The purpose of this report is to consider the risks and associated mitigations outlined in the internal audit reports on Registration Services and Housing Solutions - Financial Processes.

The Principal Auditor, South West Audit Partnership (SWAP) introduced the report.

Attention was drawn to the ‘Registration Service: Final Report – February 2023’ document at appendix A of the report.

It was highlighted that:

1.          17 recommendations had not been followed up following the General Registration Office (GRO) report submitted to the council in February 2022.

2.          The Registration Service had been transferred to the Law and Governance directorate in July 2022 and the Head of the Practice Management was tasked with managing the service.

3.          As part of the GRO’s recommendations, an Internal Audit had been requested and undertaken with the main focus being to review the progress of the 17 recommendations. It was noted that the review also included a review on actions taken from recommendations made from an internal review carried out in October 2021.

4.          Limited assurance was issued following the findings of that audit. The priorities within the appendix were highlighted.

The Head of the Practice Management (HOPM) provided the committee with an update on the actions taken. A written summary was included at Appendix D.  The following points were highlighted:

·            There was still work to be done but there was more assurance that the processes and staff training were in place to ensure that the department was able to carry out the work the GRO expected the council to do.

·            It was noted the GRO had attended the service twice since January 2022 and they were much happier with the progress made and would be revisiting in 2 weeks’ time.

In response to committee questions it was noted:

1.          The morale of staff was described as ‘up and down’ but, with the recruitment of further staff and with the development and support provided over the last six months, it was thought that it was generally improving. The changes being made were seen to be helping staff in their day job and in turn provided the public with a better service. The addition of the online appointment booking system in December 2023 would vastly improve the management of the high volumes of calls and emails received from the public.

2.          Shropshire Council had undertaken the quarterly checks for the backlog of 2 years up to March 2023. Herefordshire Council were just completing the quarterly check for the end of June 2023. It was highlighted that these checks did take up a large amount of time especially with new staff. However the checks had to be kept up and, with the additional staff recruited, the service would have more capacity in conducting these. The council would have conducted 4 quarterly checks by July 2024.

3.          It was considered that the removal of the cash payments element had significantly reduced risk but systems to monitor income still needed to be put in place; to allow, for example, the tracing of individual payments to specific certificates so these could be seen in budget reports. It was thought this would be addressed in the next couple of months. The Assistant Director, South West Audit Partnership highlighted the need for constant awareness, checking and monitoring by the service, and SWAP would assist. The Assistant Director indicated his satisfaction with the initial management response.

4.          The HOPM said that record keeping previously had been so incomplete that the potential for fraud to have taken place was there but, as there was no way of tracking through the system, it would have been difficult to find if this had occurred.

5.          It was confirmed the GRO had conducted a previous review in 2017 and aspects from that report had also not been picked up until the HOPM took over the service July 2022.

6.          It was noted that officers used daily ‘banking sheets’ to record the number of certificates issued which would equate in terms of money taken, but there is no facility for these to be inputted into the Business World system and therefore would not be pulled through on budget reports.

The Principal Auditor (SWAP), drew attention to the ‘HC Housing Solutions Team Financial Processes: Final Report – March 2023’ document at appendix C of the report.

It was highlighted that, following an audit of the homelessness prevention grant where some control weakness were identified, the Director of Community Wellbeing agreed an internal audit be undertaken into the financial processes within the Housing Solutions team. The audit findings led to a limited assurance opinion, the priority actions within the appendix were highlighted.

The Head of Prevention and Support Services (HOPSS) provided the committee with an update on the actions taken. A written summary was included at Appendix E. 

The following points were highlighted:

·            Providers had been set up with business accounts which would reduce the need for spend on procurement cards, however it was noted that when emergency housing was needed and a provider was not set up on the system, a procurement card would need to be used.

·            The interim Housing Solutions Manager had put in place management overview and approval of individual spend on the procurement cards.

·            Although very few homelessness loan payments were made, seven loans payments were made in 2022/23. Registered Providers would now need to provide invoices. Imprest accounts may still be needed for smaller “one-off” suppliers as it may be difficult for them to supply invoices in the timescales required.

·            Authorisation for Imprest accounts now required two signatories via email detailing the requestor and approvers in all cases.

·            The review into process and procedure notes were in progress but operational and personnel matters had slowed progress on completing this action, which was a priority within the service leads’ service delivery plan with a timescale for completion of 30 September 2023.

·            With regard to staff resources a revised structure, focused on resilience, would be implemented by the newly appointed Acting Head of Housing.

·            It was noted the cash Imprest and cheque book accounts had not yet been formally closed, but both continue not to be used and the actions would be completed by 31 August 2023.

·            The Housing Service Lead had ascertained the mandatory costs associated with void works and the Directorate Accountant had added an account/ analysis code for that budget.

In response to committee questions, it was noted:

1.          Assistant Director for (SWAP), confirmed that he was not aware of any other services within the council where money was being spent without any oversight. It was highlighted there were managerial processes for procurement cards and resilience, validation and authorisation controls were in place. The internal audit and the council would continue to monitor this situation.

2.          The Section 151 Officer explained that there was a clear trail for the allocation of procurement cards across the council and that officers had to authorise and code their own spends through an automated system to which managers would then have oversight of the overall spend. It was identified that managers would not see every transaction and that decisions were delegated to those officers.

3.          In relation to the Housing Solutions Team and the concerns raised with procurement cards, the HOPSS advised that although there had been no management overview and approval of individual spend on procurement cards until now, no one officer had acted alone and that there had always been more than one individual involved in the process.

4.          The Assistant Director (SWAP), confirmed a project was ongoing looking at procurement cards specifically across the whole of the council looking at the fraud controls and there is a data analytical process which he would look to bring back to the committee to provide further reassurance that controls are working effectively.

5.          In a response to a question concerning the setup of business accounts, the HOPSS confirmed that invitations to tender were sent to local providers of temporary accommodation and to those the council knew might be interested. The process was undertaken by the procurement team and there were certain requirements that needed to be met in order to enter into a framework agreement. The framework agreement was an open agreement and providers could still join. It was confirmed that there was a list of those providers that could be viewed.

Resolved:

That the report and the mitigations to the risks outlined in the internal audit reports on Registration Services and Housing Solutions - Financial Processes  be noted.

Action(s)

2023/24-004    SWAP to provide the committee with findings from the project work being undertaken around procurement cards across the council.