CIPFA North West Audit GroupFraud Risks and Personal Budgets

4th March 2015Jane Whyatt, Emma Parsons & Andrew Bloor

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Agenda

1. Overview of the Personal Budget scheme

2. National Challenge

3. The Risks: Syndicate Exercise

4. Feedback from the Group

5. Key Risks

6. Break

7. The Controls: Syndicate Exercise

8. Feedback from the Group

9. Oldham – A Case Study

10. Further Assurance Required

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What are Personal Budgets?

Personal Budgets (aka Direct Payments) are offered by your local authority to give more flexibility over how care and support is arranged and provided.

Personal Budgets are designed to promote:

• Independence• Choice• Inclusion

Personal Budgets enable people to purchase the assistance or services that the Council would otherwise provide.

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Personal BudgetsYour experience

With colleagues on your table:

• discuss how PB operate at your organisation; • and any challenges you may be facing?

(10 mins)

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How do they workUsers are informed that :

• You have a needs assessment to establish which needs you have that can be supported ('eligible needs')

• You are allocated an indicative budget (estimated budget) • You develop a 'support' or 'care' plan for using the indicative

budget to meet your eligible needs. • Once your plan is approved, you will be told the final amount of

your Personal Budget and can make the necessary arrangements to get the support you have chosen.

• You will have your Personal Budget reviewed on a regular basis.

Source: “www.oldham.gov.uk”

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National Challenge

• Since 2007, government has consistently aimed to give people more choice and control over the social care they receive, and to enable them to live independently at home for as long as possible.

• The policy of more choice and local control has, however, changed the scale of the fraud risks faced by councils.

• Cases of detected social care fraud nationally increased from 131 in 2009-2010 to 438 in 2013-2014.

• In 2013-2014, however, a majority of all councils did not detect a single social care fraud

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Detected Social Care Fraud/Misuse2013-2014

 Authorities  Percentage

 Unitary Authorities  48%

 Metropolitan Districts  47%

 County Councils  48%

 London Boroughs  61%

Source: Audit Commission “Protecting the Public Purse 2014”

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National Challenge

• Councils face significant budget savings whilst continuing to provide vital social care services for its residents.

• Personal Budget Challenge:– correctly assessed and paid– spend appropriate to Support Plan– ensuring most vulnerable are safeguarded

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Cost of Personal Budget Fraud/Misuse

• Number of cases since 2009-2010 of social care fraud has more than trebled to 438

• Average value in 2013-2014 of £14,297 per case, this accounts for £6.3 million in losses

Source: Audit Commission “Protecting the Public Purse 2014”

Number of Cases

Value (£m)

Number of Cases

Value (£m)

Number of Cases

Value (£m)

2013/2014 2012/2013 2011/2012           

438 6.3 200 4.0 122 2.2

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Greater Profile - Nationally

• Audit Commission:– Protecting the Public Purse– National Fraud Initiative

• Fighting Fraud Locally• GMFIG• NAFN• CIPFA Counter Fraud Centre• NW Chief Audit Executive Meeting

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Key Internal Stakeholders

Finance

Internal Audit

Health & Wellbeing Directorate

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Group Exercise - Risks

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Personal Budgets - RisksRisk Financial Reputational Operational

Support Plans are out of date X X  

Ineffective Brokerage Services X   X

Absence of payments approval leading to error X   X

Inappropriate spend by client to support plan X    

Lack of procedures and non compliance X X X

Theft and Abuse by Family/PA X X  

Debts Recovered X    

Lack of integrated systems and/or automated systems

leading to error    X

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Personal Budgets - Risks

Risk Financial Reputational Operational

Lack of governance arrangements  X X X

Lack of collaboration between Directorates  X X X

Client not making contribution in line with support plan X    

Funds allowed to accumulate without challenge X    

Care packages over generous in the first instance X X

Lack of clear internal and financial controls X X  X

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Coffee Break

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Group Exercise - Controls

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Case Study – Oldham Council Response

Internal Audit & Counter Fraud Team

• FFS Audit Assurance – twice yearly and full reliance from Grant Thornton

• Continuous Audit process on the areas of high risk• Full support for Adult Services – system

transformation and ongoing support and guidance • Regular attendance at working groups to deliver

change• Professional collaboration between Brokers,

Finance and Personal Budget Audit Team

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Case Study – Oldham Council Response

Dedicated Personal Budget Audit Team

• Challenged and updated the audit process • A risk based review of all client accounts• Documentation Review – Procedures - Whistleblowing

Arrangements• Revised Audit process – Desk based approach• Fit for purpose PB Agreement• Introduction of PB Governance Policy• Good Practice Guide highlighting process for Personal Budget

including the Audit process• Full collaboration with the Auditors and Health and Wellbeing • Results speak for themselves

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Case Study – Oldham Council Results

2012/2013 2013/2014 2014/20150

200

400

600

800

1000

1200

AuditsRecoveries (£)

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Case Study – Oldham Council Response

Health and Wellbeing Directorate

• Introduction of online panel process (Frameworki)• Quick turnaround on decisions• Audit trail

• Introduction of Prepayment Cards• Allows for live audits and 1 day recovery of

funds• Terms and Conditions for External Brokers• Internal In-house brokerage to go live 1st May

2015

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What's next for Oldham – Further Assurance

• Agreed Debt Management and Recovery Policies for direct payments, care and residential services funding.

• Joint working agreement and arrangements between the main investigatory bodies

• Fraud awareness session for Adult Services assessors and social workers

• Data sharing powers, legal gateways and legislation should be extended to include investigating social care assessments to protect the public purse

• Pre-financial and household member checks be made prior to the funding panel.

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Wrap Up

• Risks around Personal Budgets are great• They are here to stay…• National and local profile.• Pro-active response required by all parties:

– External organisations– Internal colleagues across the business– Within Finance and Audit

• Results are real and affect the bottom line!• Does everyone agree with this?.........

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Any Questions