BIRMINGHAM AUDIT

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BIRMINGHAM AUDIT

• FRAUD INVESTIGATION IN THE PUBLIC SECTOR
• The Local Government Perspective
• PRESENTED BY
• SUE HOUGHTON
• NEIL FARQUHARSON

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Birmingham City Council Key Statistics

• 2 billion total budgeted expenditure
• Population of around 1 million people
• Over 90,000 Council owned dwellings
• 117 Councillors
• Paid in Housing/Council Tax Benefit
• 70 staff investigating fraud

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Reporting Structure
District Audit
Councillors
Client Depts
Sarah Wood Director of Finance
Benefit Agency
Police
Jim Wilkinson Chief Auditor
Benefit Counter Fraud Team
Corporate Fraud Team
Benefit Fraud Insp
Tax Payers
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Fraud Investigation Within Birmingham Audit

• Corporate Fraud Team
• Employee/Third Party Investigations
• Grant Aided Organisations
• Student Award Fraud

• Benefit Counter Fraud Team
• Investigation of Housing/Council Tax Benefit
• Urban Renewal Grants
• Instruments of Payment
• Multiple identities

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The Benefit Counter Fraud Team

• Established in 1985
• B.C.C was one of the 1st L.As to have a team
  dedicated to fraud investigations
• Now within Birmingham Audit, approx 60 staff
  dedicated to fraud initiatives

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Types of fraud

• Accommodation related fraud - non residence
• Owner Occupiers
• Non-disclosure of other properties

• Income related fraud
• Living together as husband and wife
• Postal redirections
• Multiple Identities

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Operation St.Thomas

• INVESTIGATION
• Joint operation with Benefit Agency
• 14 false claims identified
• 250,000 other fraud uncovered
• Three arrested / charged - 4 years imprisonment

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Corporate Fraud Team Investigations

• Misuse of time
• Overpayment of salaries and wages
• Car mileage
• Petty cash
• Misuse of resources

• Overcharging by contractors
• Cheque Fraud
• Unofficial Funds
• Theft of cash
• Theft/Misuse of Equipment or Material

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Why Do People Commit Fraud?
POOR INTERNAL CONTROLS
Because they were trusted!
Because they had to!
Because they wanted to!
Because they could!
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The Anti Fraud Strategy

• Codes of Conduct for Officers Members
• Financial Regulations
• Accounting Procedures
• Internal Audit
• Disciplinary Procedures
• Whistle Blowing Policy
• Criminal Acts Procedure

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THE END