Capita fail to action fraud report recommendation

Capita have failed to action a key recommendation from the Grant Thornton report into a ¬£2m fraud committed by a former Capita employee, according to a report discussed at Barnet Council’s Audit Committee (31 January).
Recommendation 15 seeks to ensure the Council’s payment system (BACS) is¬†reviewed for the adequacy of controls over new suppliers where there is no purchase order, to make sure the Council is paying the correct bank accounts. This is a “High immediate” priority, as misuse of the BACS process and a lack of checking basic details such as bank accounts was a key reason the fraud was allowed to happen.
Grant Thornton, Barnet Council, and Capita all agreed to the action, but one Capita employee at a remote location disagreed and decided not to implement it. The news was met with disbelief from both Labour and Conservative Councillors.
Labour Audit spokesperson, Cllr Alison Moore said:
“There must be an investigation into how this was allowed to happen. We are 6 months on from the publication of the report, and our last update said this action had been submitted and verified for testing. It is completely unacceptable.”
Fellow Audit Committee member, Cllr Kathy Levine added:
“This is further evidence of how inept Capita are, and how they do not have proper processes in place: one local officer can override the instructions of the Council’s Director of Finance, the Council’s internal audit function, Grant Thornton, and even the Capita partnership managers. A Conservative Councillor called this the tail wagging the dog and they are very right.”
1. A copy of the update on the Grant Thornton recommendations can be found here (Agenda Item 7):