Meeting documents

To receive the attached report.

Contact Officer:  Nuala Donnelly (01296) 585164

The Committee received a report from the External Auditors on their work associated with the certification of grant claims for 2017/18 submitted by AVDC.

From 1 April 2015, the duty to make arrangements for the certification of relevant claims and returns and to prescribe scales of fees for this work had been delegated to the Public Sector Audit Appointments Ltd (PSAA) by the Secretary of State for Communities and Local Government.

For 2017-18, these arrangements required only the certification of the housing benefits subsidy claim.  In certifying this the external auditors had followed a methodology determined by the Department for Work and Pensions and had not undertaken an audit of the claim.  Instead, the work involved executing prescribed tests which were designed to give reasonable assurance that claims and returns were fairly stated and in accordance with specified terms and conditions.  Where initial testing errors in the calculation of benefit or compilation of the claim were found, the certification guidance required the auditors to complete more extensive ‘40+’ or extended testing.  Extended testing for 2017/18 had identified errors which had impacted on the claim and, as such, had issued a qualification letter in line with the guidance.  The total extrapolated value of the errors identified and detailed below which had not been amended was £7,541.

The external auditors reported that they had checked and certified the housing benefits subsidy claim with a total value of £44,030,312.  This had allowed them to meet the submission deadline.  A qualification letter had been issued, details of which were included in section 1 of the report.

The certification work had found errors which the Council had corrected, having a marginal effect on the grant fee, and also identified some extrapolated errors, as reported in the qualification letter.  The main findings in 2017-18 had related to:-

·                    Non-HRA rebate cases:  2 errors had been identified in the initial testing.  The one impacting the claim had related to the calculation of earned income.  The claim had been adjusted with an overall effect on the value by £34.

·                    Rent allowance cases:  4 errors had been identified in the initial testing in the areas of earned income, self-employed earning and rent.  Two more failures had been identified in rent but not further failures had been found in the other areas.

One error had been identified in the initial population of 20 cases which had resulted in an underpayment of benefit.  However, as the issue had been reported in the 2016/17 Qualification Letter and the nature of the error was such that either an underpayment or overpayment might arise, the external auditors had tested an additional random sample of 40 cases selected from a sub population of claims containing earnings.  This had identified the following errors:

o        Earned Income – 1 underpayment and 2 overpayment.  These were similar to errors reported in the Qualification letter in 2015/16 and 2016/17.

o        Self Employed Earnings – 1 error in the initial random sample of 20 cases which had resulted in an overpayment of benefits.  No further errors had been identified.  Similar findings had been reported in the Qualification letter in 2015/16 but not in 2016/17.

o        Rent – 1 error in the initial random sample of 20 cases which had resulted in an underpayment.  An additional 40 rent cases containing rent at the affected Housing Association where the initial error had occurred had been done and this had identified 2 cases where the rent amount was insufficiently supported resulting in an underpayment of benefit.  As there was no eligibility to subsidy for benefit which had not been paid the 2 underpayments did not affect subsidy and had not, therefore, been classified as errors for subsidy purposes.  No other errors had been found in the 40+ testing.

The Committee was informed that the indicative certification fee for 2017/18 had been £17,411, which had been set by the PSAA.  From 2018/19, the Council had been responsible for appointing their own reporting accountant to undertake the certification of the housing benefit subsidy claim in accordance with the Housing Benefit Assurance Process (HBAP) requirements that had been established by the DWP.  Ernst and Young had been appointed to undertake this work in 2018/19.

RESOLVED –

That the external auditors report on the certification of claims and returns by AVDC for 2017/18 be noted.