An inspectorate of the Department for Work and Pensions.

Report

Charter Mark - Awarded for excellence

Findings

Introduction

2.1  Berwick BC processes HB and CTB claims in the benefits section, which is part of the Finance Unit, headed by the Borough Treasurer. The relevant sections within the Finance Unit are shown in the Figure below.

Fig. 2.1: Berwick BC organisation chart

    Source: Berwick BC organisation chart

2.2  Berwick BC employs 5 full-time equivalent staff to administer benefits. The average cost for administering HB and CTB in Berwick BC in 1997/98 was £78.69, slightly below the reported average of £80.88 for other borough councils.

2.3  During 1998/99 Berwick BC paid out just over £4 million in HB and CTB, about 27% of its gross revenue expenditure.

2.4  The benefits section is located entirely at the Berwick council offices, and is led by a Principal Revenues Assistant (PRA).

2.5  The section consists of a benefit leader, who has responsibility for the day-to-day administration of HB and CTB, and 4 benefit assistants (2 part-time).

2.6  There are also a rents assistant and a debtors assistant who, in addition to other duties, deal with overpayment recovery work. These are located with the benefits section and report directly to the PRA.

2.7  Since December 1997, Berwick BC has also employed one full-time FO who is managed by the senior auditor.

2.8  Two of the main factors affecting how LAs deliver benefits and tackle fraud and abuse are:

Working relationships with other agencies

2.9  To provide a secure and efficient benefits service, LAs need to have an effective working relationship with other organisations, such as: 2.10  Berwick BC and BA both consider that they have an effective working relationship and effective communication links and we found no problems with the transfer of information between the 2 organisations. Berwick BC will shortly have a Remote Access Terminal (RAT) installed and this will reduce the paper enquiries made to BA. However, Berwick BC does not work in partnership with the BA collusive employer’s team to investigate cases where it is suspected that earnings have been under-declared.

2.11  Berwick BC and BFIS have a fraud specific SLA, which is monitored quarterly. The FO has a good informal working relationship with her BFIS counterpart, who calls regularly to discuss BA cases which involve HB or CTB. Both Berwick BC and BFIS are content that these arrangements are effective. However, BFIS is concerned that proposals discussed at the quarterly meetings (such as joint working initiatives) are not taken forward by Berwick BC.

2.12  There is a Service Level Agreement (SLA) between Berwick BC and RS which includes target timescales for submitting and responding to referrals. These targets are met in most cases.

2.13  There are no regular meetings with landlords.

Internal working practices, governed by political and strategic concerns

2.14  Berwick BC has no formal strategy for tackling benefit fraud nor a policy document setting out clear objectives for counter fraud work. A draft prosecution policy has recently been produced but this has not been referred to Members for approval and there are no plans for its implementation.

2.15  There are considerable organisational weaknesses which leave Berwick BC vulnerable to internal fraud. These include the allocation of some inappropriate access rights to HBIS, the involvement of the benefit leader in cheque production and checking, and a lack of effective management checking of benefit processing carried out by the benefit leader. Recently introduced management checking of benefits work needs extending to include re-performance and pre-award checks.

2.16  There are other organisational weaknesses which affect the potential success of the work being carried out, such as IA carrying out non-audit work and the FO being under the command of the Senior Auditor.

2.17  The FO works in isolation of the benefits section, has had inadequate training and receives no direction or management. We were concerned to be told that the post is expected to be self-financing.

Conclusions

2.18  Our findings and conclusions are set out against the 4 elements of the government’s fraud strategy. We examined Berwick BC’s performance against them by assessing:

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