Assurance, Risk & Regulation

Countering fraud

Withdrawal of public subsidy and long-term bank finance and a double-dip recession present a harsh operating environment for housing associations, where every penny counts.

Fraud is an important issue and one which can have a severely adverse impact on the quality of housing provision. Government figures on fraud, translated to the housing sector, indicate that around £600m of expenditure could be lost each year – a sum sufficient to building in excess of 4,000 new homes.

The Homes and Communities Agency’s Governance Standard requires that “... Registered providers shall provide accurate and timely returns to the regulator, including an annual report on any losses from fraudulent activity...” This sits alongside the HCA’s requirement to publish clear and accessible policies, which outline a housing association’s approach to tackling tenancy fraud.

The Federation therefore commissioned PKF (UK) LLP, a leading firm of accountants and counter fraud experts to produce a practical guide on countering fraud. It is designed to help housing associations and their boards protect themselves against fraud, minimise its cost and lessen the extent to which resources are diverted away from front-line services. It provides practical advice on implementing a counter fraud framework, how to pre-empt and react to fraud, and avoid reputational damage.

It provides advice on best practice and to meet the latest, highest standards and is hoped this guide will help organisations achieve financial benefits and significantly reduced losses.

• Purchase a copy of Countering fraud: A guide for housing association board members
  
• Download the executive summary to find out more details about the guide (PDF, opens new window).

In addition, PKF and the Centre for Counter Fraud Studies at the University of Portsmouth have developed a freeSelf-Assessment Fraud Resilience (SAFR) tool. Users answer questions based on professional standards for counter–fraud work, about the extent to which their organisation is effectively protected against fraud. The site evaluates the answers given and rates the organisation out of a maximum 50 points which would indicate the cost of fraud to your organisation.

Bribery Act 2010

The Bribery Act 2010 will come into force on 1 July this year. This far reaching piece of legislation affects all housing associations.

In this article Tom Clark from Penningtons solicitors takes a detailed look at the implications of the act. Find out more information on the bribery act 2010.

Anti-money laundering

Remember your association may have an obligation to report fraud and anti-money laundering activity. The Federation’s guidance on anti-money laundering is free to Federation members.

Consumer Credit Licences

Housing assassociations often unwittingly engage in activities which have obligations under the Consumer Credit Act 2006. This Trowers and Hamlins LLP commissioned guidance on licensing for housing associations under the Consumer Credit Act 2006 will help members to interpret the Office of Fair Trading (OFT) guidance.

Delay to audited service charge statements for tenants

Previously we trailed proposed new regulation under the Housing and Regeneration Act 2008 that would have required housing associations to issue audited service charge statements to tenants with variable service charges. The change was due to take effect for accounting periods commencing on or after 6 April 2010.

With the very busy Parliamentary timetable in the run up to the General Election, there is no longer sufficient time for the Regulation to be laid before Parliament. The next possible date for the Regulation to be agreed and become enforceable is 6 October 2010. Should the Regulation be agreed by that date, it will mean that housing associations will need to implement procedures to ensure that tenants with variable service charges are in receipt of audited service charge statements for financial years commencing on or after that date. For most associations, this will affect service charge statements for the financial year commencing 1 April 2011. However, for a number of associations with December year ends, the change would affect the financial year commencing 1 January 2011. This change will create an additional cost for associations.

However, a smooth passage of the Regulation through Parliament for the 6 October cannot be guaranteed and could still be frustrated by the will of the new administration or the availability of Parliamentary time between the post-Election period up to the summer recess.

The National Housing Federation has published a fourth edition of its best practice guidance on service charges, Service Charges: a guide for housing associations. This guidance includes a significant section on audited service charge statements