Executive summary

Background

1.1 This report assesses Broadland District Council’s Security arrangements. We have limited the scope of this inspection to those Performance Standards’ components that have a direct impact on Broadland District Council’s Security performance, including its counter-fraud work.

1.2 This report should be read in conjunction with the Performance Standards pack, which can be downloaded from the Department for Work and Pensions’ (the Department) website at: http://www.dwp.gov.uk/housingbenefit/publications/perf-stands/index.asp.

1.3 In December 2006, the Parliamentary Under Secretary of State for Work and Pensions announced a programme of inspections designed to target specific areas of benefits administration and security activity.

1.4 Broadland District Council was selected for an inspection of its security arrangements through the Department’s risk engagement process.

1.5 The Head of Revenues, supported by the Benefits Manager, were responsible for the day-to-day running of the Benefits service and counter-fraud operation.

1.6 In 2006/07 the council’s Housing Benefit (HB) and Council Tax (CTB) expenditure was £17,949,870 paid to 6,739 customers. This represented 49% of the council’s gross revenue expenditure of £36,742,100.

1.7 Our work to establish the effectiveness of Broadland District Council’s security arrangements included:

• analysis of quarterly performance returns provided to the Department
• workshops and interviews with:
• key managers and staff
• staff from the Department’s Fraud Investigation Service
• Internal Audit
• randomly selecting and sampling:
• 30 new claims decided between 1 January and 31 March 2007
• 10 claims where there had been a change in the customer’s circumstances, decided between 1 January and 31 March 2007
• 20 fraud files closed between 1 April 2006 and 31 March 2007
• 5 fraud files from investigations resulting in sanctions
• examining documents and management information
• observing post opening and customer service activities.

1.8 We are grateful to Broadland District Council’s managers and staff for their help and cooperation throughout this inspection, the on-site phase of which took place between 30 April and 17 May 2007.

Overall performance

1.9 We found considerable weaknesses in Broadland District Council’s counter-fraud operation. The council considered its risk to benefit fraud was low as there was likely to be a correlation to the very low crime rate in its area. This was reflected in counter-fraud resource levels, which meant the council’s capacity to tackle fraud was limited and its counter-fraud staff had little opportunity to meet best practice in all areas. A lack of effective casework controls and little in-depth investigation work had resulted in some poor quality investigations and low output. In addition opportunities to conduct in-depth investigations with the Department’s Fraud Investigation Service had not been taken. The absence of management checking in this area also meant the council had little assurance that investigations were being conducted in line with legislation or the council’s policies and standards of conduct.

1.10 We were particularly concerned that although the council’s reported level of sanctions suggested its processes were effective, our sampling revealed a high proportion of sanctions had been inappropriately applied.

1.11 We were also concerned that in some cases the council had not complied with legislation by cancelling claims without allowing the customer a calendar month to respond to a request for additional information.

1.12 We found staff had a good awareness of verification requirements, but our sampling of new claims identified a number of failures to fully verify evidence required to support them. We also found that some staff who were accepting and verifying documents had not been trained on the latest evidence requirements. These weaknesses increased the risk of fraud and error entering, and remaining in, the system.

1.13 The council had made some good efforts to tackle fraud and error in its Benefits service. This was demonstrated by its commitment to undertaking intervention visits on claims in payment, where its annual target had been exceeded in 2006/07. A programme of fraud awareness training had been provided to all Benefits staff, and was being rolled-out to other council staff.
This had resulted in a high proportion of fraud referrals from staff.

1.14 The inspection concentrated on Broadland District Council’s counter-fraud arrangements, which were found to be weak, but we did some work on claims administration and resource management, where performance was of a much higher standard. The council had effective procedures and processes in place to set and monitor comprehensive and stretching targets on claims administration.

1.15 In addition, a comprehensive quality-checking regime had contributed to performance on accuracy improving to excellent during 2006/07.

Summary of recommendations

1.16 The following table lists the recommendations we have made in this report in priority order.

Recommendations

High priority
We recommend that Broadland District Council:		Paragraph
1	reviews the management, control and security of its counter-fraud operation by: introducing management checks at key stages of investigations monitoring the use of authorised officer powers, the correct recording of informal interviews and entries in QB50 notebooks reviewing the procedures for interviewing suspects under caution.	2.56, 2.63, 2.65, 2.69
2	improves the process for sifting and scoring fraud referrals to ensure: an intelligence led approach to referral selection is developed only good quality referrals are accepted for investigation analysis of the origin, standard and success of referrals is routinely carried out.	2.50
3	commences investigations promptly and ensures: caseloads are manageable good quality cases are prioritised.	2.53
4	ensures consistency in applying sanction decisions by reviewing its Housing Benefit and Council Tax Benefit Fraud Revised Prosecution Policy to include: guidance on roles and responsibilities guidance on evidence and public interest criteria.	2.82, 2.86
5	reviews its Fraud Team Business Plan to ensure: it provides details of arrangements for monitoring the progress and quality of investigations its links with the council’s strategic aims are specified.	2.68
6	improves the standard of verification by providing: refresher training on verification requirements training on the identification of false documents written guidance on its verification policy.	2.13, 4.30
7	ensures customers are given a full calendar month to respond to requests for additional information.	4.21
Medium priority
We recommend that Broadland District Council:		Paragraph
8	introduces additional checks to ensure that reported performance is accurate before submitting it to the Department.	4.23, 4.49
Low priority
We recommend that Broadland District Council:		Paragraph
9	changes its process to ensure management checks are undertaken before the customer is notified of the decision.	3.15
10	reviews its processes to ensure requests for additional information from customers or third parties are made within 7 days of receiving the claim.	3.5

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