Client Finances and the role of the Office of the Public Guardian North West Audit Risk & Governance Group Safeguarding Workshop 17 June 2016 Simon Bleckly Warrington Borough Council

What am I going to cover? The Mental Capacity Act, Appointeeships and Court of Protection Client finances and Internal Audit – a Warrington history Background:The role of the OPG The process Findings and issues The OPG visit: What we did next Key issues and learning points

Background – MCA, Appointeeships and Court of Protection provides the legal framework for acting and making decisions on behalf of individuals who lack the mental capacity to make particular decisions for themselves “presumption of capacity”…it should be assumed that adults have the capacity to make decisions for themselves unless they lack capacity at the time of the decision any decision made on behalf of someone who lacks capacity should be made in their best interests balances an individual’s right to make decisions for themselves with the right to be protected if they lack capacity established Court of Protection, to safeguard the best interests of those who lack capacity to make decisions Mental Capacity Act 2005:

Background – MCA, Appointeeships and Court of Protection Deals with decision-making for adults who may lack capacity to make specific decisions, in relation to: Property and financial affairs Healthcare and personal welfare matters Decides whether a person has capacity to make a particular decision for themselves Makes decisions or orders on financial or welfare matters affecting people lacking capacity Appoints deputies to make decisions for people lacking capacity Removes deputies who fail to carry out their duties Court of Protection

Background – MCA, Appointeeships and Court of Protection Deputies are appointed to manage the property and affairs of people who lack capacity to make specific decisions, unless: Their only income is state benefits, in which case the DWP can appoint an appointee to manage the benefits They have previously made an Enduring or Lasting Power of Attorney to give someone authority to manage their property or affairs Court of Protection Registers deputies and people who have been given Enduring / Lasting Powers of Attorney Supervises deputies appointed by the Court of Protection, making sure they carry out their work in line with the Mental Capacity Act Looks into reports of abuse and takes action were there are concerns about an attorney or deputy Office of the Public Guardian:

The Warrington history – the noughties Two investigations into alleged misappropriation of clients’ monies Ombudsman complaint, leading to an investigation into the management of a Court of Protection client’s finances Internal audit review of the management of clients’ finances Issues: Staff were acting as trustees for clients Staff were accessing the savings and pensions of clients for which they were only an appointee Recommendations: Reassess clients and look to move more to Court of Protection Staff should be more involved in decisions over the capacity of clients to make financial decisions, and should risk assess to identify the most vulnerable clients Local authority staff should only act as appointee / deputy as a last resort, where no relative is able to take up this position.

The Warrington history – the 2010’s 2012 IA review of the management of clients’ finances in council establishments Identified issues with record keeping, management checks on accounts, lack of audit trail, poor controls over cash Recommended that the management of clients’ finances should be centralised 2013 IA review of Appointee and Receivership Team 60 Court of Protection and 175 Appointee clients – total balances c. £3m Limited opinion report Lack of written procedures to cover all areas of responsibility Separation of duties issues re bank account administration, transaction processing and reconciliation of client accounts Lack of supporting documentation for some transactions, including sale of property Queries from HMRC / OPG on clients’ accounts not followed up Delays in paying personal allowances to clients Significant number of nil balance accounts – and high balances on other accounts Discrepancy between the appointeeship account and the bank balance 2014 Appointee and Receivership Team moved under Finance to support implementation of online banking and prepaid cards and address the discrepancy in the appointeeship account. IA follow up of 2013 review Some progress on recommendations from previous report No progress on discrepancy on the appointeeship account – IA support requested to deal with this

The Warrington history – the 2010’s 2014 IA work on the appointeeship account discrepancy Reviewed process for transferring accounts from Sage to Softbox systems in 2012 Proved difficult to either reconcile the amounts transferred, or even the accounts transferred Lack of supporting documentation to evidence valid reasons for creation, amendment or closure of accounts on Sage Bank reconciliations for individual accounts never carried out – missing bank statements Lack of segregation of duties in account management, and password sharing in systems Concerns around audit trail for specific high value transactions Nov 2014 Financial Investigation Review Reviewed sample of CoP clients’ accounts for evidence of potential fraud Lack of readily available information on each client to enable a full understanding of their lifestyle, income and financial commitments Lack of supporting documentation for account transactions Lack of active management of accounts with higher balances, e.g. investing funds Lack of evidence that Personal Allowance levels are appropriate / evidence of unspent balances Poor level of detail in the annual account return to the Office of the Public Guardian Jan 2015 Decision taken to refer concerns to the Office of the Public Guardian Insufficient assurance around the integrity of client balances Informing the OPG of the actions being undertaken to improve controls and governance

The OPG investigation Referral passed to the Compliance Investigation Team February Full assurance visit proposed Asked for copies of IA reports Wanted early assurance that any financial loss identified to clients as part of our work would be compensated CIA appointed as main contact with OPG OPG appointed Court Visitors to visit a sample of clients – April / May 2015

The Court of Protection Visitor Provides independent advice to the Public Guardian and the Court of Protection Reports on cases with Deputyship Orders, Enduring / Lasting Powers of Attorney Can arrange to see or speak to anyone they need in order to obtain the information they require Will usually see the Deputy or Attorney, and often the client May also contact care homes, solicitors, accountants, social workers, family and friends Writes a report for the OPG / Court of Protection, including action points if relevant

What does the Visitor want to establish from the Deputy? What systems are in place to ensure clients’ needs are being met? Is existing expenditure appropriate for them? Are decisions being taken in their best interests? Are clients regularly visited – at least once a year? How does the Deputy engage with clients, carers, social workers and relatives when making best interest decisions? What systems are in place to ensure clients’ entitlement to benefits is regularly monitored? What control measures are in place to ensure that an audit trail is kept of money issued and spent as personal allowances?

What questions might the Visitor ask the Deputy? How are the client’s personal daily comforts / needs being met? Are the client’s wishes being met and are they involved in decision making? What financial arrangements are in place for the client? What benefits are being claimed? What are the client’s total assets? How is the client’s portfolio being managed? Has the sale of a property been agreed – if so, what are the plans for investing the proceeds of the sale? Are there any concerns regarding completing the annual report? What have been your experiences dealing with financial institutions?

Outcomes from the Warrington visit Appointee and Receivership Team see their role as administrative – do not feel they have the expertise to identify clients’ needs or make best interest decisions Too much reliance placed on social workers to make best interest decisions and to initiate contact with the Receivership Team Inadequate arrangements for reviewing expenditure, e.g. via personal allowances – lack of audit trail and proper control mechanisms Lack of evidence of visits to clients by Receivership TeamLack of investment strategy for maximising returns for clients

What happened next? We received the OPG report in October 2015 Full procedure notes compiled, including new procedures for dealing with deceased clients’ affairs Client bank accounts reconciled monthly Regular team meetings and liaison with social workers and Accountancy regarding recording expenditure and paying bills Access to Softbox restricted to ensure separation of duties Bankline used for making and reconciling payments Imbalance on the Appointee account frozen Pre-payment cards piloted Investigating options for investing high balances on client accounts The Action Plans from this report and the IA report have been used to deliver system improvements:

What happened next? Appointee and Receivership Team relocated to the Benefits and Exchequer section Corporate Deputy now the Operational Director, Adult Services Six monthly assurance report to the Corporate Deputy New Visiting Officer post created within Appointee and Receivership Team Property checks undertaken by the Empty Property Officer Property Maintenance undertaken by the Council’s building maintenance contractor, and arranged by Building Services Team Funerals undertaken by the burials team in Environmental Services Property sales managed by the Estates Team Structural changes were made to the way that the Council managed clients’ interests:

What are the OPG doing now? Accepted that several issues were “historic” and that improvements had been made Main concern that there is still a lack of assurance that client balances are correct and that we cannot give assurance that there has not been loss to individual clients Proposed a further assurance visit later in 2016 to assess the improvements in controls Giving the council more time to identify any potential loss to clients

Appointee / CoP is a significant financial system and should be resourced and managed accordingly The financial processes should not be managed in isolation from other “best interest” decisions Staff managing client finances must have clear and regular lines of communication with clients, carers, social workers and relatives where necessary There are specific skill sets, for example in relation to the disposal of property, that may be best identified in other council sections “Traditional” control issues, such as separation of duties, policies and procedures, management checks, are still critical The OPG is not just a resource of last resort Key learning points

Thank you for your time Questions?