To receive the report from Rob Hutchins the Devon Audit Partnership Manager
Prior to the start of the presentation, the Devon Audit Partnership Manager introduced his colleague Paul Middlemass, a new Audit Manager who will become the lead Manager for the Council’s Audit & Governance Committee’s once he is fully trained.
The Devon Audit Partnership Manager presented the report, the purpose of which was to advise the Committee of the results of a self-assessment against the CIPFA code of practice on Managing Risk of Fraud and corruption.
Following a query from Councillor Craigie regarding fraudulent claims made for COVID grants the Devon Audit Partnership Manager advised there has been an increase in risk however checks have been carried out to reduce the risk and later in the agenda there is a report which gives assurance of arrangements in place by the Council. The Finance Manager & Section 151 Officer added that grant payments did have to be paid quickly which brings an element of fraud, however proactive work to reduce risk had been done by way of contacting businesses that would be eligible. The evaluation of the Discretionary Grant process was conducted by North Devon Plus and due to the rigorous application procedure resulted in no concern regarding fraud. The Finance Team have been working hard to keep up with applications and making checks to minimise the risk of fraud. All grants that have been paid have been put through the National Fraud Initiative Portal which checks for discrepancies. TDC have paid out 2800 grants in total with 60 of these requiring more detailed checks for reassurance they have been paid correctly.
Councillor Hodson referred to page 41, point 7, expectation 4 in the table and asked that as she is Lead Member for Finance and Audit and Vice-Chair of the Audit Committee could she also be briefed on fraud risks. The Devon Audit Partnership Manager advised this could be changed to include the Vice-Chair as well.
Following a query from Councillor Hodson regarding the ability to validate holiday lets and second homes for eligibility of grants the Finance Manager & Section 151 Officer confirmed that if properties were registered for Business Rates they would qualify however if properties could not be seen to market their business then owners were asked to provide evidence.
The Chief Executive advised the Committee that this is recognised as a national problem and the Chair of the Devon Districts Forum had written directly to the Secretary of State highlighting these issues. The Chief Executive circulated a copy of said letter and response to the Committee while the meeting was in progress.
Following a query from Councillor Hepple the Devon Audit Partnership Manager advised there is no time limit on investigating payments of grants however it would be dependent on resources available. The same applies to a response plan however as the level of fraud and corruption within TDC has been traditionally low there is potential to resource a dedicated officer or expertise externally.
The Head of Legal & Governance (Monitoring Officer) advised the group that through auditing the grant payments it had been identified that only 1 had been paid incorrectly but had since been recouped.
The Chief Executive added that there had been huge pressure from Central Government to get grants paid quickly. Some other Authorities, who were underperforming, had received calls from junior ministers questioning why grants had not yet been paid, TDC did not receive a call therefore to only get one wrong is a massive achievement and something to be proud of. It is hard to provide extra resources without an impact on another area so there needs to be a balance. As part of the new re-structure Operational Managers have been looking at the structure of their service areas and the resources required. The budget was agreed at the end of February so any changes will be implemented soon.
The Chair gave credit to everyone involved in getting grants paid so quickly, accurately and stated a fantastic job has been done.
Following queries from Councillor Craigie the Finance Officer & Section 151 Officer advised the following:
· TDC will receive a New Burdens Grant which covers the administration of the grants.
· North Devon Plus have an expertise in assessing businesses and analysing information on applications submitted for funding. TDC would have struggle to pay out all the grants if North Devon Plus had not assisted.
· North Devon Plus are audited by TDC.
· There is no formal right of appeal if a grant is not awarded.
The report was noted.