The Audit and Governance Committee of Newham Council met on Wednesday 12 April 2023 to review contract waivers, receive updates on internal audit work, and discuss the annual report of the Audit Committee's work. The meeting also covered the recovery of overpayments related to Council Tax and Housing Benefits, and the costs associated with this recovery.

Quarterly Report of Contract Waivers

The committee was scheduled to receive a summary of contract waivers approved between 1 January 2023 and 31 March 2023. The report detailed that eight waivers were approved and two were rejected during this period, with a total approximate value of £946,000 for approved waivers and £124,000 for rejected waivers. The reasons for these waivers included single supplier requirements, contract extensions, emergency situations, and business continuity needs. The report noted that all approved waivers were in accordance with the council's Scheme of Delegation and Contract Standing Orders (CSOs).

Quarterly Internal Audit Update

A comprehensive update on the work of Internal Audit was presented, covering the period up to 31 March 2023. This included the issuance of seven graded audit reports, with opinions ranging from Limited Assurance for the UK GDPR audit to Substantial/Substantial for audits of schools like Sir John Heron Primary School and St Angela's Ursuline School. The report highlighted that the UK GDPR audit identified significant risks due to an incomplete Register of Processing Activity (RoPA), a lack of named Information Asset Owners, and legacy data held beyond retention schedules. Other audits covered areas such as Allotments, Supporting Families grants, and the Large Additional Restrictions Grant. The update also included a self-assessment against Grant Thornton's lessons from public interest reports, identifying areas for strengthening controls in culture and governance.

Annual Report of the Work of the Audit Committee

The committee was scheduled to review its annual report for 2022/23, which summarised its activities and included an updated Terms of Reference for the committee. The report highlighted key achievements, such as the timely sign-off of the 2021/22 accounts, challenges to senior officers regarding cyber security and council tax rebates, and the recognition of Newham's Counter Fraud team. The Chair's priorities for 2023/24 were also outlined, focusing on following up on outstanding recommendations from the Internal Controls Commission, reviewing key risk areas, and supporting effective risk management. The report detailed the committee's responsibilities, including oversight of governance, risk management, internal and external audit, and financial reporting.

Actions Log Update

A supplementary agenda provided a written update on actions AC147 and AC148, which had been verbally discussed during the meeting.

• Action AC147: Council Tax Single Person Discounts and Housing Benefits Overpayments The National Fraud Initiative (NFI) identified potential overpayments related to Single Person Discounts (SPD), student loans, occupational and private pensions, and Public Carriage Office licenses. For SPD, a review of 34,833 accounts led to the ending of 1,044 SPDs, generating an additional debt of £418,000 in 2022-23. Undeclared student loans resulted in 437 overpaid claims totalling £4,435,112, with £517,702 recovered by March 2023. Occupational and private pensions led to 41 overpaid claims totalling £34,813.83, with £14,784.19 recovered. Public Carriage Office licenses were linked to 24 overpaid housing benefit claims totalling £86,940.56, with £31,759.56 recovered.

• Action AC148: Cost of Recovering Overpayments The report detailed the cost elements associated with recovering Housing Benefit overpayments. The primary financial impact is the loss of subsidy from the Department for Work and Pensions (DWP) on identified overpayments. The administrative costs of recovery were also outlined, with recovery mechanisms including deductions from ongoing Housing Benefit, deductions from other DWP benefits, and invoice demands. A dedicated team of 17 officers, costing just over £700,000, is responsible for invoice recovery. The report noted that the cost of recovery is partly supported by DWP funding.