Training and Enterprise Councils

HC Deb 08 March 2002 vol 381 cc630-3W

Paul Holmes

To ask the Secretary of State for Education and Skills if she will list the cases of(a) suspected fraud and (b) misuse of public funds notified to her Department involving training and enterprise councils, and in each case the sums involved, for each financial year up to 31 March 2001; which ones have been the subject of investigation by her Department; how many cases have been referred by her Department to the police; how many of the investigations (i) have been terminated, and for each of those cases the grounds on which that decision was taken, (ii) have resulted in a criminal prosecution and

	Number of Cases Notified	Number of Cases Investigated by DFES	Number of Cases Referred to the Police	Number of Cases Terminated	Number of Cases Still Ongoing
1994–95	3	3	1	1	—
1995–96	41	41	10	40	1
1996–97	24	24	9	24	—
1997–98	44	44	14	44	—
1998–99	35	35	10	35	—
1999–2000	20	20	9	18	2
2000–01	15	15	2	9	6
Total	182	182	55	173	9

The reasons for terminating cases are shown in the following table:

Reason For Closure
	Number of Cases Terminated	Criminal Prosecution	Malpractise	No Evidence to Substantiate	Poor Administrator
1994–95	3	1	—	2	—
1995–96	40		13	19	8
1996–97	24	1	11	4	8
1997–98	44	1	25	8	10
1998–99	35	—	22	2	11
1999–2000	18	1	12	1	4
2000–01	9	—	4	5	—
Total	173	4	87	41	41

In total, the amount involved and identified as recoverable was £18,167,000. The amounts identified as recoverable from TECs were notified to GOs in order to initiate recovery action. Details of actual recoveries are not held centrally.

The Department's financial control mechanisms applied to TECs developed and improved, drawing on the experience gained from managing the contracts with TECs and lessons learned from investigating cases of fraud and misuse of public funds. Key elements of the controls were: (a) A detailed legal contract for the provision of the public funds, legally binding. The contract and supporting material reflected input from specialist professional financial control staff, spelling out the specifics of what was being paid for, evidence requirements and other specific conditions on the provider. It was a requirement on TECs to notify the Secretary of State immediately if it had reason to suspect that a fraud had or was occurring; (b) Legal contractual remedies that could be followed quickly if any of the contractual conditions were not met;

(iii) continue, and what sums have been recovered as a result; what controls were put in place for training and enterprise councils to minimise the possibility of fraud and misuse of public funds; what lessons her Department drew from the cases; and how these were applied in relation to individual learning accounts. [33785]

John Healey

Training and Enterprise Councils (TECs) were required to notify Government Offices (GOs) of instances of suspected fraud or financial irregularity in accordance with their contracts with the Department. Details of cases notified to the Department are as follows:

(c) Visits from Government Office Financial Assurance and Management Teams to TECs and providers to ensure that public sector standards of regularity and propriety were maintained and that public funds were properly spent, well managed and safeguarded; (d) A specialist national Financial Assurance Unit consisting of a mix of professional field audit, accounting and software database staff working with Government Office financial control field teams, performing regular contract audit monitoring visits to the 72–75 TECs and their 5,000+ providers and supporting NAO visits as required; (e) A Special Investigations Unit (SIU) based in the Department with a national remit to investigate serious cases of fraud; and (f) Quarterly reports to the Departmental Audit Committee on emerging or serious issues so that timely decisions could be taken on financial control risk management and on early preventative action.

The Department drew a range of lessons from the TEC experiences applicable in relation to Individual Learning Accounts (ILAs) and other Departmental business, including for example: retaining expertise in the DIES Special Investigations Unit. The SIU was involved in investigations of alleged ILA fraud and abuse at the earliest opportunity working closely with ILA policy team. They are currently involved in investigations into the activities of 97 ILA learning providers.