Agenda item

This report details the work undertaken by the in-house fraud resources in the Audit and Risk team and communicates a first update on completion of the work plan for 2025/26.

Ms Vanessa Bateman, Deputy Head of Audit and Risk Assurance, introduced the report.

The meeting heard:

·         Cases regarding dual workers was not unique to Haringey. There was a strong fraud network across London and all boroughs were facing the same challenges. It was not a surprise when the coronavirus crisis forced organisations into hybrid working. It was obvious that risks would be harder to spot. The cost of living crisis informed the motives relating to fraud. Various factors influenced fraud helping people to justify it. Systems of internal control and some of the governance and basic things that were needed to have in place as an organisation. Even with really robust control environments, certain individuals arriving to an organisation who knew how to break a system could have an advantage over the Council.

·         If the team found somebody committing tenancy fraud, normally subletting, it was not Council staff who would evict that person. The person would still have to go to court and the charge would have to be proven. There were duty solicitors at court who would help somebody defend a case of possession.

·         A ‘lessons learned’ report could be done on the back of all of the fraud investigations. A lot of them did not end up in in the criminal space in any case. When audit planning was done for the year, many different factors would be taken into account. One of which was where the fraud risks might be. If the control environment was not robust and therefore the exposure to risk was higher than it ought to be, then this would feature in the audit plan to try to improve the control environment in that space. The annual report always pointed to the key areas where either through the internal audit work or through the anti-fraud work, there were specific areas where there was a higher intensity of fraud risk. This fed back into the audit planning process.

·         As the internal audit plan was brought forward in March 2026, it would be possible to bring an indicative fraud plan which identified the sorts of areas where there had been control failures in the past.

·         It would be useful to have a consolidated list of outstanding weaknesses and when they would be remediated as was done for the internal audit related matters.

·         In relation to blue badge fraud, the digital badges meant that enforcement activity was more robust. Officers used handheld devices so they could easily check if a badge was expired or lost or stolen and if a counterfeit badge was being used. The number of frauds or mis-use cases detected in the borough skyrocketed. This was not unique to the borough. The response to it was to have PCNs issued or have the car impounded. Some of the work went in to creating a deterrent as part of the fraud strategy. Other boroughs were reporting that the response did not reduce the fraud. The work outlined within the report included one full time employee. There were five full time employee equivalents covering all areas. One officer had spent a reasonably lengthy period on this matter.  Some income for the team had been raised through cautions. The Parking team had been happy to pay towards the prosecution costs which had to be considered. More work was being done for more automation in the process. A request had been made to digital colleagues for help with automating the process. The estimates for the income that could be generated for the caseload being submitted was about £75,000 a year and this would be reinvested back into the team to enable them to become a bit more resilient and perhaps bring in some trainee resources and help with succession plans. It had never been envisioned that this one investigator would work for such a length of time on the project. The priority until March 2026 was income generation. There had been some successful prosecutions, with more to be made. The automation would make a difference and cover the costs of the work.

·         In relation to the administration of housing benefit overpayment, this was carried out by the Council's Housing Benefit team, not the fraud team. In the past, the fraud team would get involved in the investigations of suspected benefit fraud, but that was taken away from the Council in 2015. Since then, the Council had no authority to carry out any housing benefit investigations. Referrals were made, but these would be passed on to colleagues in the DWP to carry out investigations. The Council had high levels of historic housing benefit overpayments. A lot of this was due to local authority error historically and supported exempt accommodation. As more people moved to universal credit, it was less of a risk. The issue was discussed openly within monitoring reports. It was also leading to higher level of bad debts provision.

·         The fraudulent payment of PCNs related to when a PCN was issued and then paid and acknowledged within the parking income system. The Council would then hear from the banks reporting that the card was fraudulent. There was a high incidence of this, but it seemed to be linked to telephone payments where there was not the same level of security as online payments. Some analysis of this was being done to find the root cause.

RESOLVED: To note the activities of the team during quarters one and two of 2025/26.