STP 0252-4

Action Plan in place to address payments error

  • Report to Audit and Governance Committee on 25 January
  • All monies have been fully recovered

AN INTERNAL Audit Report and Action Plan will be presented to Reading Borough Council’s Audit and Governance Committee on 25 January which details how an erroneous overpayment of circa £1 million made by the Council in July 2021 to an adult social care provider for residential care placements occurred and the action plan in place to address it.

The audit report details how an inflationary increase to a care provider was incorrectly calculated and resulted in an overpayment of £1,194,538 being made. The report makes clear that all monies have been fully recovered and that no fraud took place. Action has been taken by the Council to improve processes, including the reconciliation of payments to providers.  

Whilst the report states that the error occurred at a time when Council services were under acute strain due to the pressures brought about by the COVID pandemic, it has also highlighted a number of process weaknesses in the way payments to adult social care providers were made. At the time, the Council was determined to get payments to partners quickly during the pandemic so that providers didn’t encounter cash flow problems. 

Once the error was identified, action was taken to address the immediate risks in the payment process.

The action plan details further work to address the issues raised and ensure processes are robust and automated going forward.   

Seona Douglas, Director Adult Social Care, said: “We are very concerned about this issue and whilst this is an isolated case which was the direct result of human imputing error, it is very clear that it would have been captured if the correct checks and balances had been in place.

“In this particular case all monies have been recovered and I would like to thank the care provider for its cooperation throughout. We select our partner providers carefully and we have a good working relationship with all of them. Whilst the error was regrettable, the prompt and honest action by the provider who reported the overpayment to us was entirely consistent with the spirit of our close cooperation. 

“Work on improving processes as detailed in the action plan has already begun, with a particular emphasis on the development of automated systems to make it easier to identify potential future anomalies prior to payment and to ensure senior management has complete oversight of rate increases for providers.

“Reading Borough Council and the Council Leader rightly place great emphasis on transparency in these matters and I thank the Council’s internal audit team for their proactive approach in identifying areas for improvement.”