduced. Procedures for utilising information from the hotline to be revised. |
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Overpayments |
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Lambeth’s management and control of overpayments is ineffective. In particular not all means of recovery are used. |
Inaccurate awards of benefit are not recovered – there is no deterrent for claimants. |
An overpayment recovery plan is devised. |
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Building access |
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XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX X XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX |
XXXX XXXX XXX XXXX XXXX XXXX XXXX |
XXXX XXXX XXXX XXXX XXX |
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Staff vetting |
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Internal fraud – staff may join Lambeth with the intention of perpetrating fraud. |
Rigorous propriety checks to be conducted for all new staff including for example, obtaining and following up references, signing declarations of interest. |
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Management information |
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Lambeth relies on manually compiled statistical information to control and manage assessment work. Lambeth does not routinely:
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Poorly managed benefit administration leading to delays in identifying and responding to backlogs and errors. |
IT system to be maximised to provide accurate management information so that the state of work is continuously assessed and progress towards performance targets can be monitored. |
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Caseload management |
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There is no separation of duties. |
Internal fraud – an assessor can put a claim into payment unaided. |
Controls to be introduced to ensure staff. |
There are no procedures for dealing with sensitive cases e.g. friends/relatives. |
Internal fraud – staff are able to influence the amount of benefit awarded. |
Procedures to be developed for dealing with sensitive cases. |
Source: BFI inspection of Lambeth
Conclusions
Lambeth’s management of the administration of HB and CTB is very poor and our inspection has highlighted that there are significant weaknesses in the processes to reduce the opportunities for fraud and error to enter the system. Management has failed to ensure that security forms an integral part of the administration of HB and CTB.