CIPFA North West Audit Group
Fraud Risks and Personal Budgets
4th March 2015
Jane Whyatt, Emma Parsons & Andrew Bloor
Agenda
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
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
2
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.
3
Personal Budgets
Your experience
With colleagues on your table:
• discuss how PB operate at your organisation;
• and any challenges you may be facing?
(10 mins)
4
How do they work
Users 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”
5
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
6
Detected Social Care Fraud/Misuse
2013-2014
Authorities
Percentage
Unitary Authorities
48%
Metropolitan Districts
47%
County Councils
48%
London Boroughs
61%
Source: Audit Commission “Protecting the Public Purse 2014”
7
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
8
Cost of Personal Budget Fraud/Misuse
Number of Value
Cases
(£m)
2013/2014
438
6.3
Number of Value
Cases
(£m)
2012/2013
200
4.0
Number of Value
Cases
(£m)
2011/2012
122
2.2
• 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”
9
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
10
Key Internal Stakeholders
Finance
Health &
Wellbeing
Directorate
Internal
Audit
11
Group Exercise - Risks
12
Personal Budgets - Risks
Risk
Financial
Support Plans are out of date
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
Theft and Abuse by Family/PA
X
X
Debts Recovered
X
Lack of integrated systems
and/or automated systems
leading to error
Reputational Operational
X
X
X
13
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
14
Coffee Break
15
Group Exercise - Controls
16
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
17
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
18
Case Study – Oldham Council Results
1200
1000
800
Audits
Recoveries (£)
600
400
200
0
2012/2013
2013/2014
2014/2015
19
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
20
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.
21
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?.........
22
Any Questions
23