Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1. The purpose of this paper is to present the results of a self-assessment against the guidance issued by the Chartered Institute of Public Finance and Accountancy (CIPFA), titled `Managing the risk of fraud - actions to counter fraud and corruption' known as the `Red book 2'. This guidance sets out the action needed for an organisation to be effective in countering:

· fraud - the intentional distortion of the financial statements or other records by a person internal or external to the organisation which is carried out to conceal the misappropriation of assets or otherwise for gain, and

· corruption - the offering, giving, soliciting or acceptance of an inducement or rewards which may influence the action of another person.

1.2. The Committee will be aware that there is a comparatively low incidence of reported fraud or corruption within the County Council arising from members, staff, service users or the public generally. There has been no material fraud case, in accounting terms, for at least the last 25 years.

1.3. The self-assessment has not highlighted any obvious gaps that need addressing at this time, however, the Committee are invited to consider whether any changes in current practice are required.

1.4. It is proposed that the County Council's current anti-fraud and corruption strategy and related policies be reviewed at the next meeting of the Audit Committee, drawing on the self assessment and discussions held at this meeting.

2. Contextual information

2.1. CIPFA produced the first `Red book' in the Autumn of 2006 and a self-assessment was completed and presented to Governance Committee in June 2007. The Red book 2 expands on the first version by providing further definitions, explanations and examples of the attributes expected in the 56 questions asked.

2.2. Red book 2 has been produced by the CIPFA Better Governance Forum Counter Fraud Advisory Panel for use in all public bodies and is considered best practice. It is aligned to the approach of the National Fraud Strategic Authority (NFSA), is taken account of in comprehensive area assessments and is recommended by organisations such as ALARM, the national forum for risk management in the public sector, and the Institute of Internal Auditors (IIA). However, the incidence of fraud and corruption varies across the different types of organisation and this will, to a large extent, govern the response to the Red book 2 and the approach to managing the risk of fraud.

2.3. As already indicated in paragraph 1.2, the County Council has a comparatively low incidence of fraud. During 2008/09, 25 potential irregularities were reported and this was consistent with the number of potential cases notified in the two preceding year. Of the 25 notifications, 23 led to investigations by internal audit or the department in which the potential irregularity was identified. The majority of these cases related to internal procedural issues, with only two cases referred to the police for criminal investigation.

2.4. Two areas were highlighted for discussion in June 2007 as a result of the initial self-assessment, relating to publicity and the publication of statistics with regard to the incidence of fraud. Members resolved that no change be made to County Council policy in relation to these or any other element of the anti-fraud and corruption strategy at that time and there have been no material changes to affect those two judgements since the first Red book self-assessment was carried out

3. Self assessment

3.1. A self-assessment has been carried out against the Red book 2 and the results are attached at appendix A. A copy of the self-assessment has been shared with the Audit Commission as part of the Comprehensive Area Assessment.

3.2. No new issues have been raised as a result of the self-assessment and the analysis indicates that the County Council's present arrangements are generally effective and fit for purpose. Appropriate policies are in place, are monitored for compliance regularly, and help to maintain a comparatively low incidence of fraud and corruption.

3.3. The County Council's Anti-fraud and corruption strategy and related policies were approved by the Governance Committee in March 2005 and we are currently carrying out a review of these documents. Member's comments in relation to the Red book 2 self-assessment will be taken into account during this review and the revised Anti-fraud and corruption strategy will be brought to the Audit Committee in December 2009 for approval.

4. Recommendations

4.1. Based on the outcomes of the self-assessment, the Committee is asked to endorse the view that the current approach to counter fraud and corruption is effective.

4.2. The Committee is invited to raise any points which it wishes to be taken into account in the forthcoming update of the County Council's anti-fraud and corruption strategy.

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

Other Significant Links

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

1.1. Equality objectives are not considered to be adversely affected by the proposals within this report.

2. Impact on Crime and Disorder:

2.1. The proposals in this report are not considered to have any direct impact on the prevention of crime, but existence of the anti fraud and corruption strategy and associated policies are designed to minimise fraud against the County Council.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

No specific changes

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

No specific proposals affecting adaptation to climate change.