Annual Report 2018/19

2018/19

FORE
INTRODUCTI

OVERVIEW

INFORMA
FINAN

NEWBUSINE

2 VERITAUGROUPANNUALREPORT2018/19

REWORDBYIANFLOYD CONTENTS
TIONBYMAXTHOMAS
4
ABOUTVERITAU 5
OURPEOPLE 6
7
EWANDGOVERNANCE 8
KEYACHIEVEMENTS 9
DATAANALYTICS 10
RISKMANAGEMENT 11
COUNTERFRAUD 12
INTERNALAUDIT 13
14
MATIONGOVERNANCE 15
ANCIALMANAGEMENT 15
NESSOPPORTUNITIES 16

FUTUREPLANS 3

9

FOREWORD

IANFLOYD

CHAIR

With local government still
facing key challenges,strong
leadershipandgovernanceare
vitalforthe continuation of
goodpublicservices.

High-profilecasesinpreviousyearssuchasthefinancialproblemsatNorthamptonshireCounty
Council,thecollapseofCarillionandthe‘WannaCry’ransomwareattackontheNHShighlightthe
needforgoodcorporategovernance.TheVeritaugrouphasseenanothersuccessfulyearin2018/19,
continuingtomeettheneedsofclientswhileremainingcosteffective.Clientsatisfactionremains
highandwearealwaysstrivingtoinnovate.
WhenVeritauwasestablishedtenyearsago,sharedservicepartnershipswererelativelyuncommon,
butthismodelhasbeenreallybeneficialforallpartiesandmanycouncilsaroundthecountryare
now creatingsimilarcommercialentities.Thiskeepscostsdownforlocalauthoritiesagainstthe
backdropofincreasinglytightbudgets,whilehelpingtodeliverthebestpossibleservices.
WiththeintroductionoftheDataProtectionOfficer(DPO)servicelastyear,wehavesignificantly
grownourclientbaseandmanymoreschoolsandotherpublicbodiesarenowreceivingourservices.
Iwasreallypleasedwhenourinformationgovernanceteam wasnominatedfortheTeam oftheYear
awardbytheInformationandRecordsManagementSociety(IRMS).
Wealsodevelopedourriskmanagementservicefurther,whichwaslaunchedin2017/18.Severalnew
clientssignedupforthisserviceandnow participateinriskworkshopsorreceiveongoingsupport
from theteam.Wehopetoexpandtheservicefurtherinthecomingyear.
Veritauhasbeenabletocontinuetoinvestinstaffmemberswhilekeepingfeeslow forclients.
TakingonadditionalexternalworkhasallowedustocontinuethrivingandIam pleasedtoreportthe
group made a profitthisyear.However,2019/20 islikelyto be anotherchallengingyear.The
continuingdemandforservicessuchasadultsocialcareanddiminishingbudgetsmeanthateffective
governance,riskmanagementandauditassuranceremainvital.

4 VERITAUGROUPANNUALREPORT2018/19

INTRODUCTION

MAXTHOMAS

CHIEFEXECUTIVE

Welcome to Veritau’s latest
annualreport,whichprovidesan
overview of the group’s
performance during2018/19as
wellasdetailingsomeofourkey
achievementsduringtheyear.

Veritauturnedtenyearsoldthisyear;theperfecttimetoreflectonourjourney.Wewereestablished
in2009tobringtogethertheauditandcounterfraudservicesatCityofYorkCouncilandNorth
YorkshireCountyandexpandedin2012whenanumberofnew membercouncilsjoinedus.From
humblebeginnings,wearenowrecognisedasaleadingproviderofassuranceservices.
Iam proudofwhatwehaveachievedinthelasttenyears.Wenowemploynearly60membersofstaff
andprovideservicestoover500publicsectorclients.Publicsectorservicedeliveryhasneverbeen
morechallenging.Thecombinationofincreasingdemand,reducedresources,technologicalchange
andtheongoingredesignofservicesmeantheneedforeffectivegovernancehasneverbeengreater.
Ouraim istoprovidearangeofserviceswhicharecosteffective,highperformingandwellregarded.
TheexpansionoftheDPOserviceandgrowingworkloadforfraudinvestigationhasseenuswelcome
new traineestothecompanythisyear.Wehavealsopromotedseveralcolleaguestoseniorlevels
withinthecompany,andcreatedanAspiringManagerProgrammeintheauditteam.Thishasallowed
one ofourSeniorAuditorsto progresstoAssistantAuditManager.We intend to replicate the
programmeintheotherteamsnextyeartoprovidemoreopportunitiesforourstaff.
Trainingandprofessionaldevelopmentisakeybusinessprioritysowewerereallypleasedtoretain
ourInvestorsinPeopleaccreditationduringtheyear.Otherkeyachievementsincluderecoveringover
£612,000inmoneylosttofraudforourmembercouncils.Iam alsoproudtosaywewerenominated
fortheInstituteofRevenues,RatingandValuation(IRRV)annualawardsforthethirdyearrunningin
thecategoryofExcellenceinCounterFraud,andinasecondcategoryforExcellenceinInnovation.
Wehavealsocontinuedtodevelopnew andimprovedservicesforourclients,includinginnovative
approachesindataanalyticsandITaudit.
OurfutureplansincludetheexpansionoftheVeritaugroupwithnewmembercouncilsjoiningusand
acontinuedemphasisondeliveringhighqualitybutaffordableservicesforourexistingclients.

95

ABOUTVERITAU

VeritauLimitedwasestablishedin2009tobringtogethertheinternalauditandcounterfraud
servicesatCityofYorkCouncilandNorthYorkshireCountyCouncil.Weexpandedin2012whenfour
districtcouncilsjoinedustocreateVeritauNorthYorkshire:SelbyDistrictCouncil,RyedaleDistrict
Council,RichmondshireDistrictCouncilandHambletonDistrictCouncil.Thegroupcontinuesto
operateasasingleentity.
Wequicklybuiltareputationforprovidinghighqualityandcosteffectiveservicestolocalauthorities
andotherpublicsectororganisationsacrosstheregion.Ourapproachisdesignedtocombinethebest
ofprivatesectorflexibilityandinnovationwithpublicsectorcommitment.Weprovideserviceswhich
aretailoredtomeetthespecificneedsofourclientsandgenuinelyaddvalue.Ourclientsinclude
localauthorities,nationalparkauthorities,towncouncils,housingassociations,maintainedand
academyschools.
Despitethechallengingeconomicclimatethegrouphascontinuedtogrowitspublicsectorwork.The
serviceofferinghasalsobeenexpandedwithnewinformationgovernance,riskmanagementanddata
analyticsservices.Asignificantnumberofnewclients,particularlyschoolsarenowreceivingservices
from Veritau.Ourmissionstatementis:

Todeliverefficient,effectiveand
professionalassuranceservices
whichareresponsivetotheneeds
ofourcustomersandwhichare
heldinhighesteem.

6 VERITAUGROUPANNUALREPORT2018/19

OURPEOPLE RichardistheDeputy
ChiefExecutiveand
MaxistheChief hasconsiderable
ExecutiveofVeritauand experienceof
hasover25yearsofaudit undertakingand
experiencegainedwithin managinginternalaudit
theprivateandlocal andcounterfraudwork
governmentsectors, inthepublicsector.
providingservicestoa
rangeofclients.

97

OVERVIEW

Despitethechallengingeconomicclimatethegrouphascontinuedtogrowitspublicsectorwork.
The service offering has also been expanded with new information governance and risk
managementservices.Asignificantnumberofnewclients,particularlyschools,arenowreceiving
servicesfrom Veritau.
The group made a profitin 2018/19 compared to a smalllossin the previousyear.This
improvementwasprincipallyasaresultofthenewDataProtectionOfficerservice.Beforepension
adjustments,operatingprofitswereasfollows:

VeritauLimited:£49.5k
VeritauNorthYorkshire:£25.5k
Grouptotal:£75k

GOVERNANCE

BoththeVeritauLimitedandVeritauNorthYorkshireboardsofdirectorsmet Receivingapositiv
threetimesduringtheyear. externalassessmen
TherewerenochangesinthecompositionoftheVeritauLimitedboard.Anton ourinternalauditwo
HodgereplacedPeterJohnsonasadirectorofVeritauNorthYorkshireinMay practicesbytheSou
2018. WestAuditPartners

8 VERITAUGROUPANNUALREPORT2018/19

KEY
ACHIEVEMENTS

Thegroupexceededthemajorityofthetargetssetbyits
membercouncils.
Otherservicedevelopmentsandachievementsduringthe
yearhaveincluded...

Creatinganew, Beingshortlistedfor Agreeinganewten Achievingcashable
modernwebsite nationalawardsfrom the yearcontractwith savingsof£612,453
IRRVandIRMS CityofYorkCouncil forcounterfraudwork

Submittingasuccessful Establishingan Developingand RetainingourInvestors
bidtoparticipateinthe alternativepension launchinganew inPeopleaccreditation
CabinetOfficeNFINNDR schemetooffergreater GDPRe-learning
courseforschools (thegrouphasbeen
datamatchingpilot employeechoice accreditedsince2011)

tive Developingand Procuringandselecting Implementinganew Expandingouruseof
ntof launchinganaspiring CASWorkProasour financialsystem, socialmediaand
orking managerprogramme newinformation Xero
outh governancecase doublingthecirculation
rship tosupportcareer managementsystem listforthemonthly
progression alertsnewsletter

99

DATAANALYTICS

AnumberofyearsagoVeritauinvestedin
IDEA;apowerfuldataanalysistoolusedto
supportinternalauditand counterfraud
work.Wealsoestablishedaworkinggroup
ofauditorsandinvestigatorstopromoteand
developtheuseofIDEA.
Duringtheyear,weusedIDEAsuccessfullyin
avarietyofauditsandtosupportongoing
fraudinvestigationwork.Inaudit,weused
IDEA to support majorfinancialsystems
audits, such as payroll, creditors and
debtors.We also conducted investigative
workintotheuseofakey-loggingsystem as
partofaninformationsecurityauditandthe
use offuelpaymentcardsaspartofa
vehiclesandequipmentaudit.
IDEAenablesustoreview entiredatasets,
removingtheneedforsampletesting,and
tocarryoutanalysisthatismorecomplex.
Thisin turn allowsusto provide greater
assurance to our clients about their
management of risk and operation of
controls.
Thisyearwehavealsoseenanincreaseduse
of IDEA to support fraud investigations
involvinglargedatasets.Inadditiontothis
thegrouphaveprocesseddatasetsforthe
NationalFraud Initiative (NFI),ofvarying
complexity.ScriptsweredevelopedforthemostdifficultdatacleansingexercisessuchasCouncilTax
Reductiondataacrossoursixcouncilclients,tospeedupprocessinginthefuture.Thegrouphasalso
preparedandcleanseddatafortheNFINationalNon-DomesticRatepilot,andsuppliedthecompletion
oftheDataProtectionImpactAssessmentandInformationSharingAgreementfortheproject.
WhentheNFIresultsweregenerated,IDEAwasalsousedtoimprovethequalityofthereports,for
example creditors’data where analysishelped identify the sample to be selected formanual
verification.WewerealsoabletocloseoneNFIreportinvolving2,000+matcheswheretheuseofIDEA
helpedustoverifythatallofthem werefalsepositives,savingalargeamountofmanualwork.
Anumberofprojectshavebeenplannedandpreparedfornextyear,matchingdatasetsacrossanumber
oflocalauthoritiestoidentifypossiblefraudanderrorinareassuchasadultsocialcare.

10 VERITAUGROUPANNUALREPORT2018/19

RISKMANAGEMENT

RiskmanagementremainsakeyareaofdevelopmentwithinVeritau,andthisyearwehavecontinued
toundertakeexcitingnewwork.Lastyearfourmembersoftheauditteam completedtheInstituteof
Risk Management’s(IRM)InternationalCertificate in Enterprise Risk Managementand became
recognisedprofessionalsinthefield.Theteam developedaworkshopformatwhichhasbeenwell
receivedbyclients.Thisnewapproachisnowanimportanttoolforhelpingtosupportourclients.
ThisyearwehavecontinuedtodeliverariskmanagementservicetoSelbyDistrictCouncilandhave
supportedanumberofotherclients,aswellascompletingaseriesofcorporateriskworkshops.Akey
area ofwork thisyearhasbeen developing the service delivered to Ryedale DistrictCouncil;
facilitatinganumberofserviceriskworkshops,assistingthem withthedevelopmentoftheirrisk
managementframework,andproducingriskmanagementguidance.Theteam utilisedthePentana
PerformanceSystem,buildingonexpertisegainedthroughourworkwithSelbyDistrictCouncil.
Theteam alsocompletedriskworkshopswithVeritaumanagersandindividualteamstohelpidentify
therisksfacingthebusinessandtodevelopactionplanstomitigatethoserisks.Theinformation
gatheredfrom theworkshopsenabledtheteam todevelopserviceriskregistersalongsideacorporate
riskregister.
Veritau’sriskmanagementteam wasaskedtoundertakeanumberofriskworkshopswithstaffatCity
ofYorkCouncilworkingontheYorkCentralInfrastructureProject.Theyhavealsocontinuedtosupport
HambletonDistrictCouncilandcompletedariskworkshopwiththeHopeAcademyTrustinYork.In
June2018,theriskmanagementteam weredelightedtofeatureontheIRM’swebsiteandblog.

9 11

COUNTERFRAUD

Veritau’scounterfraud team hasundertaken some
excitingnew initiativesthisyear.InApril2018,we
were successfulin applyingforthe NationalFraud
Initiative’sbusinessratesdatamatchingpilot.Thiswas
abrandnewexerciseorganisedbytheCabinetOffice.
Theaim ofthepilotwastoenableourcouncilsto
detectandpreventfraudulentandincorrectclaimsfor
discountsand exemptionson NationalNon-Domestic
Rate accounts.Thisapproach allowed ourcouncil
clientstorecoveranyunderpaymentsdueandlimit
future financiallosses,aswellasreinforcingtheir
commitmenttosafeguardpublicfunds.Weworkedin
partnershipwithseveralofourmembercouncils,plus
otherauthoritiesin the area.Over29,000 matches
wereinitiallyproduced.Investigatorsworkedthrough
the matches, alongside staff members from the
businessratesteamsateachofthecouncils.

Veritaualsoundertookaproactivelocaldatamatching
initiative,ledbyoneofourcounciltaxspecialists.This
involved matchingcrossboundarycounciltaxdata,
between a numberofclientcouncils,aswellas
internalmatcheswithineachcouncilbetweenbenefits
andcounciltaxdatasets.Wealsomatchedcounciltax
datatodirectdebitmandates.

Thesematcheswereconductedtoidentifyfraudssuch
asthosewhereapersonisclaimingmultiplesingle
occupancydiscountsfrom differentlocalauthorities,
claimingadiscountorexemptionforapropertythat
theydonotliveat,orwheretheyarenottheonly
adultoccupant.The exercise resulted in 15 fraud
investigationsbeingcommenced.Wearenowplanning
anotherroundofdatamatchingexercisesforthisyear.

Casestudy:CouncilTaxProsecution

Onecaseidentifiedfrom thelocaldatamatchingexerciseresultedinthefirstprosecutionofitskindfor
ourclientcouncil.AresidentinRichmondadmittedthatshehadclaimedcounciltaxsingleperson
discountatherpropertyforsixyearsinherdaughter’sname.Thefraudwasdiscoveredthroughamatch
thatshowedadifferentnamewasonthedirectdebitmandatetopaythecounciltax.Theindividual
wasinterviewedundercautionandadmittedfraud,statingthatsheforgedherdaughter’ssignatureon
theform andclaimedthatherdaughterlivedtherealone,inordertoreceivethe25%discount.The
fraudamountedto£2,178.TheMagistrates’Courtorderedhertorepaythediscount,andleviedafine
andcoststotalling£697.

12 VERITAUGROUPANNUALREPORT2018/19

INTERNALAUDIT

Casestudy:VehiclesandEquipmentAudit

Aspartofaninformationsecurityauditataclientcouncil,wecarried
outtestingtoidentifyhow,whenandbywhom electronickeyswere
used to access individual department’s storage lockers.A full,
chronologicalsystem historyofalloccasionswheretheelectronickey
safewasopenorkeysreturnedandremovedwasdownloadedfrom safes
acrosstheclientcouncil.IDEAwasusedtoanalysethousandsofthese
entriesandtoidentifyindividualkeyandsafeaccesshistoriesforkeys
andindividuals.
From thisanalysis,wefoundmultipleinstanceswherekeyshadbeen
inappropriatelyremovedbyamemberofstaffaswellasmultiplecases
ofkeysbeingusedoutsideofstandardworkinghours.UsingIDEAduring
thisauditenabledustoevaluatecompliancewiththeclientcouncil’s
informationsecuritypoliciesandhighlightissueswiththeelectronickey
safe’saccesscontrols.

Casestudy:InformationSecurityAudit

Testingwascarriedoutonalargenumberoffuelpaymentcardsusedby
aclient’sstafftopurchasefuelduringworktravel.Invoicesforeachfuel
card from the preceding year were provided recording allfuel
transactions alongside a list of registered fuelcards with their
correspondingvehicle.UsingIDEA,itwaspossibletoextractrelevant
data directly from the invoicesand compile thisinto a complete
database forfurtheranalysis.Each invoice wascompared to card
registrationinformationlinkedtospecificvehicles.
Whilstmostpurchaseswere appropriate nearly20% oftransactions
required furtherinvestigation and a numberofdiscrepancieswere
identified.Theseincludedfuelpurchasesforunauthorisedvehicles.We
alsoidentifiedtwofuelcardsincirculationthatwerenotrecordedin
theclient’srecordsasbeingregistered,andasmallnumberofdata
qualityerrorswherenovehicleregistrationnumberwasrecordedwhen
fuelwaspurchased.Dataanalyticsenabledtheauditortofullyassess
theweaknessesinthemonitoringofvehicleandequipmentusagethat
wouldotherwisehavebeenprohibitivelytime-consumingtodo.

9 13

INFORMATIONGOVERNANCE

SupportingourclientswiththerequirementsofthenewDataProtectionActandGDPRhascontinued
tobethemajorfocusoftheinformationgovernanceteam.TheDataProtectionOfficerservicehas
continuedtogrow,nowservingalmost500schools,andattractingnewclientsfrom othersectorstoo.
Theteam hasalsogrown,continuingitstrainingandlearningstrategywithtennew professional
qualificationsawardedduringtheyear.
Over200schoolstookadvantageofVeritau’sdataprotectionself-assessmentquestionnaire.The
results-whichshowedmostofthoseschoolshadalreadyachievedagoodstandardofcompliance-
helpedschoolstorefinetheircomplianceactionplansbyidentifyingandprioritisingissues.This
year’sschoolvisitsareunderway,ensuringthateveryclientcancompletetheiractionplans.Anew
auditapproachwillbeadoptednextyeartotakeaccountofthisyear’sresults,revisedguidancefrom
theInformationCommissioner,andareassessmentofrisksandpriorities.
The information governance team hasalsocontinued toprovide trainingfornew and existing
councillors,seniormanagersandserviceteamsatallourclientcouncils.Trainingisakeyelementof
theservice,withane-learningmoduleandaclassroom-stylesessiononrecordsmanagementnow
available,andfurthersessionsonfreedom ofinformation,dataprotectionimpactassessmentsand
subjectaccessrequestscomingup.Theteam isalsoimplementingitsnewcasemanagementsystem,
whichwillimprovehowweworkandtheserviceweprovideforourclients,especiallythosereceiving
supportwithaccesstoinformationenquiriesanddataprotectionimpactassessments.

14 VERITAUGROUPANNUALREPORT2018/19

FINANCIALMANAGEMENT

VERITAU VERITAU GROUP
LIMITED NORTHYORKSHIRE TOTAL
2018/19 £49.5k
OPERATINGPROFIT* £1,662k £25.5k £75k
TURNOVER £427k
NETASSETS £440k £2.1m

£236k £663k

*beforepensionadjustmentsandtax.

NEWBUSINESS
OPPORTUNITIES

Thegroupprovidedinternalauditandconsultancyservicestoanumberofnew clientsintheyear,
includingLancashireCountyCouncilandEastRidingofYorkshireCouncil.
WewonthetendertosupplyinternalauditservicestothePeakDistrictNationalParkAuthorityfora
furtherthreeyears.Inaddition,NorthYorkshireFireandRescueServiceandDoncasterChildren’s
ServicesTrustextendedtheircontractsforinternalauditservices.

9 15

FUTUREPLANS

ExpandtheVeritau Hiremoregraduate CreatenewGDPR
groupwithnew traineesacrossall advisoryservicefor
membercouncils schoolswithin-house
disciplines
DPOs

Continuetodevelop Expandaspiring Coordinatea
marketingand managerprogrammeto brandrefresh
communications
otherteams

www.veritau.co.uk
16