£8m of coronavirus business grants in Cornwall could have been claimed incorrectly
Concerns have been raised by a fraud team
Concerns have been raised that more than £8million of coronavirus business grants in Cornwall could have been given to businesses incorrectly.
Cornwall Council distributed more than £270m in grants from the Government to help businesses which have been affected by the pandemic.
But councillors have been told that the fraud team at the council has been checking whether claims were legitimate and estimate that 3% could have been claimed in error.
A meeting of the audit committee heard that with around 24,000 businesses in Cornwall the council worked hard to get the grants out to help them.
Cornwall Council was held up by the Government as being one of the best authorities in the country for distributing the grants.
Jason Pengelly, from the council, told the committee that the grants were distributed on advice from the Government to “pay now, check later”.
The fraud team at County Hall then later worked with the National Fraud Initiative (NFI) to assess some of the applications to check whether they were legitimate.
Mr Pengelly said: “They pulled some work together there we could send off the grants we paid for checking.”
He explained that 541 cases were sent for checking: “Through this review we established six cases where grants were incorrectly claimed and recovery work has been started.”
However another 10 cases from the 541 are still under investigation after questions marks were raised about them.
Mr Pengelly said that the council’s risk and exposure to fraud was “quite minimal” and said that it was usual to expect a rate of between 2% and 7%.
And he stressed that it would not be accurate to state that the cases which had been highlighted had been fraudulently claimed and could have been claimed by accident.
He added: “The number is quite low in comparison to the number of claims paid out.”
However councillor Philip Desmonde said he was concerned about the issue, asking: “Is it right that 3% of grants allocated that might have a question mark over their legitimacy?”
Mr Pengelly said that was “potentially” the case and said that it would need further investigation to see if the claims matched the criteria.
He said one of the criteria was that businesses had to have an active bank account and had to be an active company.
He added: “I can’t honestly say we have 3%. We gave out 20,000 odd grants and we have checked a small proportion."
In a report which went to the audit committee it states that there had been a number of reports made by the public and other sources of alleged grant fraud. It states that as a result of this another four cases were found to have been incorrectly claimed and recovery action had been started.