Agenda item

To consider the certification year-end letter March 2017. 

38.1           Attention was drawn to Grant Thornton’s Certification Year End Letter 2017, circulated at Pages No. 50-54, which set out the findings of the housing benefit subsidy claim which had been certified during the year.  Members were asked to consider the information provided.

38.2           Members were advised there was a requirement with the housing benefit subsidy claim for any issues found during previous years to be automatically tested during the current year.  Testing in 2015/16 had identified three issues that required further testing during 2016/17: local housing authority (LHA) rates being misapplied; claimants’ earnings being incorrectly calculated; and rent allowance overpayments being misclassified.  The testing of claims relating to 2016/17 had identified that local housing authority rates had been misapplied, as previously reported; fuel allowance rates had not been updated and had been incorrectly applied; and non-house rent allowance (HRA) overpayments had been misclassified for subsidy purposes.  Appendix A to the report provided further details on the findings of the claim.  Members were informed that the claim had been amended by £1,421 as a result of the issues identified.  The Audit Manager from Grant Thornton wished to draw particular attention to the information on fuel allowance, set out at Page No. 52.  The initial sample had identified nine errors where the incorrect fuel allowance rate had been applied in relation to bed and breakfast accommodation.  The national rate for fuel allowance was £17.23 in 2016/17 but testing had identified that assessors were using the 2015/16 rate of £16.48 – he clarified that the figure was not automatically updated and required input from the assessor.  Errors had been found in 48 of the 71 cases tested where the incorrect rate had been applied; in the remainder, the fuel rate was not applicable so it had not been inputted.  This had been discussed with the Revenues and Benefits Manager who would be taking it up with the software provider, Northgate, to see whether it would be possible to introduce an automated process for the following year.  The indicative fee for the 2016/17 certification work was £9,110 and this was outlined at Page No. 54, Appendix B to the report.  The actual fee was calculated based on the work undertaken two years previously, in 2014/15, and a comparison exercise would need to be carried out before the final fee was confirmed; an update would be brought to the next Committee.

 38.3          In response to a query as to how Universal Credit would affect the housing benefit claim work, the Audit Manager from Grant Thornton advised that the impact on Tewkesbury Borough Council was uncertain; however, other clients had seen a 10-15% reduction in cases.  It was anticipated that the process would stay the same for at least the next year, albeit with a reduction in the number of claims.  A Member questioned how the cost would be estimated going forward, given this uncertainty, and was informed that it was based on time taken - theoretically, if there were less cases then the fee should reduce but this was not something he could be sure of.  He explained that initial testing was based on 100 cases, however, for every error identified, further testing needed to be carried out on 40 cases; if the population was below 40, 100% testing would be undertaken.  This could all have an impact on the fee but the Head of Finance and Asset Management clarified that no reduction had been factored in for budgetary purposes, particularly as Universal Credit would initially only apply to those of working age.

38.4           It was

RESOLVED          That the Grant Thornton Certification Year End Letter March 2017 be NOTED.