Council accidentally overpaid a private health firm £450k

By Grainne Cuffe, Local Democracy Reporter

A town hall accidentally handed over more than £450,000 of taxpayers’ money to a private medical firm after a series of errors.

In one “clerical error”, the council tried to request over £120,000 back from the firm, but instead paid them the same amount again.

The details emerged in an audit report after a review of payments to Bupa Care Homes, which provides nursing and residential care to Southwark residents.

The council pays for placements for people who are eligible for help.

The audit was mainly focused on two of Bupa’s nursing homes, Collingwood and Havelock.

It followed Bupa contacting the council in May 2020, to highlight a “number of anomalies with payments made relating to nine clients”.

According to the report: “In particular, BUPA referenced two clients, in regards to whom, significant sums had been paid with a combined overpayment of £130,886.50.

“On August 27, 2020, the council processed a clawback of £123,333.48, after adjusting annual uplift underpayments.

“But instead of clawing back, they made a payment of further £123,333.48 due to a clerical error.

“After investigation, the process manager in the council’s financial control and processing team confirmed on September 9, 2020, that double the previous amount would have to be clawed back.”

The council then wrote to Bupa confirming the total amount paid in error was £387,440.12 and said it needed this amount refunding.

Further overpayments were then found – on September 30, last year the council told Bupa that the overpayment figure had gone up to £452,950.47.

The report states: “BUPA only agree to a partial refund of £344,736.47, as further discrepancies were identified in the evidence and calculation sent to them by the team manager placements.

“The council accepted the partial refund of £344,736.47 and is currently investigating the outstanding balance of £108,214, with ongoing assistance from internal audit.”

The review concludes that there are “significant gaps” related to processing payments.

Officers said: “We have concluded that there is a risk that several potential client accounts exist in the financial systems where overpayments have been made either due to the death of the client, or clerical errors including duplication and the amounts have not been clawed back.

“No controls are in place to monitor potential overpayments or ongoing regular payments as the professional finance services division is not checking the accuracy of information held in the payment software  Mosaic.

“Significant overpayments have been identified, of which some have been reclaimed, however there are further overpayments of £267,737.83 that need to be reclaimed identified within this review.”

Thomas Sharp, director of finance operations for Bupa, said: “We contacted Southwark council on multiple occasions to flag discrepancies in their payments, and have since worked proactively to help them identify the errors.

“As a result, we resolved the matter at the start of the year.”

Southwark council has not replied for a comment at the time of going to press.