City council underpaid dozens of its workers a total of around £70,000
A REVIEW of payment systems has found that Nottingham City Council underpaid around 40 of its staff.
As part of its internal auditing process, the Labour-run authority has been looking at its key financial systems including human resources (HR) and payroll.
In September last year the internal review of the council’s HR and payroll processes found there was “no assurance” these areas were meeting financial standards.
It highlighted a “poor system of internal control and consistent non-compliance with key controls”, which resulted in a financial impact to the council.
During an audit committee meeting on Friday, council officers said that, despite a lot of work being done on the initial review’s findings, they still determined there was “no assurance”.
It found that around 40 individuals were hit by an issue where their line manager had failed to progress their pay within the system.
At the end of their probation period their pay needed to be confirmed, but this was not moved forward on an IT system. This meant the individuals lost out on around £70,000 between them.
Councillor Andrew Rule questioned whether Nottingham could be facing a similar equal pay claim issue to Birmingham City Council.
In 2012, more than 100 Birmingham employees sued the council under the Equality Act 2010. It led to a payout of approximately £1.1bn in equal pay claim compensation, with a further £760m due to be paid out, adding to pressures which led to the authority’s “bankruptcy” notice.
Councillor Rule added: “Do you think we’ve mitigated against any risk of being challenged about equal pay, because I’m conscious equal pay is something that adversely impacted Birmingham Council and I am keen to ensure it is not replicated here?”
Councillors were told that the 40 staff members had now been paid. The internal audit also concluded there was still “no assurance” with appointeeships.
When a person on benefits needs residential care but is unable to manage their own finances, councils can become an “appointee” for that person. Benefits can build up if they aren’t spent, and once savings hit certain thresholds, benefits can be affected.
Appointees attempt to find relatives or executors of the person’s estate if they die. Their money is held in a ring-fenced account with any interest added to the balance. If no person can be found, any remaining balance can be passed to the Crown Estate – an independent business.
The appointeeship process was managed on the council’s behalf by Nottingham Revenues & Benefits, a standalone company, and the council raised concerns that a significant sum of money had built up in a single ringfenced account.
Nottingham Revenue & Benefits has since been brought back inhouse, which the council says ensures greater oversight over finances and processes.
The internal audit found the council was holding in excess of £1m in the account and an external agency was commissioned to try and track relatives down. About half of this money has been released so far.
The audit made recommendations, including that money should be placed in separate ringfenced accounts for each person. This work is being done by Lloyds Bank. Council officers said the work should be completed within three months.