By Joe Locker, Local Democracy Reporter
A review has found the company that managed money for some benefit claimants on behalf of Nottingham City Council had not been administering funds correctly.
An internal audit looked at the workings of Nottingham Revenues and Benefits, which has now ceased trading and is operated in-house by the council, after concerns were raised by colleagues.
The review concluded there was ‘no assurance’ over the management of benefits for claimants requiring residential care who are unable to look after their own finances.
When claimants have no friends or relatives to take responsibility for their benefits, the council can be authorised by the Department for Work and Pensions (DWP) to become an ‘appointee’.
This money does not belong to the council and each appointee should be given their own bank account within which all income and expenditure should be recorded.
During an Audit Committee meeting on September 29, Simon Parsons, audit manager for the council, said this “was not happening”.
“There wasn’t really great transparency,” he said.
“The issues there were the system that was being used to actually record or put into the system was not really fit [for purpose].”
An internal review of adult residential services, which was at the time run by Nottingham Revenue and Benefits, found funds had been grouped into a council account instead.
“We were very uncomfortable about the way in which the citizens’ funds were kind of swept into a council bank account, as opposed to having their own account,” Mr Parsons added.
However, he noted the audit had found no evidence to suggest any benefits had been misused.
During the meeting councillors were told benefits received by some individuals can build up if personal allowances are not spent on things such as care needs.
Once savings hit certain thresholds, their benefits can be affected by the amount in their savings.
The council says that, if the balance exceeds £23,250, individuals become responsible for the full cost of their own care and as the appointee the council administers this.
This means there is potential that some claimants may need their benefits reducing because they have got money in savings that the council is not aware of.
Another issue was raised over a significant amount of money that had built up in a ring-fenced account used to store funds belonging to claimants who have died.
If a person dies, the appointee will attempt to find relatives or executors of the person’s estate.
Whilst these attempts are made, left-over money is held in a ring-fenced account with any interest accrued added to the balance.
If all attempts fail and no next of kin can be found, the balance can be passed to the Crown Estate.
The council told the Local Democracy Reporting Service it had raised concerns with Nottingham Revenue and Benefits that a significant sum of money had built up.
A search agency was commissioned by the council to find relatives of claimants who had died, and this had “moderate success”, according to Lucy Lee, the director of customer service.
So far 186 people have been traced, and the agency is still working on 265 cases.
No next of kin has been found in a total of 16 cases so far, meaning money will be transferred to the Crown Estate.
There are 12 cases where claimants may have built up too much money in savings, and therefore may need benefits reducing.
The council says the move to bring Nottingham Revenue and Benefits in house is intended to ensure “better oversight of finances”.
A project is currently under way to ensure money is placed into separate, named accounts as recommended in the audit.