The Learning and Skills Councils Annual Report and Accounts for ...

54. Internal Audit work had identified
critical weaknesses in the financial
framework under which payments
were made. In May 2009 Internal
Audit also looked at the reliability
of data and management
information received by the
Learner Support team and how
effectively this was being used to
inform LSC decision-making and
forecasting.
55. A follow-up review undertaken
in late 2009 indicated that the
recommendations made in the
first review, which had looked
at payments made for services
delivered, had largely been
implemented. In relation to the
recommendations arising from
the Ighodaro Report, all had
been implemented. In relation
to the data review, six of the
11 recommendations had been
implemented by the end of 2009.
56. Overall, Internal Audit concluded
that the general control
environment within the Learner
Support team had improved.
Factors behind this included
implementation of the audit
recommendations, use of systems
that were fit for purpose and
improved business relationships.
57. Further evidence to support these
improvements was provided by
the risk management process. EMA
was identified as a key risk with an
assigned risk owner. Risk templates
were updated each month with
risk mitigation action. The overall
assessment indicated an enhanced
control framework, with handover
of the risk to the YPLA assessed as
amber/green.
Internal Audit
Investigations Unit
58. Of the 16 fraud investigations
undertaken in the year, the
Internal Audit Investigations Unit
(IAIU) continued to investigate
two. A further six were suspended,
as they had been referred to the
police for action, and eight were
closed. The maximum amount
at risk for all investigations in
year was £7.1 million, although
at year‐end the figure for the
8 remaining investigations was
£5.2 million.
59. The number of allegations
considered by the IAIU and
successfully concluded as requiring
no further action increased by
98 per cent in the year to 89.
At year-end, 31 allegations were
carried forward for vetting, which
is the lowest level since 2006–07.
60. Cases currently being vetted and
recent investigations of note
include the following.
•
Following an allegation
concerning a training provider
and possible collusion with a
senior member of LSC staff, a
joint IAIU/HR investigation was
carried out. As a result of the
findings from the investigation,
a disciplinary hearing was
conducted in October 2009,
at which point the individual
was summarily dismissed. An
appeal hearing was conducted
in November 2009, although
the appeal was not upheld.
Subsequently, members of
the IAIU met with the South
Yorkshire Police Economic Crime
Unit, where the findings of the
investigation were presented
to it for consideration as to
whether any criminal offences
may have been committed.
• An allegation concerning an
FE college remains within
the IAIU’s vetting files. This
case attracted media interest
and the informant had also
contacted the police, the
National Audit Office, other
government departments and
ministers. The latest position,
after several meetings with
the college, its solicitors and
forensic accountants, was
the start of a piece of work
to reconcile the original
investigation evidence supplied
to the college’s forensic
accountants with the evidence
more recently supplied to
the LSC, in order that areas
of concern or areas where
additional investigation work
may be required could be
identified. Subsequently, there
was a need for an investigation
to be commissioned. The IAIU
ensured that the strategy and
scope of work to be undertaken
was sufficiently robust. The
IAIU also quality assured the
fieldwork, conclusions and
recommendations undertaken
by the appointed investigators,
as well as the resulting report.
61. During the year, the IAIU saw two
of its investigations come to court.
•
Following a longstanding
investigation by the IAIU and
a subsequent referral to the
police, who in turn referred
the case to the Serious Fraud
Office, five people appeared in
Birmingham Crown Court on
19 October 2009. On 4 June
2010, four people were given
jail sentences and a fifth was to
be sentenced at a later date.
Leadership and Governance
LSC Annual Report and Accounts 2009–10 39