Agenda item

Internal Audit Annual Fraud Report

Report of Senior Finance Manager, Internal Audit



The Committee received a report of the Senior Finance Manager (Internal Audit), Linda Hunter, which informed the Committee of the outcomes of the work undertaken by Internal Audit on fraud and corruption during 2021/22 and the proposed work for 2022/23.



The Senior Finance Manager, Stephen Bower, explained that the Council’s fraud policies undertook annual reviews. It was added that no policy had a significant change although many had minor changes, following this year’s review.



It was mentioned there was an increase in fraud in the public sector due to the amount of covid grants issued by the local government.



The Senior Finance Manager highlighted key points within the report and the Council’s fraud policies for the Committee.



Appendix A to the report highlighted potential fraud in the authority and set out how the Council aimed to mitigate this.



Members of the Committee asked questions and the following responses were provided: -



The Senior Finance Manager believed that having yes or no options in the checklist was the easiest way to record answers. He mentioned that they previously trialled using percentages although that was more challenging.



The Senior Finance Manager explained that question 5 in the Governance Checklist for Fraud report was lifted from a CIPFA (The Chartered Institute of Public Finance and Accountancy) document. This was why the question referred to a single Councillor having portfolio responsibility for fighting fraud. The Director of Legal and Governance confirmed the question should refer to a Committee rather than a Councillor due to the Council’s recent transition to a Committee System. The Senior Finance Manager agreed to amend future reports.



The Senior Finance Manager confirmed there was a procedure for reporting fraud. There was a document that outlined the procedure, which would be uploaded onto the Council’s webpage after the meeting.



The Senior Finance Manager explained the review on Members Declaration of Interest forms was part of the National Fraud Initiative work. After reviewing Members Declaration of Interest forms, no significant issues were identified.



The Senior Finance Manager believed the service was adequately resourced to deal with Fraud at a high standard.



The Senior Finance Manager stated that Sheffield City Council issued relatively lower fraud offences compared to other authorities during the pandemic.



The Senior Finance Manager informed the Committee that approximately £120m were issued in covid grants, approximately £680,000 were identified as errors, in which, approximately £300,000 had already been recovered with the remaining in the process of being recovered.



The Senior Finance Manager suggested that Fraud E-Learning be compulsory to all Council employees although that was not possible therefore it was agreed to be compulsory for Managers only.



The Senior Finance Manager confirmed there was adequate processes in place to protect whistle-blowers in the Council.



The Senior Finance Manager explained that National Fraud Initiative will produce a national report that outlined the amount of money recovered from covid grant fraud.



RESOLVED: That the Audit & Standards Committee (1) noted the content of this report; (2) noted that the Councils policies in relation to fraud and corruption have been reviewed and fulfil the required governance arrangements for the Council; and (3) noted the completed checklist for those responsible for governance.



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