Agenda item

Report of the External Auditor.

The Committee considered the report on the Grants Claims and Returns Certification, presented by Leigh Lloyd-Thomas, BDO. Mr Lloyd-Thomas advised that a significant number of errors in the Council’s administration of Housing Benefits claims had been identified in the course of the auditors’ work, the outcome of which was that there could potentially be a £1.5m reduction in the amount that the Council could claim back from the Government as the level of errors had exceeded the threshold allowable. It was noted that although management had implemented action plans to address such issues in the past, these appeared not to have gained significant traction and there was therefore a need for a step-change in order to prevent the Council from finding itself in a similar situation in future years.

Amelia Hadjimichael, Head of Benefits, advised the Committee that an action plan had been drawn up in response to the findings of the audit and was in the process of being implemented. A response from the Department for Work and Pensions was expected very shortly, and re-testing of the errors identified was currently being undertaken in order to try and minimise the impact on the Council. Analysis of the identified errors indicated that up to 50% of those errors were historic and pre-dated measures that had since been implemented to prevent such errors in future, but as they had had a knock-on effect on subsequent calculations, they still affected this year’s audit findings. It was also found that 50% of the identified errors had been made by staff who had subsequently left the authority. A recruitment and training drive had recently been undertaken, and new staff were being closely monitored in respect of the quality of their work.

The Committee was very concerned about the findings of the report, in particular the amount of reduction in the Council’s claim when considered in the context of the significant financial constraints facing the Council and the cuts that were being made in order to respond to these. It was agreed that a further update report on progress with the implementation of the action plan in order to address the issues raised should be brought back to the Committee in order that this could be closely monitored by Members. The Committee advised that they needed to consider the action plan in full, and the timescales attached to this, in order to seek some reassurance; it was concerning that previous action plans did not appear to have addressed to issues, which had been occurring for several years, and that performance had in fact deteriorated. The Committee also expressed concern that the problem appeared to be worse in Haringey than other local authorities. It was acknowledged that this was a very complex area of work, but it was essential that this was addressed effectively, and the Committee hoped that the relevant Cabinet Member was fully aware of the issue and working to address this. Officers advised that in particular this Committee would have a role in reviewing management controls that could be put in place in order to reduce the level of errors.

The Committee requested information on the level of error over the past five-year period for comparison, and it was agreed that this would be provided.

Action: Head of Benefits

The Head of Benefits advised that a particular issue had been the loss of a number of staff in the department, which had led to a backlog of cases and meant that notifications received from claimants could not be acted on in a timely manner, leading to errors which were classified as the responsibility of the local authority. It was reported, however, that a dedicated member of staff was now in place to check the classification of every overpayment generated by the system, which should help to improve things. The Committee emphasised the need to bring in additional resources to clear the backlog as a matter of urgency in order to avoid being in this position continually – it was noted that in the past agency staff had been used to fulfil such roles, although the Head of Benefits indicated that there was a preference for permanent staff as there had been issues regarding the quality of work undertaken by agency staff in the past. The Head of Benefits advised that authorisation had been provided for five additional staff members to clear the backlog, including the staff member referred to above who was checking the classification of overpayments.

The Head of Audit and Risk Management noted that this was not a new issue, but that the findings of the audit this year were concerning. In response, it was reported that internal audit would be monitoring this area of activity continually throughout the year rather than on an annual basis, and would provide quarterly reports to the Corporate Committee on this work, in order that the Committee could monitor the situation closely.

The Committee emphasised the importance of ensuring that sufficient resources were available to facilitate the work of the benefits team in order to address these very serious issues, and agreed that the Corporate Committee should make recommendations to the Head of Paid Service, Cabinet Member and Staffing and Remuneration Committee regarding the need to ensure that staffing levels in this team were adequate.

RESOLVED

That the Committee recommend to the Head of Paid Service, Cabinet Member for Finance and Health and Staffing and Remuneration Committee that steps are taken to address the backlog in the benefits department as a matter of urgency and ensure that adequate resources are available to address the issues identified by the external auditors in their certification of the grant claim.