An administrative error meant Southwark Council overpaid BUPA by nearly half a million while nearly £300,000 has been mistakenly given out as COVID-19 grant payments, a new report reveals, writes George Mathias …
The document, titled the Internal Audit and Anti-Fraud Progress report, was published following an audit on the council’s financial practice by accounting firm BDO.
In this financial year, over £285,000 was mistakenly handed out as COVID-19 grant recipient funding whilst private healthcare company BUPA was overpaid by £452,950.47 – £344,736.47 of which has now been paid back. The council is currently investigating the outstanding balance.
Much of these issues are attributed to the council’s internal finance system Mosaic and staff training, with the council admitting: “A training module has not been developed for new starters in the operational teams.
“New starters are provided with on the job training by the individual teams themselves and the systems and support team has little or no involvement in the process.
“This has led to inappropriate working practices and absence of knowledge and expertise, in the operational and finance teams.”
The audit details that two current staff and six former employees are currently under investigation and, from April to August alone, the council opened 156 fraud investigations.
The council said it was not able to comment on any of these cases for legal reasons.
According to government estimates, fraud costs councils across the country around £2.2 billion each year.
The council says its fraud response plan, which sets out in detail the local authority’s approach to identifying and dealing with potential fraud, is to be reviewed this month by the strategic director of finance.
However, on other aspects of the report, the council scored more highly, particularly in relation to its property portfolio.
On this the council was found to have “appropriate controls and processes in place” and its operational effectiveness was ranked “substantial”.
In addition, on the anti-facilitation of tax evasion, the council was praised for its due diligence and for having “reasonable procedures in place relating to payments made to non-VAT registered traders.”
The report also reveals the council is owed almost £10m with nearly a third of this debt more than a year overdue, likely due to the impact of COVID-19.
The report explains: “Although debt levels have increased over this time period, this is unsurprising given the restrictions on the methods of recovery action available”.
