CIPFA North West Audit Group Fraud Risks and Personal Budgets

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CIPFA North West Audit GroupFraud Risks and
Personal Budgets

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

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Agenda

• Overview of the Personal Budget scheme
• National Challenge
• The Risks Syndicate Exercise
• Feedback from the Group
• Key Risks
• Break
• The Controls Syndicate Exercise
• Feedback from the Group
• Oldham A Case Study
• 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 2013/2014 2012/2013 2012/2013 2011/2012 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
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Group Exercise - Risks
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Personal Budgets - Risks
Risk 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
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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