An inspectorate of the Department for Work and Pensions.

Report

Charter Mark - Awarded for excellence

Resource management

5.1 Benefits administration has to be set within the broader context of a council’s overall strategies and responsibilities. Members, managers and staff should, therefore, have a clear sense of direction, purpose and focus for their work. Members and senior officers should also have assurance that HB and CTB administration is effective and secure.

5.2 The council met 5 of the 16 enablers for Resource management.

Strategic management

5.3 To ensure the successful delivery of strategic aims and objectives, Members and senior officers should provide managers and staff with a clear sense of direction, purpose and focus for their work.

Performance enablers

Managing the Benefits service

5.4 Bath and North East Somerset Council met one enabler (E51) of the 3 enablers.

5.5 The council had a number of documents setting out the strategic direction that it wished to take. The Bath and North East Somerset Corporate Plan set out its priorities for improvement to 2007. The Community Strategy for Bath and North East Somerset, 2004 and beyond – BE: Better for everyone included 5 shared and 6 improvement ambitions. The shared ambitions set out how the council would work with other stakeholders and the improvement ambitions outlined the areas to be improved. Neither of these documents contained any direct references to the Benefits service.

5.6 These strategy documents were supported by the 2005-2006 Best Value Performance Plan. This plan contained a number of targets for the Benefits service that focused mainly around Best Value Performance Indicators. These targets were also included in the operational plan for the Benefits service the Approved Service and Resource Plan 2005-2006, which was agreed by Members.

5.7 Neither of these documents contained a comprehensive set of targets that covered all aspects of the Benefits service. For example they did not include targets for the:

5.8 Members and senior managers received regular monitoring reports on the high level strategic plans. The Head of Revenues and Benefits had regular meetings with the Director of Resources to discuss performance against targets. In addition, the Director of Resources had fortnightly meetings with the Member who was the portfolio holder for Benefits.

5.9 The focus of these meetings was on progress towards clearing the backlog of claims. The significant deficiencies in other aspects of the performance of the Benefits service were not addressed. For example, although the low number of successful fraud investigations and sanctions applied was reported, no action had been taken to address this. Nor was the underlying issue around the lack of senior management support and direction for the Investigations and Visiting Team identified as a key area to be addressed.

5.10 We also found that the structure of the Benefits service could potentially have led to ineffective management of the service. As the organisational chart in Executive summary shows the Benefits Team Leaders reported to all 3 Strategic Managers. However, Strategic Managers did not have individual responsibilities for the day-to-day operational management of key aspects of the Benefits service. For example, none of them had a specific responsibility for the Investigations and Visiting Team or for ensuring that benefits processing work was progressing to meet targets.

5.11 The council did not have arrangements in place to manage all risks. We were told that a corporate disaster recovery plan was in place, but it was the responsibility of individual service heads to develop their own disaster recovery and business continuity plans.

5.12 The Benefits service did not have an up-to-date business continuity or disaster recovery plan. The Revenue and Benefits service contingency plan developed in 2001 covered:

5.13 However, it had not been revised since its development and it did not contain a disaster recovery plan. Most staff we spoke to were unaware of its existence.

Monitoring performance

5.14 Bath and North East Somerset Council met neither of the enablers.

5.15 The council provided timely returns to the Department on management information, Best Value Performance Indicator data and Housing Benefit Matching Service data. It had also submitted self-assessments against Performance Standards as requested.

5.16 The self-assessment submitted at the end of the first quarter of 2005/06 did not match the findings of our inspection. In its self-assessment, the council said that it met 54 (83%) of the 65 enablers. Our assessment of its performance showed that it had only met 19 (29%) of the enablers. We were concerned that it was providing an inaccurate picture of its performance to the Department, its Members and senior managers. (See Recommendation 9.)

5.17 We also found there to be inaccuracies and omissions in the data provided to the Department. We report on this further under data validation in this section.
(See Recommendation 9.)

5.18 The council had also failed to provide data for performance measure 2 for the first 3 quarters of 2005/06.

Providing for a skilled and competent workforce

5.19 Bath and North East Somerset Council met one (E55) of the 2 enablers.

5.20 The Benefits service had recently recruited 8 new staff and had provided comprehensive induction and a 13-week training course. This was jointly funded by the Department’s Performance Standards Fund and the council.

5.21 There was a detailed recruitment process, including an assessment centre and interview. Pre-appointment checks were undertaken on references provided. New and existing staff were required to make annual declarations of interest which were circulated by e-mail and completion against deadlines monitored.

5.22 There was no structured ongoing training programme in place. A Training and Development Officer, appointed in July 2005, had developed an induction package and also diversity and equality training. This officer had started to develop a number of training packages based on job specifications to cover the whole range of Benefit activities. We were told this would be completed by September 2006. (See Recommendation 12.)

5.23 The council had an annual appraisal scheme with quarterly supervision meetings that were used to discuss the speed and quality of performance and set targets.

Value for money

5.24 Although there is no definitive costing structure for benefits administration, councils should consider Departmental guidance that covers efficiency.

Performance enablers

Achieving value for money

5.25 Bath and North East Somerset Council met both enablers.

5.26 The council was a member of the Chartered Institute of Public Finance Accountants benchmarking group for benefits administration. It had submitted annual comprehensive costing information, which placed the council in the lower quartile for cost per claim.

5.27 The council had placed a great deal of emphasis on achieving this low cost per claim ratio, possibly to the detriment of other aspects of the service. In light of its poor performance in those areas highlighted during our inspection, it should reconsider the balance between cost and providing a secure and efficient Benefits service.

5.28 The council had established informal links with other councils in the area. This forum had been used to develop a revised claim form, which met the standards of the Department’s HCTB1, and a series of leaflets providing information for both customer groups and landlords in the area.

5.29 The council had also recently joined a local forum of volunteer organisations, the Bath Advisers Group, where local issues were discussed and resolutions sought.

IT systems

5.30 Bath and North East Somerset Council met one (E60) of the 2 enablers.

5.31 The Benefits IT system and document management system supported processing of claims and overpayment recovery and was capable of producing management information reports. For example, it was capable of producing reports that highlight cases approaching critical dates such as:

5.32 The document management system also allowed for analysis of the workload by case type and at individual Benefits Officer level.

5.33 Although this information was available, it had not been utilised until the backlog had been cleared in March 2006. We were told that as most cases fell outside the targets, the information would not have been useful to enable prioritisation of work.

5.34 The Investigations and Visiting team only used the fraud case management facility incorporated in the document management system to record cases. They did not use the management information reports available on the system.

5.35 The Benefits IT system interfaced effectively with council IT systems including council tax and rent accounts. However, there was no link with the sundry debtor’s system.

5.36 Contract arrangements with IT providers were monitored by the council’s Corporate IT Resources Group to ensure compliance with agreed standards of service. This took place on a monthly basis and included the monitoring of:

Assurance

5.37 Large numbers of HB and CTB payments pass through a council’s accounting and payment system. It is, therefore, essential that there are rigorous internal control mechanisms to provide assurance that the benefits system is secure.

Performance enablers

Internal control mechanisms

5.38 Bath and North East Somerset Council met none of the 3 enablers.

IT Security

5.39 The corporate IT team acted on instructions received from the Control Team and were responsible for adding and removing users from the IT systems. The Control Team managed password access to the IT systems. New users were prompted to change the default password when they first logged into the system and there was an automatic prompt to change their password every 60 days.

5.40 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX.

5.41 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX:

5.42 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX .

5.43 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX
(See Recommendation 1.)

5.44 Procedures were in place to test new IT system releases before they went on the live user environment. Effective procedures were also in place for reporting system faults.

Post opening

5.45 The council had documented post-opening procedures in place. However there was no process to regularly review them. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX XXXX XXXX XXXX XXXX.

5.46 Post was opened in a locked room with access restricted to members of the Administrative Team. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX.

5.47 All post was stamped with the date of receipt. Original documents were scanned onto the document management system and returned to customers by recorded delivery. The member of staff responsible recorded on the document management system that the document seen was original.

5.48 Effective procedures were in place for dealing with valuables and returned cheques at post opening.

5.49 Following our initial feedback the council reviewed its post opening practices and addressed all of the above issues. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXX XXXX XXXX XXXX.

Data validation

5.50 The council told us that it carried out a validation check on its new claims and changes of circumstances performance before it submitted its returns to the Department. However, we were concerned that this check was focused on specific weaknesses identified and cases that had taken a long time to process rather than a random sample across a whole quarter’s data. For example, we identified 9 cases where a payment on account had been made and found that in 6 of these performance had been incorrectly calculated. This would have resulted in performance being overstated by 8 days and these cases would not have been automatically selected using the council’s methodology.

5.51 We found 2 (7%) cases in our sample of 30 new claims that should have been recorded as changes of circumstances, and 8 (35%) cases in our sample of 23 changes of circumstances that should not have been included in reported performance. The council told us that the reason for the inaccurate recording of new claims and changes of circumstances on the Benefits IT system was user input error.

5.52 These issues raised doubts about the accuracy of the council’s reported Best Value Performance Indicators. (See Recommendation 9.)

Secure administration

5.53 Bath and North East Somerset Council met neither of the 2 enablers.

5.54 Internal Audit undertook a risk assessment of the Benefits service based on the CIPFA Risk Management in the Public Services model. It identified that the Benefits service was high risk. However, the last comprehensive audit of the Benefits service took place in 2001. This covered a range of benefits work including checking work practices for compliance with documented procedural guidance and legislative requirements. A further audit was undertaken in 2003. However, this only reviewed progress against the recommendations made in 2001. We were told that due to limited resources within Internal Audit, the audit work undertaken by them in 2005 on the Revenues and Benefits Service, focused only on overpayments. As a result, they where unable to provide assurance on any other aspect of the Benefits service.

5.55 Oversight of the work of Internal Audit in the council was undertaken by the Corporate Audit Committee, which was set up in July 2005. The committee was made up of Members and officials of the council and met quarterly. It received an annual report from Internal Audit that updated them on work undertaken. The committee did not receive copies of individual audit reports. Senior managers told us that it was hoped that that this new audit committee would raise the profile of audit activity, which had been quite low with Members in the past.

5.56 Progress on internal and external audit recommendations should have been monitored in two ways. Both internal and external audit would usually follow-up on recommendations not implemented at the next audit, or during the following 12 months. The progress on recommendations should also have been monitored by the Corporate Audit Panel. However, these procedures were not being adhered to.

5.57 Recommendations from the 2001 Audit report on the Revenues and Benefits Service had not been implemented by the 2005 audit. We were told that this was because priority had been given to clearing the backlog of benefits claims. Although Internal Audit had carried forward outstanding recommendations to subsequent audit reports, no action had been taken by them to ensure that the recommendations were implemented.

5.58 Such significant delays in implementing audit recommendations are unacceptable and when combined with the limited amount of audit activity being undertaken meant that the council had little assurance on the quality or the security of its Benefits service. (See Recommendation 10.)

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