Minutes:
Documents:
· Internal Audit Report – ECO2
Discussion:
· The report refers to the Energy Company Obligation which is funded by large energy companies to encourage energy efficiency and reduce carbon emissions
· It offers replacement boilers or insulation to those on low incomes and whose homes have an F or lower EPC rating
· ECO2 ran between 1 April and 30 September 2018
· Powys County Council undertook the vetting process and the Internal Audit report considers whether it acted responsibly and had adequate vetting procedures
· A Statement of Intent had been produced and was in accordance with BEIS and Ofgem guidance.
· The Authority was also compliant in defining the qualifying criteria
· 15,500 measures were delivered across the UK with 2048 being within Powys. This is a high proportion but had been explained by the large volume of off-gas properties in the area.
· The Authority was required to process self-assessed claim forms – a client was required to tick a box indicating that they were in fuel poverty and that the property was inefficient. The client was required to sign a declaration that the claim had been completed honestly and correctly.
· An allegation was made by the Powys Plumbing Group that there was widespread fraud although no evidence was forthcoming of fraudulent applications
· The authority was not responsible for the actions of applicants but could be considered as having a moral responsibility as a steward of the funds
· A charge of £150 was made by the Authority for the checking of the claim forms which included a check of the EPC rating. No check of financial criteria or fuel poverty was made.
· The audit found that there was not a robust process in place to check eligibility and the process did not protect the Council against fraud. Records maintained were minimal. A sample was undertaken and 21% of the sample did not meet the criteria. Housing undertook and more extensive sample and found that 12% did not meet the criteria.
· The Approved Agents list was also checked with 18 of the 19 being approved, registered installers. The selection of these agents lacked transparency
· The Council has objectives to develop the local economy. Only one local agent met the qualifying criteria although a number of local companies were used as sub-contractors.
· The scheme generated income for the Council of £231K. Fees were paid by the agents, not the clients.
· Invoicing may not have taken place on completion of the measure if the agent did not advise completion. The report found 162 measures had not been invoiced. A suggestion was made that an invoice should be raised at the start of the process for future schemes.
· There was no evidence of fraud within the Council processes. If fraud has occurred, it has happened between the client and the agent, which is outside the jurisdiction of the County Council.
· Members suggested that the system selection was weak. In addition there was a lack of guidance to support the scheme. The volume of applications was also much larger than anticipated. Guidance for ECO 3 is much more prescriptive.
· Members had been concerned given the level of activity within their wards. However, it was reiterated that no fraud was identified within the Council.
· Members also questioned how many Powys staff had taken up the scheme. The Assistant Director, SWAP would look into the matter.
· The Committee were concerned regarding the reputational damage to the Council – on many occasions, canvassers were giving the impression that this was a County Council scheme. The Authority had charged for checking and whilst it may not be fraud, it could be considered mismanagement.
· Members asked whether a recharge of officer time had been considered and whether it was ‘known’ or ‘approved’ contractors that had been used – Powys had adopted Green Deal approved providers/installers. No review of recharges had been undertaken
· Other local authorities Statements of Intent mirrored that used by the Authority although a few had more detailed documentation. No response has been received regarding vetting processes.
· It was thought that the scheme was a good one but that improvements needed to be made for future schemes to avoid similar issues
· Members asked what vetting was undertaken by the Authority – if a resident was in fuel poverty it iwas likely that they would appear on other claimant lists
· The Portfolio Holder for Corporate Governance, Housing and Public Protection had not been portfolio holder when the scheme came into being and only became aware of the issues when residents contacted him. Following a meeting at County Hall a request was made to SWAP to consider the position. Lessons have been learned and Income and Awards and the Robert Owen Bank will process applications for ECO3.
· A Member in attendance, informed the Committee that the Powys Plumbing Group had evidence of fraud but were not able to share that information with the Council as it would identify their customers
· The Head of Service assured the Committee that lessons have been learned. A working group has been set up which includes officers from Finance, Legal and Procurement to ensure the process is more robust going forward. The timescales and volume of applications had been unexpected. All recommendations have been taken on board for ECO 3 – different guidance and criteria are also in place.
· Those clients who were unsuccessful at ECO 2 will have to reapply for ECO 3
Outcomes:
· All recommendations contained within the report will be applied prior to commencement of ECO 3
· The Economy, Residents, Community and Governance Scrutiny Committee will consider the SWAP report prior to scrutinizing proposals for ECO 3
· The Internal Audit Working Group would monitor the actions within the report
Supporting documents: