Money management - Direct payments auditing
Under the Care Act direct payment holders have to spend their allocated money meeting care and support needs and in accordance with Council policies. This is subject to scrutiny- audit.
The Care Act promotes a lighter touch, proportionate approach to monitoring direct payments, which should help councils encourage and support more people to use them effectively.
What are the outcomes we want to achieve?
- Direct payment holders are encouraged to use their DP flexibly and in innovative ways to meet their needs and achieve the outcomes identified in their plan
- The Council has just enough information to satisfy itself that the direct payment is being used to achieve the outcomes identified in the support plan and remains an appropriate way to continue to meet eligible needs
- People have a thorough understanding of what they can spend their direct payment on and what is prohibited NB: The Care Act Guidance warns against listing prohibited spending. If a council chooses to do this, then the list needs to be based on the legal framework, and local legal advice might be needed
- People understand their responsibilities regarding the management of the direct payment or have nominated a person whose own credentials for management of the payment are satisfactory to the council
- People find the direct payment monitoring process manageable and not over-bureaucratic or intrusive NB: The regulations allow the council to permit a nominee to be paid to do the monitoring FOR the council.
What tools and resources do we need to do a good job? What are the steps we have to go through?
The direct payment holder
- Written direct payment information outlining the benefits and obligations of taking a direct payment available from first point of contact
- Detailed DP recipients toolkit including:
- Direct Payment Agreement
- Outline of all restrictions on usage
- Clarity on contingency fund and unforeseen expenditure
- How to access peer support
- Commissioned specialist direct payment support including advice and support for people to employ Personal Assistants
- Completed assessment, support plan and financial assessment
- Simple sign-off process
- Independent financial advice
- Agreed approach for dealing with individual contributions - default position should be to pay the direct payment net unless there is a sound legal reason not to
- A range of options of how to take a direct payment including:
- Prepaid card product including companion card option for carers
- Option for people to have their own bank account
- Third party managed direct payment account service i.e. payroll/payments
- Mixed package of direct payment and some directly commissioned arrangements
- Fast track process for making one-off payments without the need to open a bank account
- Light touch proportionate approach to monitoring direct payments focusing on whether needs are being met and not prescribing how they are met
What are the products we will have at the end of this process?
- Signed Direct Payment Agreement
- Agreed payment mechanism (prepaid card, that doesn't restrict choice, or individual bank account)
- Direct payment start date
When does this process start and end and within what timescales should this process be completed?
- Statutory First Review within six months (for new direct payments), annually thereafter
- Local authorities should only monitor direct payment holders in exceptional cases. This includes if they become aware people are having difficulties managing the payment or are spending it on things outside the agreement they have made with the Council through their care and support plan.
Who needs to be involved and what is their role? Who is taking the lead?
- The direct payment holder
- Family or carer
- Independent advocate or chosen representative
- DP support service, including specialist employment advice
- Care navigator
- Independent financial advice
- Financial assessment team
Too much time is spent on paper work and audit trails making it hard for people using direct payments to have flexibility in how they spend it to improve their health and wellbeing. This is because people are spending public money and the council needs to check how the money has been spent and on what. Checks are carried out by audit teams to make sure that receipts indicate the cash has been spent. Direct payment holders are made to manage this trail and only make purchases strictly in line with specified needs. Previously this was on appropriate goods or services, under the Care Act this will be on meeting care and support needs. If this is not the case the 'misspent cash' can be claimed back by the council and the direct payment agreement terminated, although this should only be used as a last resort.
Some of the causes of this problem are because:
- There is a Council culture of specifying services rather than needs
- Services, and needs are specified too inflexibly
- Services and needs are specified in relation to what the council has already purchased on block contract
Also, The Chartered Institute of Public Finance and Accounting (CIPFA) is overly cautious about specifying the need for audit trails. While council finance officers, can make up their own rules about what is acceptable, they quite reasonably follow the over burdensome advice from CIPFA because it is their professional body.
The Care Act suggests that many of the processes often associated with auditing a direct payment may not be necessary or helpful. A Care Act compliant approach should start by trusting and encouraging people to use their direct payment flexibly and innovatively to meet their intended outcomes and at the same time provide light touch monitoring which is proportionate to the risk. The challenge for Councils then is how to balance this approach with a need to account for the effective use of public money in an increasingly pressured financial environment.