Agenda item

Chris Wallace asked the Chairman of the Audit Committee the following question.

Minutes:

Question

A report was presented to the Audit Committee last December (Item 33) “Update on HRA Rent Audit” that showed an action plan to correct the faults found in the 2015/16 Rent Audit. The minutes show that “A further update would be provided at the Committee’s next meeting” but this doesn’t appear at any meeting since.  Could you explain why, almost a year later, the current Audit Report (Pg 91/2 of this meetings' report pack) still shows Housing Rents and Debtors rated 3rd of 4?

 

Answer

A follow up review of the audit actions was completed in 2018 and a report issued within Wokingham Borough Council on 14 June. This is where the current grade 3 for the HRA rents has arisen from.

 

The report from the Council’s Internal Auditors stated the number of outstanding actions had reduced from six to three so progress is being made, and the report did say that ‘Considerable progress has been made to address the concerns raised last year, with the majority of countermeasures either implemented or near to being implemented.’

 

The three outstanding concerns are:

 

1 The older debt becomes, the more difficult it is to collect.

2 Without the required documentation in place, there is a risk that the tenancy is based on inaccurate information; and

3 Manual intervention is time consuming for staff and can causedelays.

 

On 10 September and further follow up Internal Audit were provided with evidence that the third concern, that manual interventions were time consuming, has been mitigated and this will be tested in November at the next review.

 

The other two concerns have not yet been mitigated as there is not all of the required documentation being obtained for new tenants, as I understand.  However this again will be reviewed in November, so it might be mitigated by then. The older debts are in the process of being recovered however there are still significant sums that officers are chasing.  The arrears have reduced from £900,000 as at March this year, however it had not been reduced sufficiently by June to say that there was no longer a risk to the Council.

 

While progress is being made, and at the end of week 31, so Sunday 4 November 2018, over 100% of the projected rent had actually been collected for this financial year.  Internal Audit have emphasised the need to keep ongoing pressure as it is a high profile issue. Therefore, the audit opinion remains at 3rd of 4 due to the amount of the debt involved, even though progress has been made in reducing the amount outstanding, and they are likely to keep this open for the foreseeable future.  So I think the comment is that progress is being made.  The aim is to mitigate this by the end of 2020 year end and so all efforts are being put into chasing the arrears and that is why it is still rated 3 out of 4 because there is not yet the evidence that all the possible arrears that we could recover, have been recovered.

 

Supplementary Question:

I don’t know whether you are aware that in 2016, prior to that report with a small amount of errors, an investigation was done by Tony Newman of HQN, I don’t know whether you have seen the report.  It had a list of 62 recommendations on rent arrears management.  A lot of those still have not been implemented 2 and a half years later and because of that, tenants who pay by Direct Debit or standing order are still getting demand letters and statements showing arrears.  One tenant has had three since March, an elderly lady, and she does not owe anything.  She pays by Direct Debit but it is about the timing in the month.  Now those are still being sent out to tenants.  Why?  Also, your reports are showing that between 1000 and 1500 tenancies a month are in arrears when 600 of them pay by Direct Debit.  Are sure that is a correct figure and are you wasting time chasing up people?

 

Supplementary Answer:

What I will say is that I do not know the precise answer to that one.  I do not believe we have someone from the HRA team here tonight who would be able to answer that.  However, Bob will take that and action it and find out a detailed answer.  If there is an issue that people are being charged because of something like that, that is not what the six concerns that I was told had driven the HRA Internal Audit findings.  That is a different circumstance.  If Internal Audit are doing a subsequent review in November, can this be added to their work programme?

 

I do not think we have too much rent at the moment because that 100% does include some allowance for people who have not paid.

 

The Vice Chairman added the following:

 

The reason why we have over 100% paid is because of the way it is shown on the books.  We have collected, for sake of argument, 98% of the outstanding rent and 4% of previously outstanding rent, so that gives 102% for this year.  So it is a way of showing figures which is confusing.  I think when you have considerations of this nature if you would like to give them to us, then we will investigate these particular, specific items through the right channels, specifically through the HRA, who are responsible for this sort of item.