# Progress Report Counter Fraud November 2020

For all your assurance needs

## Contents Key Messages

Page 2-3
Fraud Investigations 2020/21
Referrals
Outcomes
Page 4-5
Proactive Work 2020/21
Pro-active Work Fraud Awareness 
Page 6
Lincolnshire Counter Fraud Partnership
Page 7
Planning 
Page 8
Strategic Response 
Page 9-25
Appendices
Appendix B - Counter Fraud Plan 2020/21 Appendix C & D - Fighting Fraud and Corruption Locally assessment checklist

## Lucy Pledge  - Head Of Audit And Risk Lucy.Pledge@Lincolnshire.Gov.Uk

Dianne Downs - Audit Team Leader
Dianne.downs@lincolnshire.gov.uk

This report has been prepared solely for the use of Members and Management of Lincolnshire County Council. Details may be made available to specified external organisations, including external auditors, but otherwise the report should not be used or referred to in whole or in part without prior consent.  No responsibility to any third party is accepted as the report has not been prepared, and is not intended for any other purpose.

The matters raised in this report are only those that came to our attention during the course of our work - there may be weaknesses in governance, risk management and the system of internal control that we are not aware of because they did not form part of our work programme, were excluded from the scope of individual audit engagements or were not bought to our attention.  The opinion is based solely the work undertaken as part of the agreed internal audit plan.

## Introduction Key Messages

We are making good progress despite the dramatic change in circumstances brought about by the Covid-19 pandemic.   This has obviously brought about enormous change in everyday life and also raises the inherent risks of fraud so there has been impact on our work during 2020/21.  We have had to make significant changes to our 2020/21 Counter Fraud Work Plan accordingly. However, we have been able to readjust to plan and deliver several areas of proactive work including the submission of approximately 800,000 data records to the Cabinet Office to be matched and analysed within the 2020/21 National Fraud Initiative exercise.  We have also successfully completed the annual review of the council's Fraud Risk Register taking into account the challenges and risks posed by Coronavirus. We have continued to see high demand for fraud investigation work between April and September 2020 with 11 new fraud referrals made.   3 cases commenced in 2019/20 remain ongoing and 9 cases have been concluded during the 6 months to September 2020. Currently, we have 11 cases open at varying stages of completion. Fraud recoveries have been limited to date although valuable work has been completed and is ongoing in several areas to be covered in the main body of this report.  Our preventative work also identified and stopped a mandate fraud attempt valued at £60k.

## Fraud Referrals

We have received 11 fraud referrals in 2020/21 (6 months) so far in comparison to 15 reports at this stage in 2019/20.   There has been a noticeable change in pattern from recent years in that while we have seen less cases referred, they are larger and more complex cases.  The trend we had identified in 2018/19 and 2019/20 was there were higher numbers of less complicated cases.  This is an interesting shift that we will continue to monitor and analyse. The most prevalent fraud areas in 2020/21 so far have been Procurement - low level and high level cases being identified and also Social Care.  These are both identified as Amber rated risks within the Fraud Risk Register. Please see the analysis of referrals received in 2020/21 to date (by type).  

Fraud referrals by type
2018/19 2019/20 2020/21 (to date)

9misuse of assetsinsurancebank mandateexpenses/timesheetsocial caretheftrecruitmentprocurementschools

We
   concluded
           an
             investigation
                       in

June 2020 relating to a timesheet
fraud.
       The financial value involved

Our long term and continued work to
ensure awareness of mandate fraud
has continued to help prevent the
council becoming victim to fraud of
this nature.

prevented any police action being
taken.
       However, we were able to

An
   approach
           was
                made
                     by
                         an

pursue and secure the value of the
fraud
      (£2.7k)
             through
                      a
                         deduction

alleged
         contractor
                     requesting
                                 an early
       payment
                  due
                        to
                             financial

from their earnings.
This
      supports
                 one
                       of
                            the
                                 main

hardship.
           The
                Council's
                           Finance

elements
         of
            LCC's
                   Counter
                            Fraud

team
     identified
              that
                   the
                        request

Policy
       in
           that
                we
                     follow
                             through maximum
        sanctions
                 and
                      pursue

seemed suspicious and the payment
of £60k was consequently prevented.

recovery of funds lost through fraud
wherever possible.

## Investigation Outcomes

We have been able to close down 9 cases during the year to date with 11 investigations currently ongoing.  Where the circumstances warrant, we submit cases to Action Fraud (the UK's national reporting centre for fraud) or we refer them directly to Lincolnshire Police.

However, the value of loss or insufficient evidence can be a barrier to further action being taken.  Sanctions and recoveries are key elements of the Council's Counter Fraud Policy so we do make all efforts to ensure we pursue fraudsters to ensure maximum sanctions are taken.

## Cases With Police Or Action Fraud

We currently have 5 cases at various stages of police 
investigation at this time.
5

## Recoveries Made

We have made 2 recoveries at value of £3k during 2020/21 
2
1 employee has been dismissed following the disciplinary 
1
process so far this year. A further employee has received a Final 
Written Warning.

## Management Action

1 employee was handed a warning following a case involving 
time recording irregularities. 
3

## Resignations

3 of our investigations resulted in the employee resigning. 
3

Depending on the issues involved we tend to continue 
investigations to ensure correct sanctions are applied.

to date.

## Dismissal

We have reviewed and re-prioritised our work plan to reflect revised risks, respond to pandemic circumstances and direct resources to complex investigations. This has allowed us to focus on emerging and high risk areas.  
However, we have been successful in completing some areas of work and will be continuing our 'post Covid-19' reviews during the remainder of 2020/21.  

## Fraud Risk Register

One of the key areas within our Work Plan is to complete the annual update of the Fraud Risk Register.  Working closely with Risk Owners, we concluded that while inherent risks are definitely raised, the controls in place are mitigating the residual risks.  To aid management of the fraud risks relating to Coronavirus, we have created a separate risk within the register to allow up to date intelligence to be gathered to ensure we can respond actively to the changing risks. 

## Midland Fraud Group

We lead on this network of local authorities and it has been a valuable source of knowledge sharing and information during recent months. 

Group members have regularly updated throughout on relevant frauds and intelligence. We are hosting a virtual meeting of the group in November 2020.

## Data Analytics

In response to recent frauds involving the misuse of purchasing cards we now liaise with the Business Support Team to proactively review card transactions.  
This ongoing analysis has provided us with improved and knowledge in this area and has helped us identify a case that we are currently investigating. 

National Fraud Initiative 2020/21
We have submitted the necessary data to the Cabinet Office for the above exercise.  This involved capture and preparation of over ¾ million records relating to pensions, payroll and creditors data to be used for data matching purposes.  The reports will be released in January 2021 and these will be analysed at that time.  This has proved a useful exercise in recent years with substantial overpayments identified and recovered. 

## Fighting Fraud Locally

The Local Government Fraud Strategy has been updated in 2020.  Following on from our success in the 2019 
Government Counter Fraud Awards, we were approached to develop material to be issued to schools to help them prevent and detect fraud.  We have worked with Mazars to produce draft guidance. This is scheduled for national release later in 2020. 

## Fraud Awareness

Fraudsters will seek to exploit the uncertainty created by major and unexpected events - the current Coronavirus issue is no exception. It is not surprising that much of our recent fraud awareness work has centred around Covid19.  Obviously this was (and remains) an unprecedented and rapidly changing scenario.   We received intelligence at the outset of lockdown, that scams and frauds around supply of PPE were prevalent - this enabled us to respond quickly and ensure Health and Wellbeing colleagues were aware of the potential risks. As the pandemic progressed, there seemed to be a shift in focus towards cyber fraud as a prevalent fraud area including phishing attempts, spoofing and other forms of fraud based around use of technology.  We liaised with Information Assurance colleagues to ensure that awareness of these frauds were heightened amongst employees and the public. We also ensured intelligence was forwarded to regional and Lincolnshire Counter Fraud Partnership (LCFP) colleagues. Moving forwards, we have now updated our communications plan to ensure fraud messages continue to be disseminated to ensure a high level of awareness is maintained.  

## Key Items Within The Plan Are: International Fraud Awareness Week

We have developed fraud messages and information to be promoted during IFAW (15-21 
November 2020)

## Targeted Communications

We are working closely with specific services to develop key awareness relevant to their work. 

These include Children's Services and Business Support

## Fraud Newsletter

We are working on a staff newsletter providing updates and information to staff to help promote awareness

## Lincolnshire Counter Fraud Partnership

We continue to work with our partners to protect the Public Purse in Lincolnshire. The Partnership works to improve fraud resilience and fraud proofing across Lincolnshire by improving fraud intelligence, raising fraud awareness, sharing fraud intelligence, best practice and expertise. It does this by:

Sharing best practice for 
managing Covid 19 business 
grants to maximise fraud 
prevention and detection 
Refreshing the Fraud Awareness 
e-learning to reflect current fraud 
statistics and Covid-19 related 
fraud risks

## Raising Fraud Awareness By Sharing Pro-Active Fraud Awareness Campaigns: Providing Supplies Of The Updated Fraud Leaflet And Poster And Developing A Fraud Newsletter Supporting District Councils To Generate Revenue From Council Tax Fraud And Error:

Due to unprecedented circumstances and other priorities (pandemic and devolution) it has been more difficult to progress proposals for generating revenue from Council Tax fraud and error - both the Single Person Discount [SPD] Bulk Review (scheduled April 2020) and the business case for a Continuous Rolling Review and referrals were placed on a temporary hold. Work is now on-going to re-schedule the planned work.

Managing local and national 
intelligence sharing about 
emerging risks and threats
Providing and managing a 
single point of contact across 
Lincolnshire for the 
Confidential Reporting Line

## Planning Key Areas In The 2020/21 Work Plan

As reported to Committee within the update of the Fraud Risk Register, our planned work was understandably impacted by the pandemic.  It was necessary to revise and review the priorities for our 2020/21. 

The main areas identified for delivery during 2020/21 have been to ensure fraud awareness was promoted.  Fraud risks are raised at this time and we have been required to respond quickly to ensure messages were issued to help understanding of potential frauds and scams.  We have also been required to continue delivery of fraud investigations. 

As we approach the second half of the year, we have adapted our plans to ensure 'post Covid-19 reviews' are carried out.  The aim of these is to identify potential frauds and to provide assurance on controls. The main areas of focus are noted below. 

## Other Proactive Work

Payment & 
Procurement 
Fraud
Creditor 
Fraud

The original Counter Fraud Work for 2020/21 Plan presented to the Audit Committee is included as Appendix to this report. 

As noted above, it has not been possible to deliver work as originally planned. 

Where we have been able to make progress or complete against tasks these are endorsed within pages 9 to 15. 

Payroll & 
Cyber 
Fraud
Employee 
Fraud

## Strategic Response

A new national strategy: Fighting Fraud and Corruption Locally, A strategy for the 2020's, A response to economic crime and fraud.

(**FFCL**) (Published March 2020) https://www.cipfa.org/services/counter-fraud-centre/fighting-fraud-and-corruption-locally The new national strategy is aimed at all those charged with governance in local authorities, including those on audit committees, council leaders, chief executives and finance directors and succeeds the previous strategies written in 2011 and 2016.

## Key Themes Around 'Acknowledge',  **'Prevent' And 'Pursue**' Have Been Continued,  Together With Increased Focus On Arrangements To **'Govern' & 'Protect**'.

The '**Govern**' strand recognises having a holistic approach to tackling fraud is part of good governance. It recommends having robust arrangements and executive support to ensure antifraud, bribery and corruption measures are embedded throughout the organisation. The strategy provides self-assessment checklists for local authority Counter Fraud arrangements and recommended actions for senior stakeholders. 

## Other Proactive Work

Our Response:
Compliance with the strategy and measurement against checklists are not mandatory, but FFCL provides a best practice framework for local authorities to deliver a robust response to threats of fraud and corruption. Appendices 2 and 3 to this report reflect LCC's assessment against FFCL's expected roles and responsibilities and blueprint approach. We have recorded our current response and identified areas for future actions to be built into future Counter fraud work plans. The assessment found that the council has many of the components for a strong counter fraud framework in place which already meets best practice.  It has established essential elements of a strategic response to fraud in a policy framework which promotes a zero tolerance to fraud.  The counter fraud strategy underpins the council's commitment to prevent and detect fraud. 

## Further Consideration/ Actions

The assessment identifies several suggestions for further improvements for LCC to be in line with current counter fraud best practice.  Specific actions will enable the council to clearly define and embed its approach and improve its resilience to fraud and corruption.   Key areas include: 

- Governance and leadership - Identifying fraud risks - Counter fraud policy - Partnership working and use of data

## Nature Of Work And Indicative Scope Scheduling Specific Step (From Cipfa Code Of Practice) Cipfa Code Of Practice - Key Principle A : Acknowledge Responsibility

Member Training and Audit Committee Support
A1 - Acknowledge the threat of fraud and corruption
Counter Fraud Annual Plan and Progress Reports to Audit Committee
Lincolnshire Counter Fraud Partnership Plan and 
Reports for Lincolnshire Finance Officers Group
A2 - Acknowledge the 
importance of a culture that is resilient to the threats of fraud and corruption
Corporate Leadership and Directorate Leadership Team training and liaison sessions Review of Terms of Reference for Lincolnshire Counter Fraud Partnership going forward

Training
A3 - Governing Body acknowledges its responsibility for the management of its fraud and corruption risks

Briefing Sessions

Engagement

Updates 

Publications
A4 - Governing Body sets a specific goal of ensuring and maintaining its 
resilience to fraud and 
corruption
Outstanding
Completed - to date
Ongoing
Outstanding Outstanding 
Nature of work and Indicative Scope        
Scheduling

## Specific Step (From Cipfa Code Of Practice)

CIPFA Code of Practice - Key Principle B : Identify Risks
Horizon Scanning Benchmarking Activity - CFACT Tracker (annual survey) and liaison with Midland Fraud Group colleagues
B1 - Fraud risks are routinely considered as part of risk management arrangements
Review historic investigations - trend analysis 
purposes
B2 - The organisation 
identifies the risks of fraud and corruption
Research and develop fraud loss estimate system Assurance Mapping process - Counter Fraud and Investigations, Audit and Risk teams Update of Fraud Risk Registers
B3 - The organisation publishes estimates of fraud loss to aid evaluation of fraud risk exposures
Fraud Risk Register - present report to Audit Committee Identify priority service areas for awareness training
B4 - The organisation evaluates the harm to its aims and objectives 
Support for District partners on Fraud Risk Register update and development
Ongoing
Completed
Ongoing
Outstanding Ongoing Completed Completed Completed Outstanding

Annual Counter Fraud Work Plan Strategy: Refresh Counter Fraud Strategy Counter Fraud Policy
Fraud Response Plan
C1 - Governing Body formally adopts a counter fraud and corruption strategy to address identified 
risks
Whistleblowing Policy Money Laundering Policy
C2 - Strategy includes the organisation's use of joint working or partnership approaches
Refresh investigation practice notes
Refresh Communications Strategy
C3 - The strategy includes both 
proactive and 
responsive approaches:
Feasibility study for establishment of a County wide data hub General horizon scanning
Fighting Fraud and Corruption Locally - response
Completed Counter fraud policies currently 
under 
review. Updates 
due for internal consultation ahead of presentation to February /March Audit Committee
Outstanding
Ongoing Outstanding Ongoing
Ongoing

## Nature Of Work And Indicative Scope Specific Step (From Cipfa Code Of Practice) Cipfa Code Of Practice - Key Principle C : Develop A Strategy Proactive Action:

- Develop counter 
fraud culture
- Prevent fraud 
through implementation of robust internal controls
- Use of techniques 
such as data matching
- Deterring fraud 
attempts by 
publicising the organisation's antifraud and corruption stance and the actions it takes against fraudsters
Responsive action:
- Detecting fraud 
through data and intelligence analysis
- Implementing 
effective whistleblowing arrangements 
- Investigating fraud 
referrals
- Applying sanctions 
and seeking redress 

Lincolnshire Counter Fraud Partnership resource Cover the Whistleblowing facility - logging reports, 
referrals and follow up action
LCC - Support and advice
D1 - Annual assessment whether level of resource invested to countering fraud and 
corruption is proportionate to the level of risk
Engagement with national and regional best practice groups (including Midland Fraud Group) - sharing intelligence, CIPFA Standards and Fighting Fraud and Corruption Locally.
Enhance data analytic training and capability
D2 - The organisation utilises an appropriate mix of experienced and skilled staff
E-Learning
D3 - The organisation grants counter fraud staff unhindered access to its employees
D4 - The organisation 
has protocols in place to facilitate joint working and data and intelligence sharing   
Completed Ongoing Ongoing
Ongoing Outstanding Ongoing

## Nature Of Work And Indicative Scope        Scheduling Specific Step (From Cipfa Code Of Practice) Cipfa Code Of Practice - Key Principle E : Take Action

Promotion and Delivery of Communications Plan, Fraud Awareness sessions and Fraud Clinics Completion of work brought forward from 2019/20 plan
National Fraud Initiative–Processing & Reporting
E1 - The organisation has put in place a policy framework which supports the implementation of the Counter Fraud 
Strategy

## Proactive Counter Fraud Exercises - Driven By Fraud Risk Register Priorities:

E2 - Plans and operations are aligned to the strategy E3 - Making effective use of initiatives to 
detect and prevent 
fraud, such as data matching or intelligence sharing
- Support for due diligence audits - Social Care - Financial Abuse - Social Care - overstated care needs - Social Care - Financial Assessments
- Schools and establishments
- Cyber Fraud - Procurement and Contract Management - Payroll and Employees - Payments and Creditors - False Accounting - Identity Fraud - Insurance
E4 - Providing for independent assurance over fraud risk management, 
strategy and activities
E5 - Report to the Governing Body at least annually on performance against the counter fraud strategy and the effectiveness of the strategy. Conclusions are featured within the Annual Governance report  

Ongoing Completed
Completed

## Counter Fraud Work Plan Amended To Reflect Changed Work Priorities Due To Covid-19 Nature Of Work And Indicative Scope        Scheduling

Specific step 
(from CIPFA Code of Practice)

CIPFA Code of Practice - Key Principle E : Take Action
* Note also Specific Step - C3

164 Days (23%)
320 days for Investigations (45%)
Nature of work and Indicative Scope        Scheduling
Specific step (from CIPFA Code of Practice)
Contingency
Emerging risks 
73 Days (10%) TOTAL - 726 DAYS 

## What Should Senior Stakeholders Do?

| Ref                                                   | FFCL 2020s strategy Requirements               |
|-------------------------------------------------------|------------------------------------------------|
| Future plans/                                         |                                                |
| further action                                        |                                                |
| required                                              |                                                |
| Chief Exec                                            |                                                |
| 1.Ensure that your authority is measuring itself      |                                                |
| against the checklist for FFCL                        |                                                |
| 2. Is there a trained counter fraud resource in your  |                                                |
| organisation or do you have access to one?            |                                                |
| 3. Is the audit committee receiving regular reports   |                                                |
| on the work of those leading on fraud and is the      |                                                |
| external auditor aware of this?                       |                                                |
| S151                                                  |                                                |
| 1.                                                    | Is there a portfolio holder who has fraud      |
| within their remit?                                   |                                                |
| 2.                                                    | Is the head of internal audit or counter fraud |
| assessing resources and capability?                   |                                                |
| 3.                                                    | Do they have sufficient internal unfettered    |
| access?                                               |                                                |
| 4.                                                    | Do they produce a report on activity,          |
| success and future plans                              |                                                |
| and are they measured on this?                        |                                                |
| Monitoring                                            |                                                |
| Officer                                               |                                                |
| 1. Are members, audit committees and portfolio        |                                                |
| leads aware of counter fraud activity and is training |                                                |
| available to them?                                    |                                                |
| 2. Is the fraud team independent of process and       |                                                |
| does it produce reports to relevant committees that   |                                                |
| are scrutinised by members?                           |                                                |
| Audit                                                 |                                                |
| Committee                                             |                                                |
| 1.Should receive a report at least once a year on     |                                                |
| the counter fraud activity which includes proactive   |                                                |
| and reactive work                                     |                                                |
| 2. Should receive a report from the fraud leads on    |                                                |
| how resource is being allocated, whether it covers    |                                                |
| all areas of fraud risk and where those fraud risks   |                                                |
| are measured                                          |                                                |
| 3. Should be aware that the relevant portfolio        |                                                |
| holder is up to date and understands the activity     |                                                |
| being undertaken to counter fraud                     |                                                |
| 4. Should support proactive counter fraud activity    |                                                |
| 5. Should challenge activity, be aware of what        |                                                |
| counter fraud activity can comprise and link with the |                                                |
| various national reviews of public audit and          |                                                |
| accountability.                                       |                                                |
| Portfolio                                             |                                                |
| Lead                                                  |                                                |
| 1. Receives a regular report that includes            |                                                |
| information, progress and barriers on:                |                                                |
|                                                      |                                                |
| The assessment against the FFCL checklist             |                                                |
|                                                      |                                                |
| Fraud risk assessment and horizon                     |                                                |
| scanning.                                             |                                                |
| Yes                                                   |                                                |
| Yes - Counter Fraud &                                 |                                                |
| Investigations Team (CFIT)                            |                                                |
| Yes - annual and interim                              |                                                |
| Counter Fraud Progress                                |                                                |
| reports to Audit Committee                            |                                                |
| Yes, named Counter Fraud                              |                                                |
| Champion Cllr. Maughan                                |                                                |
| Yes - dedicated Counter                               |                                                |
| Fraud resources allocated                             |                                                |
| to match risk areas,                                  |                                                |
| management monitoring in                              |                                                |
| place                                                 |                                                |
| Yes - right of access                                 |                                                |
| defined in Audit Charter                              |                                                |
| Annual and interim Counter                            |                                                |
| Fraud                                                 |                                                |
| Reporting to Audit                                    |                                                |
| Committee                                             |                                                |
| Develop the reporting of                              |                                                |
| counter fraud arrangements                            |                                                |
| to the Executive, Members                             |                                                |
| and senior managers                                   |                                                |
| Yes - regular fraud training                          |                                                |
| with Audit Committee.                                 |                                                |
| Fraud is covered in                                   |                                                |
| Members Handbook.                                     |                                                |
| Members induction                                     |                                                |
| arrangements to cover                                 |                                                |
| fraud (proposal in                                    |                                                |
| development)                                          |                                                |
| Yes - independence                                    |                                                |
| defined in Audit Charter.                             |                                                |
| Annual and interim                                    |                                                |
| reporting of counter fraud                            |                                                |
| Receive annual and interim                            |                                                |
| reports                                               |                                                |
| Annual Counter Fraud Work                             |                                                |
| Plan and Fraud Risk                                   |                                                |
| Register update                                       |                                                |
| Yes - regular counter fraud                           |                                                |
| liaison by CFIT Team                                  |                                                |
| Leader                                                |                                                |
| Yes                                                   |                                                |
| Regular liaison                                       |                                                |
| Covered in regular reporting                          |                                                |
| to Audit Committee.                                   |                                                |

| Ref                                           |
|-----------------------------------------------|
| Future plans/                                 |
| further action                                |
| required                                      |
| The local authority has made a proper         |
| assessment of its fraud and corruption        |
| risks, has an action plan to deal with them   |
| and regularly reports to its senior Board     |
| and its members.                              |
| The local authority has undertaken a fraud    |
| risk assessment against the risks and has     |
| also undertaken horizon scanning of           |
| future potential fraud and corruption risks.  |
| This assessment includes the                  |
| understanding of the harm that fraud may      |
| do in the community.                          |
| There is an annual report to the audit        |
| committee, or equivalent detailed             |
| assessment, to compare against FFCL           |
| 2020 and this checklist.                      |
| The relevant portfolio holder has been        |
| briefed on the fraud risks and mitigation     |
| The audit committee supports counter          |
| fraud work and challenges the level of        |
| activity to ensure it is appropriate in terms |
| of fraud risk and resources                   |
| Fraud risks register                          |
| reviewed annually and                         |
| reported to Audit                             |
| Committee.  Counter                           |
| fraud Work Plan is                            |
| aligned to high fraud                         |
| risk areas.                                   |
| Regular horizon                               |
| scanning performed.                           |
| Safer Lincolnshire                            |
| Partnership Strategic                         |
| Plan covers fraud                             |
| against the public.                           |
| Fraud sub-group                               |
| tackles highest risks -                       |
| current focus is                              |
| scams.                                        |
| Annual and interim                            |
| Counter Fraud reports                         |
| taken to Audit                                |
| Committee.  FFCL                              |
| comparison included                           |
| in audit committee                            |
| report.                                       |
| Regular liaison with                          |
| Fraud Champion                                |
| Annual Counter Fraud                          |
| Work Plan agreed with                         |
| Audit Committee                               |

| Ref                                          |
|----------------------------------------------|
| Future plans/                                |
| further action                               |
| required                                     |
| There is a counter fraud and corruption      |
| strategy applying to all aspects of the      |
| local authority's business which has been    |
| communicated throughout the local            |
| authority and acknowledged by those          |
| charged with governance.                     |
| The local authority has arrangements in      |
| place that are designed to promote and       |
| ensure probity and propriety in the          |
| conduct of its business.                     |
| The risks of fraud and corruption are        |
| specifically considered in the local         |
| authority's overall risk management          |
| process.                                     |
| Counter fraud staff are consulted to fraud-  |
| proof new policies, strategies and           |
| initiatives across departments and this is   |
| reported upon to committee.                  |
| Successful cases of proven                   |
| fraud/corruption are routinely publicised to |
| raise awareness.                             |
| There is a Counter                           |
| Fraud Policy in place                        |
| which is being                               |
| updated to take                              |
| account of the latest                        |
| national guidance.                           |
| Update the Counter                           |
| Fraud Policy to reflect                      |
| national guidance.                           |
| The policy review will                       |
| include raising                              |
| awareness of it with                         |
| staff and Membe                              |
| rs.                                          |
| Business                                     |
| arrangements are                             |
| underpinned with                             |
| internal control                             |
| requirements.                                |
| Regular liaison                              |
| between Internal Audit                       |
| and CFIT.                                    |
| LCC's overall risk                           |
| management process                           |
| considers fraud risks                        |
| Counter fraud staff                          |
| review key policies                          |
| and initiatives for                          |
| counter fraud                                |
| arrangements                                 |
| Annual                                       |
| Communication Plan                           |
| includes publicising                         |
| relevant fraud cases                         |

## Lcc Counter Fraud Arrangements Ref Ffcl 2020S Strategy Requirements Current Response Future Plans/ Further Action Required

The local authority has put in place arrangements to prevent and detect fraud and corruption and a mechanism for ensuring that this is effective and is reported to committee The local authority has put in place arrangements for monitoring compliance with standards of conduct across the local authority covering: - codes of conduct including behaviour for counter fraud, anti-bribery and corruption - register of interests - register of gifts and hospitality.

Dedicated specialist Counter Fraud team. Regular reporting to Audit Committee of results and progress.  
Delivered 87% of tasks in 2019/20 Work Plan.  £114k fraud recovery in 2019/20 £1.56m fraud stopped. Peer review report on LCC counter fraud arrangements issued March 2019 - substantial assurance.  
Pro-active fraud awareness campaigns and initiatives. The effectiveness of counter fraud arrangements are measured by a combination of regular reporting to Audit Committee, participating in the annual fraud survey and benchmarking against good practice. The overall feedback from the review conveyed confidence in the counter fraud arrangements being delivered by the Audit 
& Risk Team.  
Codes of conduct set out counter fraud requirements. Established procedures covering register of interests, gifts and hospitality. Regular fraud awareness messages.

| Ref                                       |
|-------------------------------------------|
| Future plans/                             |
| further action                            |
| required                                  |
| Members and staff are aware of the need   |
| to make appropriate disclosures of gifts, |
| hospitality and business. This is checked |
| by auditors and reported to committee.    |
| There is a programme of work to ensure a  |
| strong counter fraud culture across all   |
| departments and delivery agents led by    |
| counter fraud experts.                    |
| There is an independent and up-to-date    |
| whistleblowing policy which is monitored  |
| for take-up and can show that suspicions  |
| have been acted upon without internal     |
| pressure.                                 |
| Contractors and third parties sign up to  |
| the whistleblowing policy and there is    |
| evidence of this. There should be no      |
| discrimination against whistleblowers.    |
| Procedures                                |
| established for                           |
| reporting of gifts and                    |
| hospitality.  Audit                       |
| assurance rated                           |
| limited (officers) and                    |
| substantial                               |
| (members).                                |
| Covered in annual                         |
| Communications Plan                       |
| and specific                              |
| Campaign Plans to                         |
| raise fraud awareness                     |
| Whistleblowing Policy                     |
| in place (reviewed                        |
| 2018).  Publicises the                    |
| Council's confidential                    |
| Whistleblowing facility                   |
| to encourage referral                     |
| of suspicious activity.                   |
| Referrals handled                         |
| independently by                          |
| CFIT.  Annual                             |
| whistleblowing report                     |
| to audit committee.                       |
| Contracts touch on                        |
| responsibilities of                       |
| contractors and third                     |
| parties for fraud.                        |
| Review the                                |
| arrangements                              |
| established with                          |
| contractors and third                     |
| parties for raising                       |
| awareness of                              |
| whistleblowing                            |
| arrangements                              |

| Ref                                           |
|-----------------------------------------------|
| Future plans/                                 |
| further action                                |
| required                                      |
| Fraud resources are assessed                  |
| proportionately to the risk the local         |
| authority faces and are adequately            |
| resourced.                                    |
| There is an annual fraud plan which is        |
| agreed by committee and reflects              |
| resources mapped to risks and                 |
| arrangements for reporting outcomes.          |
| This plan covers all areas of the local       |
| authority's business and includes             |
| activities undertaken by contractors and      |
| third parties or voluntary sector activities. |
| Statistics are kept and reported by the       |
| fraud team which cover all areas of           |
| activity and outcomes.                        |
| Fraud officers have unfettered access to      |
| premises and documents for the purposes       |
| of counter fraud investigation.               |
| The local authority undertakes recruitment    |
| vetting of staff prior to employment by risk  |
| assessing posts and undertaking the           |
| checks recommended in FFCL 2020 to            |
| prevent potentially dishonest employees       |
| from being appointed.                         |
| Annual review                                 |
| performed by Audit &                          |
| Risk Manager                                  |
| Annual Counter Fraud                          |
| Work Plan agreed by                           |
| Audit Committee                               |
| Key counter fraud                             |
| statistics maintained                         |
| Counter fraud staff                           |
| have unrestricted                             |
| access for the purpose                        |
| of counter fraud                              |
| investigation                                 |
| Recruitment checks                            |
| established.                                  |
| Audit assurance rated                         |
| as substantial.                               |
| Identity fraud training                       |
| delivered by the                              |
| Police.                                       |

| Ref                                         |
|---------------------------------------------|
| Future plans/                               |
| further action                              |
| required                                    |
| There is a programme to publicise fraud     |
| and corruption cases internally and         |
| externally which is positive and endorsed   |
| by the council's communications team.       |
| There is a programme to publicise fraud     |
| and corruption cases internally and         |
| externally which is positive and endorsed   |
| by the council's communications team.       |
| All allegations of fraud and corruption are |
| risk assessed                               |
| The fraud and corruption response plan      |
| covers all areas of counter fraud work:     |
| prevention: detection: investigation:       |
| sanctions and redress.                      |
| The fraud response plan is linked to the    |
| audit plan and is communicated to senior    |
| management and members.                     |
| Annual Counter Fraud                        |
| Communication Plan                          |
| covers key fraud                            |
| cases.                                      |
| Communications team                         |
| are involved with fraud                     |
| campaigns                                   |
| As above                                    |
| Strategy meeting                            |
| considers risks and                         |
| agrees the way                              |
| forward for each case                       |
| at the outset                               |
| Annual Counter Fraud                        |
| Work Plan covers key                        |
| areas                                       |
| Fraud Response Plan                         |
| is based on regular                         |
| liaison between audit                       |
| and Counter Fraud                           |
| teams.  Audit planning                      |
| documentation                               |
| encourages auditors                         |
| to liaise with CFIT on                      |
| counter fraud.  Audit                       |
| process follows up                          |
| implementation of                           |
| management actions                          |
| regularly                                   |

| Ref                                       |
|-------------------------------------------|
| Future plans/                             |
| further action                            |
| required                                  |
| Asset recovery and civil recovery are     |
| considered in all cases.                  |
| There is a zero tolerance approach to     |
| fraud and corruption that is defined and  |
| monitored and which is always reported to |
| committee.                                |
| There is a programme of proactive         |
| counter fraud work which covers risks     |
| identified in assessment.                 |
| The counter fraud team works jointly with |
| other enforcement agencies and            |
| encourages a corporate approach and co-   |
| location of enforcement activity.         |
| Sanctions consider                        |
| recovery options                          |
| Counter Fraud Policy                      |
| states a zero tolerance                   |
| to fraud                                  |
| Annual Counter Fraud                      |
| Work Plan agreed with                     |
| Audit Committee                           |
| Collaborative working                     |
| with peers - (CFIT                        |
| lead the Midland                          |
| Fraud Group).                             |
| Participate fully in the                  |
| National Fraud                            |
| Initiative and other                      |
| relevant initiatives to                   |
| detect fraud through                      |
| data matching                             |
| exercise.  Referrals                      |
| made to                                   |
Action Fraud.  
Lincolnshire Counter Fraud Partnership provides a fraud focus with districts.  Liaison with various groups: Safer Lincolnshire Partnership and represented on its fraud sub group. Represented on various multi-agency organisations focussed on organised crime.  Part of FFCL working group.

| Ref                                        |
|--------------------------------------------|
| Future plans/                              |
| further action                             |
| required                                   |
| The local authority shares data across its |
| own departments and between other          |
| enforcement agencies.                      |
| Prevention measures and projects are       |
| undertaken using data analytics where      |
| possible.                                  |
| The counter fraud team has registered      |
| with the Knowledge Hub so it has access    |
| to directories and other tools.            |
| The counter fraud team has access to the   |
| FFCL regional network.                     |
| Work with relevant                         |
| service areas to                           |
| develop a more co-                         |
| ordinated /joined up                       |
| approach for                               |
| collecting / sharing                       |
| and responding to                          |
| intelligence received                      |
| across the council in                      |
| response to the                            |
| prevention and                             |
| detection of crime e.g.                    |
| scams.                                     |
| Respond promptly to                        |
| relevant alerts and                        |
| issues and sharing                         |
| information across the                     |
| Council which relate to                    |
| possible fraud /                           |
| suspicious activity.                       |
| Pro-active data                            |
| reviews e.g. payroll.                      |
| Established                                |
| Lincolnshire Counter                       |
| Fraud Partnership                          |
| (LCFP) - promotes:                         |
| raising awareness                          |
| through various                            |
| communications /                           |
| counter fraud briefings                    |
| fraud and leading on                       |
| the development of                         |
| fraud awareness e-                         |
| learning                                   |
| Internal Audit and                         |
| CFIT carry out                             |
| targeted analytical                        |
| reviews of key                             |
| systems and services                       |
| using IDEA to identify                     |
| indicators of fraudulent                   |
| activity                                   |
| CFIT are registered                        |
| and review                                 |
| information.                               |
| CFIT Team Leader on                        |
| FFCL Board working                         |
| group                                      |

| Ref                                           |
|-----------------------------------------------|
| Future plans/                                 |
| further action                                |
| required                                      |
| There are professionally trained and          |
| accredited staff for counter fraud work. If   |
| auditors undertake counter fraud work         |
| they too must be trained in this area.        |
| The counter fraud team has adequate           |
| knowledge in all areas of the local           |
| authority or is trained in these areas.       |
| The counter fraud team has access             |
| (through partner-ship/ other local            |
| authorities/or funds to buy in) to specialist |
| staff for: surveillance: computer forensics:  |
| asset recovery and financial                  |
| investigations.                               |
| Weaknesses revealed by instances of           |
| proven fraud and corruption are               |
| scrutinised carefully and fed back to         |
| departments to fraud-proof systems.           |
| LCC uses accredited                           |
| counter fraud                                 |
| professionals.                                |
| Regular training with                         |
| auditors about counter                        |
| fraud                                         |
| Knowledgeable and                             |
| experienced CFIT                              |
| team                                          |
| Depending on                                  |
| requirements                                  |
| Supplementary issues                          |
| covered in                                    |
| investigation reports                         |
| and shared with audit.                        |
| Learning points from                          |
| investigations are                            |
| considered and                                |
| communicated as                               |
| required.                                     |