Audit and Governance Committee

12 June 2023

Annual Fraud and Whistleblowing Report

For Review and Consultation

Portfolio Holder:	Cllr S Flower, Leader of the Council

Executive Director:	J Mair, Director of Legal & Democratic

Report Author:	Marc Eyre

Title:	Service Manager for Assurance

Tel:	01305 224358

Email:	marc.eyre@dorsetcouncil.gov.uk

Report Status: Public

Brief Summary: The Audit and Governance Committee receives an annual report on fraud and whistleblowing, which provides an update on the Councils approach, including a summary of cases reported in the preceding twelve months.

Recommendation: The Committee are asked to:

Note the annual update on fraud and whistleblowing activity;

To reaffirm that the Chair of the Audit and Governance Committee acts as the Council’s member fraud prevention champion.

Reason for Recommendation: To support the Council’s zero tolerance to fraud.

Summary of Anti Fraud Initiatives

Following the South West Audit Partnership (SWAP) “Fraud and Reporting” audit report in April 2021, the Council has maintained a fraud action plan to track progress in implementing anti-fraud initiatives. The chart below notes the progress that has been made since the last annual report (which was presented to the 22 June 2022 committee):

Theme	Latest Position	Status
Policy framework	Fraud and whistleblowing policies were reviewed, updated, approved and promoted: Anti Fraud Bribery and Corruption Policy; Anti Money Laundering Policy; Whistleblowing Policy	Completed
Fraud Risk Assessment	Output from SWAP’s fraud risk assessment review with services has been embedded into the Council’s Service Risk Register framework, and reviewed alongside any other service risks.	Completed
Communication	The fraud and whistleblowing intranet pages have been reviewed and updated. The Chief Executive issues an annual reminder of our whistleblowing arrangements.	Completed
Training for Officers and Members	A set of fraud and whistleblowing modules are available to staff and members via the Learning Hub. Ongoing work is required to undertake a training needs analysis to identify specific training requirements for higher risk areas.	Part complete
Fraud identification	A number of service areas have initiated data matching via Cifas (as part of our internal audit arrangements with SWAP), including insurance; contractor/agency appointment; and financial assessments. Additional service areas are being considered for inclusion.	Ongoing

SWAP completed their second baseline assessment of maturity in relation to fraud in November 2022. This provided a cross-cutting baseline assessment report on the maturity of fraud management across wider SWAP partners. As shown in the comparison chart below, significant progress has been made within the last twelve months to improve our fraud maturity:

The following actions sit alongside the eleven Amber ratings, and will provide a focus for 2023/24:

Sign off of a fraud protocol between SWAP and Dorset Council;

Undertake a fraud training needs analysis;

Develop a central repository for fraud updates / communication;

Ongoing roll-out of Cifas

The baseline report also noted that whilst the former chair of Audit and Governance Committee had been identified as the elected member fraud prevention champion, this had not been reaffirmed with the new chair. This is noted as a recommendation for adoption.

SWAP carried out an internal audit on employee expenses, including a proactive fraud review, which provided a “reasonable” assurance opinion, and four recommendations for improvement identified.

Reporting of Whistleblowing and Fraud – 2022/23

Whilst any issues reported via the Whistleblowing hotline or directly to either the Monitoring Officer or Section 151 Officer will be recorded centrally, other issues that could constitute fraudulent activity (for instance those related to staff code of conduct) are investigated and reported separately via Human Resources. At this point in time, this report focuses on issues reported to the Monitoring Officer or Section 151 Officer.

The purpose of the whistleblowing policy extends beyond fraud to other perceived cases of malpractice, whether behavioural, procedural or in respect of health and safety failings.

The whistleblowing policy sets out a number of mechanisms for notification of fraud or other perceived malpractice. The table below sets out whistleblowing activity during 2022/2023, with six cases reported in the twelve month period (April 22 to March 23):

Whistleblowing hotline:	No notifications received
Notification to Manager / Executive Director / Chief Executive :	Case 04/2022 – Raised via elected member. Currently being investigated and outstanding at time of writing this report. Case 06/2022 – Health and safety concerns raised relating to a non-DC education setting. Passed to Childrens Services, as commissioners.
Notification to the Monitoring Officer :	Case 01/2022 – Raised via whistleblowing channels, but not pursued as no allegations of actions, inactions or failings by Dorset Council. Case 02/2022 – Alleged bullying and poor management in Place Directorate. Passed to HR. Case 03/2022 – Allegations against line manager within Adults and Housing. Complaint investigated and not upheld. Case 05/2022 – Alleged poor management practices during restructure. Not upheld.
Notification to the Section 151 Officer :	Case 07/2022 - Indirect letter received via Salix regarding concerns that some solar PV schemes within the programme had been oversized for the requirements of the building. Direct investigation undertaken, alongside contractors, and no substance to the claims from the anonymous source. Not upheld.
Notification to SWAP :	None

Financial Implications

Fraud presents a financial risk to the Council which needs to be managed to reduce risk down to an acceptable level.

Climate Implications

None

Well-being and Health Implications

None

Other Implications

None

Risk Assessment

HAVING CONSIDERED: the risks associated with this decision; the level of risk has been identified as:

Current Risk: Medium

Residual Risk: Medium

Equalities Impact Assessment

Fraud policies have been subject to EQIA.

Appendices

None

Background Papers

None