3.41 Work outstanding is monitored on a weekly basis. Section supervisors provide details of all work outstanding. The benefits manager monitors performance on a monthly basis and examines all cases which have failed the 14-day target, to identify if the claim can be speeded up or to identify any training needs. These are good practices.
3.42 The benefit supervisors perform a number of quality checks on:
3.43 The benefit supervisors also monitor the accuracy of determinations. The supervisors check the work of all assessors on a rotational basis, choosing a selection of cases daily. Decisions by supervisors and senior officers are not checked. Cases are chosen at random, there are no precise case selection criteria or targets for numbers of cases to be checked, although work done by new staff is subject to a 100% check.
3.44 Records are kept of errors found by type, numbers checked, and the error rate. This rate is calculated by including those errors that would affect the rate of benefit in payment. Details of all procedural and payment errors are fed back to the assessors.
3.45 Before our on-site visit, the LA supplied details which suggested that the error rate was 2%. We examined the records held for the months April to June. Our findings revealed that it was higher than recorded locally. Errors had also increased due to the recent recruitment of 2 new staff. They are now becoming more proficient and the error rate is falling again.
3.46 The Figure below gives details.
| Fig. 3.4: Analysis of accuracy checking levels | |||
|
Month |
Number of cases checked |
Number of payment errors identified |
Error rate |
| April |
402 |
41 |
10.1 |
| May |
383 |
35 |
9.1 |
| June |
210 |
10 |
4.8 |
Source: BFI analysis
3.47 There is no set target for checking in place. From data supplied by the LA, we estimate that EP&NBC checks between 12% and 14% of claims processed. This represents a good level of checking. While we consider that EP&NBC has made considerable efforts to monitor and improve on the accuracy of payments made, we believe that the LA could improve further in this area by:
3.48 A review is a request from a claimant for re-determination by an officer of the LA. A further review is an appeal to an independent Review Board made up of elected members. A claimant can request a Review Board hearing if not satisfied with the result of the review. EP&NBC supplied the following information on the volumes of reviews received in 1997/98.
| Fig. 3.5: Numbers of reviews received in 1997/98 | |||
|
Type |
Total |
Appellant successful |
Appellant unsuccessful |
| Officer review |
333 |
147 |
186 |
| Review Board |
12 |
8 |
4 |
Source: EP&NBC statistics
3.49 We were concerned at the high number of officer reviews in relation to Review Board cases. We were also concerned that in 44% of cases the LA changed its original decision. The number of reviews requested, 333 from a load figure of 11,850, is high.
3.50 During our sampling of backdated cases we identified that the LA has been treating some requests for backdating as reviews. This situation arises when a claimant applies for backdating after receiving a decision on a new claim. Full details are at Appendix F.
3.51 This partly explains the relatively high numbers of first reviews. EP&NBC has accepted that claimants in these cases are being denied their full statutory rights to review. Arrangements are in place to carry out re-training.
3.52 We also consider that EP&NBC could do more to promote the appeals process. We acknowledge that the LA is considering developing an information leaflet on this subject.
3.53 As part of our examination of the review process we examined 7 Review Board cases submitted in 1998/99. We found that the files were well constructed and easy to follow. We found one case where an exceptional hardship application was wrongly treated as an appeal.
3.54 Full detail of our analysis is at Appendix F. Only 50% subsidy is paid on backdated cases. Nonetheless LAs should have no regard to the financial implications when making decisions on claims to benefit. Each request for backdating must be considered on an individual basis. Benefit can be backdated for a period of up to 52 weeks before the date of claim providing:
3.55 We examined 15 cases where backdating had been considered. We found errors in 6 of our sample cases. There were no particular trends identified and we consider that awareness of the backdating law and procedures could be improved. We were, however, content that each case was dealt with on an individual basis.
3.56 EPs of HB and CTB can be made to specific claimant groups whose Income Support (IS) or Income-based Jobseeker’s Allowance (JSA(IB)) ceases when they return to work. These payments are to help long-term unemployed people who are returning to work by helping with housing costs in the transfer from benefit to wage. Since April 1997 over 900 EP cases have been processed.
3.57 The Subsidy Order provides for subsidy additions and deductions to encourage LAs to fast-track ‘in work’ claims following EP claims. An LA may earn an additional £10 subsidy if it determines an ‘in-work’ claim by a set date.
3.58 The scheme also relies on the local BA or Jobcentre certifying and stamping the form with the date of receipt. This is vital, as the date of receipt determines whether the claimant satisfies the 8-day rule.
3.59 We examined 10 cases which had been categorised as EPs and found that:
3.60 We conclude that EPs are well handled by EP&NBC. We have passed on details of our findings to the BA in a separate report.
3.61 The Revenues section has a Procedures manual covering most aspects of its work, which is used when needed by staff.
3.62 EP&NBC is committed to providing high quality training for its staff. This stems partly from its wish to obtain the Investors in People (IIP) accreditation. The provision of training is generally good. Technical training for assessment staff is obtained from a commercial provider with supporting awareness sessions delivered locally. Fraud awareness among these staff is high due to close liaison with the E&O section, which is located in the next room.
3.63 EP&NBC takes care to evaluate the effectiveness of all training that takes place and carries out an annual assessment to ensure that the individual training needs of staff are considered.
3.64 Good payment and accounting processes should:
3.65 EP&NBC currently uses the Housing Benefit Information System (HBIS) to calculate and generate the payments of HB. All rent allowance payments are made by crossed cheque. The only exception to this is that the LA will allow a first cheque to be ‘opened’ if the claimant does not have a bank account. The LA ensures that evidence of identity is provided in these cases.
3.66 There is also a need for EP&NBC to consider payment by Bank Automated Clearing System (BACS). This system of payment is more secure and cost effective, as recommended in the BFI Good Practice Guide. Staff and management have recognised the potential benefits of using it to pay Housing Associations and other landlords. This is planned for April 2000, which is commendable.
3.67 The major cheque production run for rent allowance payments is made each Thursday, while urgent and first payments are made each day. The LA has processes in place to reconcile payments. A nominated officer from the Accounts section reconciles the payment account on a monthly basis.
3.68 Payments issued are matched to payments cashed. Cheques have a lifespan of 6 months and procedures are in place to identify and follow up unpresented HB cheques over 6 months old. A list is passed to the benefits manager and to the E&O section to follow up any unpresented cheques. We found all procedures to be up to date, and consider that the cheque reconciliation procedures are an example of good practice.
3.69 The Council Tax section and Housing Department receive payment transfers through the IS/Information Technology (IT) systems for CTB and rent rebates. Processes are in place to use system reports for reconciliation. Some minor problems can occur, for example with backdated changes involving an archived period. These produce exception reports and a manual adjustment is made to correct this.
3.70 We consider these processes to be good practice, although there does seem to be some duplicated effort. The LA has an opportunity to improve efficiency by centralising this function outside of the Benefit Processing section in the proposed quality control post. The proposed new organisational structure is at Appendix H.
3.71 The LA has recognised that the procedures in place for sending out rent allowance cheques are insecure. These concerns have also been raised by District Audit (DA) in recent reports. EP&NBC requested that we carry out a review of these processes and make recommendations for improvement. Full details of our findings are at Appendix I.
3.72 Our inspection confirmed serious security weaknesses throughout the whole operation. The parts of the process, which give most concern, are:
3.73 These are major weaknesses that leave EP&NBC open to internal and external fraud. We believe that the LA should remedy these weaknesses by:
3.74 We have made recommendations at Section 5 and we are pleased to report that the LA has already started to implement them.
3.75 To maintain the security of the benefits system, it is important that robust controls are in place. We found that the IT section within the LA has some good support systems in place. Examples of good practice are:
3.76 We have some concerns surrounding the procedures to allocate levels of system access. Terminal access is controlled by the IT section on a request from the Benefits section. The benefits manager and senior officer control the level of access. We found that there were several officers in supervisory and management grades with full access to the benefit paying system. We consider that EP&NBC should take advantage of the facility provided by the system to tailor access levels to suit individual requirements and avoid unnecessary risks. However, officers who have little need to assess or pay benefit should be given view only access.
3.77 The LA should carry out a review of the access levels of all users. If the job function requires full system access, a checking mechanism should be implemented to ensure that all users are subject to regular checks.
3.78 Responsibility for identifying and classifying overpayments is with the Benefit Processing section, while recovery rests with the E&O section. Full details of our findings are at Appendix J.
3.79 The system automatically calculates overpayments from the details input by benefit assessors. It is then necessary to establish why the overpayment happened and to classify it. This must be done accurately as it affects whether or not the overpayment is recoverable and the subsidy payable on it.
3.80 Our sampling of casework showed that staff have a good knowledge of these processes. We identified only 2 errors from a sample of 23 cases.
3.81 The effectiveness of the recovery of overpaid benefit is less clear. Nationally, the reported proportion of recovered overpayments is 63%, as stated in the Audit Commission handbook Countering Housing Benefit Fraud. Despite some good practices, we were unable to comment on the standard of EP&NBCs performance, due to a lack of management information.
3.82 The LA accepts that the current process is fragmented and is currently considering a new system to control it. It is essential that this takes place and that all possible methods of recovery are pursued so that the LA can improve its performance.
3.83 EP&NBC advises claimants of the kinds of changes that affect benefit entitlement on notices of determination sent to the claimant, and landlords when appropriate.
3.84 The claim form also includes a section advising claimants to notify any changes of circumstances from those on the form. The claimant signs a declaration to do so. In addition EP&NBC has produced a local form to record details of any changes of circumstances reported at the reception area. As well as being an aid for the receptionists it is a useful quick reference in the file.
3.85 Supervisors and the senior officers monitor work intake and work outstanding. This process includes work on changes of circumstances. We examined workload statistics for the months of January to May 1999 and found that on average, the equivalent of one week’s intake of work is outstanding on changes of circumstances. This compares favourably with many LAs we have inspected.
3.86 We examined a random sample of 40 pieces of post relating to changes of circumstances, which were outstanding on 10 June 1999. The earliest item was received in April, although the changes reported would not become effective until a later date. The majority of post outstanding fell between late May and June and accounted for 85% of the post sampled. We are content that changes of circumstances are prioritised and processed.
3.87 EP&NBC allocates 52-week benefit periods for the majority of claimants, although shorter benefit periods are set for earnings cases. In our sample of 40 new and renewal claims 10 cases had shorter benefit periods. In addition, staff keep a clerical diary system for the expiry of Family Credit (FamC) claims.
3.88 We believe that there is further scope for EP&NBC to tailor benefit periods for claimants, such as those in receipt of private pensions. While examining a sample of overpayment cases we noticed several instances where benefit had been overpaid because claimants had failed to notify a change in their private pension. We recognise that the LA aligns benefit periods for major employers and consider that it should widen this procedure.
3.89 Regulation 67 of the Housing Benefit (General) Regulations provides that benefit should not be paid beyond 60 weeks. Subsidy penalties are applied if overruns occur. We did not identify any instances of overruns in our sample of new and renewal claims.
3.90 Claim forms are issued to claimants 8 weeks before the end of the benefit period. EP&NBC has excellent follow-up procedures in place. These are:
3.91 These are good practices. EP&NBC is ensuring that benefit take-up is maximised, while taking the opportunity to identify potential fraudulent or overpaid claims.