Executive summary

Introduction

1.1 This report assesses Haringey council’s Security arrangements. We have limited the scope of this inspection to those Performance Standards components that have a direct impact on Haringey council’s Security performance, which included 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. The website address is: http://www.dwp.gov.uk/housingbenefit/publications/perf-stands/index.asp

Background

1.3 Haringey council is one of London’s 33 boroughs. It is located in the north of the capital and covers just over 11 square miles. It has a population of approximately 225,000, of which almost half come from an ethnic minority background. It is the tenth most deprived borough in the country with almost a third of households having no earned income.

1.4 The council employs approximately 8,500 people, making it the largest employer in the area. Its revenue expenditure requirement for 2006/07 was £783 million. The Benefits service has a Housing Benefit (HB) and Council Tax Benefit (CTB) caseload of 37,200 and paid out £201 million in HB/CTB in 2006/07.

1.5 The council was selected for an inspection because of the low number of successful sanctions it was achieving in relation to its caseload size, and information from the Department showed that it had resolved a low percentage of data matches during 2006/07.

1.6 Its Fraud Investigation team comprised a Fraud manager, 2 Special Project officers with day-to-day responsibility for a team of 7 Fraud Investigators and a Support officer. At the time of our visit in May 2007, the role of Fraud manager was vacant and there was also a vacancy for a Fraud Investigator.

1.7 Figure 1.1 shows the organisation of the Benefits service and the position of the Fraud Investigation team in the overall organisation. Both the Benefits team and the Fraud Investigation team are part of the Benefits and Local Taxation division, which is part of the council’s Corporate Resources Directorate.

Fig. 1.1: Benefits and Local Taxation (BLT) structure

1.8 The Benefits service was supported by a corporate Customer Services team, which handled the majority of initial contacts with customers. It also provided an over-the-counter service for the receipt of claims and documents required to support them.

1.9 Our work to establish the effectiveness of Haringey’s performance included:

• sampling 12 new claims and 10 changes of circumstances processed in the period October 2006 to March 2007, to obtain information on verification standards
• sampling files relating to 29 fraud investigations undertaken in the period from April 2006 to March 2007, to establish the effectiveness of the investigations and to gain assurance about the methods used to gather evidence
• analysis of management information, procedural guidance, policy documents, business plans, reports and minutes of meetings
• interviews and workshops with a range of staff across the council
• analysis of the council’s self assessment against the Department’s Performance Standards.

1.10 We are grateful to Haringey council for its help and cooperation throughout this inspection, the on-site phase of which took place in May 2007.

Overall performance

1.11 We found that, overall, the council had effective measures in place to deal with benefit fraud. However, we have made 20 recommendations to improve some areas of weakness in its fraud investigation process and benefits administration.

1.12 Over the last 3 years, the council had made steady improvement in the number of sanctions and prosecutions it had achieved and it had exceeded its sanctions target for 2006/07. It had narrowly missed its 2006/07 interventions target but a plan was in place to help it achieve its 2007/08 target for the new Performance measure 10. The council’s visiting regime was well organised and its Visiting team had exceeded its target for visits in 2006/07 by 22%.

1.13 At the time of our visit, the vacancy for a Fraud Investigator had not been filled for several years. The position of Fraud manager had also been vacant since April 2007. To ensure that the council improves its effectiveness in countering benefit fraud, the Fraud Investigation team should be fully resourced and these vacancies filled as soon as possible.

1.14 We found that the database and the number of spreadsheets used by the Fraud Investigation team to record fraud data was an inefficient and time consuming process. The process was also ineffective as it was prone to error and management information was difficult to extract. The council should invest in a new fraud-specific software system to give the Fraud Investigation team the IT support it needs.

1.15 The council’s anti-fraud strategy focused on internal fraud and corruption, with benefit fraud mentioned only once. The council had not set out its stance on tackling benefit fraud nor its strategy for tackling it. Such statements are important because they let the public know that the council is committed to tackling benefit fraud and help to raise the profile of the Fraud Investigation team. The council should prepare a policy statement and strategy specific to tackling benefit fraud. This should be approved by Members and published without delay.

1.16 The council did have a policy setting out the sanctions it would take once a fraudulent claim had been uncovered. However, our sampling showed that the policy had not been applied consistently. This was due to some extent to the complicated nature of the policy itself. For example, there were numerous clauses outlining the action to take depending upon the circumstances of the case. We also found cases where the guidance had been disregarded. The policy needs to be reviewed, simplified, and adhered to in all cases, to ensure a more consistent approach.

1.17 We found most of the council’s processes and procedures to be sound. It had a formal risk-assessment process for evaluating fraud referrals and targets for processing referrals and starting investigations had been met. Access to fraud files was restricted and secure arrangements were in place for their storage. Investigator notes within the files were clear, concise, legible, up-to-date and in chronological order. Evidence within the files was also chronologically filed, clearly numbered and cross-referenced.

1.18 All Investigators had been trained to a professional standard and demonstrated a sound knowledge of investigation techniques. Interviews under caution were conducted in a professional manner and the council’s interviewing facilities were of a good standard.

1.19 The council had acknowledged that its fraud referral process needed an overhaul and had identified areas of weakness. It had also acknowledged that it did not have a quality checking process in place to give assurance that fraud investigations were complying with relevant legislation and were being progressed efficiently and effectively. Both of these areas for improvement had been included as key tasks in the Fraud Team Work Plan – 2007/08.

1.20 From September 2003 to March 2007, the council had participated in an initiative that brought together, in a single unit, the council’s Fraud Investigation team and 4 investigators from the Department’s Fraud Investigation Service. When the initiative ended, a fraud partnership agreement between the council and the Department had been signed. However, in practice, we found no evidence that any joint working had taken place since the end of the initiative, nor any exchange of information between parties on cases accepted for investigation. The council should put into place practical joint working arrangements or risk losing the good, joint working relationship, built up during the initiative.

1.21 Although our sampling showed a good standard of verification of documents supporting changes of circumstances the verification of documentation provided in support of new claims was poor. Not all staff involved in verifying documents had received training, and annual refresher training had not been carried out. This meant that the gateway to the Housing Benefit system was not as secure as it could be.

Summary of recommendations

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

Recommendations

High priority
We recommend that Haringey council:		Paragraph
1	ensures that the vacancies for a Fraud Investigation officer and Fraud manager are filled as soon as possible to give assurance that the Fraud Investigation team are adequately resourced and effectively managed.	2.43
2	ensures that investigators follow the council’s guidance relating to the completion and maintenance of QB50 notebooks.	2.67
3	develops and publishes a policy and strategy for tackling benefit fraud which has the endorsement of Members.	2.80
4	develops a robust management checking regime which provides adequate assurance on the progress, quality and outcome of investigations and monitors this against targets and objectives in its business plan.	2.84, 3.4
5	develops effective procedures with the Department’s Fraud Investigation Service to ensure that: the offer of joint working is made in all appropriate cases and that each organisation notifies the other of ongoing investigations to avoid duplication a mechanism for monitoring joint working and an escalation process to resolve any joint working issues is put in place.	2.97
6	reviews its sanctions policy, applies it consistently and seeks endorsement by Members.	2.115
Medium priority
We recommend that Haringey council:		Paragraph
7	encourages quality fraud referrals by providing: fraud awareness training as part of the staff induction process an ongoing programme of fraud awareness training to all employees who are involved in HB and CTB administration, the effectiveness of which is monitored a single referral form with readily accessible guidance on how to complete it regular, formal feedback and information to all relevant council staff on the activities and success of fraud investigations.	2.47, 2.48, 2.49
8	plans, initiates and sustains a comprehensive publicity campaign to raise the public profile of the council’s counter-fraud efforts and encourage more referrals from the public through its dedicated fraud hotline.	2.51
9	takes a positive decision on the business case submitted to replace its fraud database with a fraud-specific IT system.	5.24
10	reviews its processes relating to the recording of referrals and the raising of investigations to ensure that they are being conducted efficiently and effectively.	2.60
11	obtains transcripts of taped interviews under caution where a caution or administrative penalty is being considered as an alternative to prosecution or routinely provides a comprehensive summary of the interview, including information about the demeanour the customer.	2.65, 2.76
12	develops procedures so that ‘Do not Redirect’ mail is referred without delay to the Fraud Investigation team for consideration of investigation in appropriate cases.	2.91
Low priority
We recommend that Haringey council:		Paragraph
13	ensures that all staff in Customer Service centres are trained in the requirements of the Department’s HB/CTB Security Guidance and receive annual refresher training.	2.20, 2.32
14	ensures that Benefits assessors receive refresher training on the importance of fully establishing, and verifying, the capital and income of customers.	2.28
15	ensures that Benefits managers validate Team leader accuracy checks and reviews its checking regime so that all aspects of verification work are covered.	2.33, 3.4
16	ensures that staff who receive and verify documents have access to up-to-date guidance on the correct procedures to follow.	4.8
17	develops and implements a staff retention policy and ensures that corporate policies and procedures are documented, regularly updated and subjected to version control.	5.10, 5.12
18	ensures that annual declarations of interest are obtained from all staff involved in the assessment of HB/CTB claims.	5.13
19	ensures that there is an up-to-date training needs analysis for Benefits staff, and an up-to-date record of completed training is maintained.	5.16, 5.17
20	enhances its Internal audit arrangements by including an assessment of the performance of the Benefits team and Fraud investigation team against the Department’s Performance Standards.	5.37

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