Counter Measures No4 - how a trusted member of staff committed a £2.1m fraud and what LB Barnet did next

Clair Green, Director of Assurance at London Borough of Barnet tells Rachael Tiffen, Director Local Government at CIFAS, about an unprecedented fraud In December 2017, the council became aware of what turned out to be an unprecedented internal financial fraud, committed by a former member of staff then working as part of an outsourced contract. The individual responsible was prosecuted and pleaded guilty to two separate charges of ‘Fraud by Abuse of Position’ and received a custodial prison sentence. Capita, the holder of the outsourced contract, underwrote the loss from the fraud to the council and money was also recovered from gambling establishments where the proceeds of the crime were largely spent. The council subsequently commissioned Grant Thornton to carry out an independent review of financial controls. This enabled the council to understand and document the circumstances under which the fraud was allowed to happen, and to identify lessons learned. The report found that there were insufficient financial controls in place in the outsourced finance and regeneration services and that the council did not have sufficient oversight. The council is now implementing a plan to increase financial controls through revised procedures and processes including increased controls of payments and revised schemes of delegation. Clair explains that Barnet Council are keen to be as open and transparent as they can be about the incident, to learn for themselves and to share that learning with others.