Foreword
The Division for Work and Pensions (the Division) is answerable for the administration of shopper funds regarding each the 2012 statutory youngster upkeep scheme operated by the Little one Upkeep Service ( CMS ) and 1993 and 2003 schemes which have been initially delivered by the Little one Help Company ( CSA ), collectively referred to as the Little one Upkeep Group ( CMG ).
The Division offers a Little one Upkeep system that helps separated dad and mom to work collectively to arrange family-based youngster upkeep preparations. The place this isn’t attainable, it offers entry to an efficient and environment friendly service to make sure separated dad and mom contribute in direction of the maintenance of their youngsters.
CMG has accountability for the administration of shopper funds collected by the statutory service. Little one upkeep assessed underneath the CMS 2012 scheme and CSA arrears solely circumstances are managed on the CMS laptop system launched in 2012. Though the CSA is now closed and its methods decommissioned, circumstances are administered in line with the scheme guidelines underneath which the case was initially assessed.
The operating prices of CMG are charged to the Division and reported within the Division’s Annual Report and Accounts[footnote 1]. Nonetheless, for Consumer Funds, CMG acts purely as custodian and the Division is required, by HM Treasury underneath part 7(1) and (2) of the Authorities Sources and Accounts Act 2000, to publish a Consumer Funds Account, which is separate from the accounts for the remainder of the Division’s actions.
This account stories on the 2012 statutory scheme, with the 1993 and 2003 statutory schemes being reported in a separate publication. The Comptroller and Auditor Normal offers separate opinions within the audit certificates inside every publication.
Since 2016/17, the accuracy with which DWP caseworkers have assessed youngster upkeep has been at a degree the place an unmodified opinion has been issued on the regularity of receipts and funds for the 2012 youngster upkeep scheme. The opinion on whether or not the accounts correctly current receipts, funds, balances, and arrears have been correctly ready can be unqualified.
1. Background
Each dad and mom are answerable for the prices of elevating their youngsters, even when they don’t see them. The Division offers instruments and help for folks to arrange an association that works for them and so they might make their very own non-public family-based association ( FBA ) with little, or no authorities assist. A baby upkeep calculator is on the market on-line to estimate what is perhaps an inexpensive quantity to pay. An FBA doesn’t essentially must contain the trade of cash and might embody issues reminiscent of sharing care or overlaying sure prices like college uniforms – no matter works for the person household circumstances.
The Division additionally recognises that not all dad and mom are in a position to come to such collaborative preparations and might have further assist. The CMS offers the statutory youngster upkeep scheme the place dad and mom are unable to work collectively or the place the absent dad or mum is not going to meet their accountability to pay upkeep for his or her youngsters voluntarily.
The Division can be implementing (in England) a Programme to cut back parental battle, integrating evidence-based interventions into native companies to help deprived and workless households by the Decreasing Parental Battle Programme[footnote 2]. While not a part of the CMG portfolio, the outcomes from the programme will assist help CMG ’s goals.
Earlier than making use of to the statutory youngster upkeep scheme, separated dad and mom are required to entry ‘Get Assist Arranging Little one Upkeep’ ( GHACM ) by GOV.UK. GHACM , ensures dad and mom are given neutral info on the completely different upkeep choices accessible and help to assist them put an association in place. There’s a telephony service to help these dad and mom unable to make use of on-line companies.
Throughout the statutory scheme, the CMS function two service varieties: Direct Pay and Acquire and Pay.
For the Direct Pay service, the CMS calculates the quantity of kid upkeep {that a} PP should pay, and the case is managed on the CMS system, however dad and mom should agree between themselves how the cash shall be paid: the CMS offers the calculation, and no additional use of the service is required. CMS evaluate the upkeep calculation yearly to make sure the quantity of upkeep assessed is right. Direct Pay may be chosen by both dad or mum with the opposite’s settlement.
For the Acquire and Pay service, the CMS calculates the quantity of kid upkeep, then collects the fee from the PP and pays it to the RP . Shoppers should pay charges for utilizing the Acquire and Pay Service. The PP should pay 20% on prime of the upkeep quantity due, while the RP has 4% deducted of the upkeep quantity. Acquire and Pay is utilized in circumstances the place the PP has didn’t pay upkeep or has indicated that they’re unwilling to pay.
Receipts and Funds reported in these accounts relate solely to Acquire and Pay circumstances. Direct Pay Instances are usually not included as CMG isn’t concerned as dad and mom prepare funds themselves.
Little one upkeep has undergone main reform within the final decade with the creation of the CMS and the closure of the CSA . This has ended the ‘default’ nature of the outdated service, with collaboration between separated dad and mom on the centre of the reforms, enabling supply of an efficient, environment friendly statutory scheme.
Unpaid upkeep for circumstances on the 1993 and 2003 schemes is now all housed on the 2012 laptop system permitting the CMS to focus efforts on supporting these dad and mom most in want and accumulating cash that can profit at present’s youngsters. Beneath the CMS , the Division has stronger assortment and enforcement powers – for instance, it might probably apply to the courts to disqualify non-compliant dad and mom from holding a UK passport. This has resulted within the assortment of arrears the place different enforcement actions have been exhausted and demonstrates that the CMS will take a powerful stance in opposition to persistent non-compliance.
In March 2022 NAO revealed their report on Little one Upkeep ( HC 1139 Session 2021-22)[footnote 3]. They discovered that DWP had improved worth for cash in its administration of the service and had considerably improved its accuracy and assortment charges. Additionally they famous a number of areas with potential for additional enchancment, together with tackling inappropriate boundaries that prevented households utilizing the service, enhancing the effectiveness of preparations, and reviewing its write- off technique for Acquire and Pay unpaid youngster upkeep arrears.
1.1. Transformation
With the completion of the Compliance and Arrears Programme, CMG has shifted its focus to have a look at the way it can ship companies with growing effectiveness and effectivity. The Transformation programme started due to the shift in service providing through the pandemic, with a view to optimise the usage of digital channels and self-service by our shoppers.
It’s now in 12 months two of a three-year programme of change to discover new and extra progressive methods of delivering even higher service to our prospects; delivering a extra fashionable, caring service, putting youngsters on the coronary heart of what we do.
Like many public sector organisations, the Division is targeted on working extra effectively whereas lowering prices to the taxpayer. The pandemic has accelerated digital adoption by society at giant and so the Division has a possibility to extend the alternatives for patrons to make contact by digital routes while effort continues to be made for help to be offered to assist susceptible and non-digital prospects by the channel of their alternative.
Adjustments made to on-line companies together with ‘My Little one Upkeep Case’ and ‘Apply On-line’ improve the performance accessible to our prospects to allow them to handle their youngster upkeep preparations, reporting modifications, receiving updates on progress, and making card funds, in a approach that’s extra handy and at a time that fits.
1.2. Service Modernisation and Enchancment
The strategic coverage workforce are endeavor a evaluate of kid upkeep provision to discover how the Division can greatest present a statutory youngster upkeep scheme and have sought views on proposed legislative modifications geared toward modernising and enhancing the Little one Upkeep Service.[footnote 4]
2. Efficiency throughout 2021/22
2.1. Caseload
The CMS caseload at 31 March 2022 together with each the Acquire and Pay and the Direct Pay companies was 588,700 (31 March 2021, 548,000). This was a rise of seven% since 31 March 2021 and consists of circumstances that closed on the outdated CSA schemes the place these dad and mom subsequently made purposes to CMS . 185,900 CSA circumstances which had their legal responsibility ended throughout CSA case closure, subsequently made an software to the Little one Upkeep Service.
Of the Acquire and Pay caseload, 63% (2020/21, 72%) of case teams have been contributing in direction of their present legal responsibility. The lower within the monetary 12 months in these paying one thing in direction of their upkeep ought to be seen within the context of decreases within the proportion of Dad and mom paying something in direction of their upkeep due through Deduction from Advantages and Standing order.
Contributory elements embody, however are usually not unique to:
PPs who have been quickly on Common Credit score ( UC ) through the pandemic transferring off advantages.
who have been quickly on Common Credit score ( ) through the pandemic transferring off advantages. A change in authorities coverage in October 2021 which noticed the removing of the momentary £20 uplift for UC claimants. This led to a rise within the variety of UC claimants who have been as a consequence of pay through Deduction from Profit, not having sufficient profit remaining throughout the UC deduction cap to permit a Little one Upkeep deduction to be taken.
At 31 March 2022, 820,000 youngsters have been lined by the CMS : 513,800 by Direct Pay preparations and 292,400 by preparations by the Acquire and Pay Service. Instances overlaying 13,800 youngsters had not been assigned as dad and mom have been contemplating which service to make use of or have been within the course of of adjusting service. If funds are usually not being made by dad and mom utilizing Direct Pay, the RP can ask the CMS to step in, the case is modified to Acquire and Pay, and costs are charged.
As at 31 March 2022, 63% of PPs have been utilizing Direct Pay and 36% the Acquire and Pay Service; 1% of recent purposes, have been nonetheless to be assigned.
Within the final 12 months, the Division estimates that £1,031.4 million (2020/21, £971.9 million[footnote 5]) was paid between dad and mom. These figures embody each funds paid through the Division and voluntary funds the place a fee is made on to the RP by the PP . This estimate assumes that Direct Pay funds due are paid in full and on time by the PP . We recognise this may not be the case however, as famous in 2.2 under, the shopper might change service kind if the association isn’t working.
The totals comprise:
£815.6 million by Direct Pay (2020/21, £782.8 million) and,
£215.8 million by Acquire and Pay (2020/21, £189.1 million).
Even when upkeep is organized by the Acquire and Pay service, there may be events the place the PP makes funds on to the RP and never by the CMG . A case also can change service kind when initiated by a shopper offered the factors laid down in procedures are met.
Because the begin of the CMS 2012 scheme, the Division estimates that £5,209.8 million (31 March 2021, £4,178.4 million) has been paid between dad and mom.
2.2. Direct Pay
Whereas funds made by Direct Pay don’t circulation by the Consumer Funds checking account, they’re a key a part of the reforms. Dad and mom who select Direct Pay are suggested to maintain a file of funds in case there are issues. The place funds due underneath Direct Pay are reported as missed, each shoppers are requested to offer proof of the missed fee to the CMS . In circumstances the place it’s deemed the PP has not paid or is unlikely to pay, the case could also be modified to Acquire and Pay the place enforcement instruments can be found to re-establish compliance and get better any excellent unpaid upkeep, together with any amassed whereas the case was classed as Direct Pay. Except suggested in any other case, the Division assumes Direct Pay funds due are paid in full, and on time, by the PP .
2.3. Acquire and Pay
2.3.1. Receipts and fee of kid upkeep
Throughout 2021/22, 2.4 million (2020/21, 2.2 million) particular person receipts have been obtained totalling £193.1 million (2020/21, £170.4 million) and a couple of.3 million (2020/21, 2.0 million) particular person funds have been made to RPs with a complete worth of £184.2 million (2020/21, £165.4 million). All receipts and funds are made electronically. The overall worth of receipts and funds in 2021/22 have been larger than in 2020/21 reflecting the expansion in circumstances.
Total, in 2021/22, much less funds have been paid out than have been obtained, as a consequence of timing variations and because of the worth of refunds to Employers and PPs . Upkeep monies obtained are paid to RPs as rapidly as attainable, topic to regular banking clearance cycles, if a technique of fee has been provided by the RP . There are events the place funds are pending allocation to a case or have been obtained barely prematurely of when they’re due. This led to the CMS holding a money stability at 31 March 2022 of £12.3 million, after adjusting for our estimate of receipts as a consequence of legacy schemes referred to in Observe 7.2 to the account, equating to five% of the funds obtained through the 12 months (31 March 2021, £11.3 million, 5%).
2.3.2. Unpaid upkeep
Along with reporting the receipts and funds of kid upkeep, the Division is required to report on quantities that PPs owe to RPs. This totalled £474.3 million at 31 March 2022 (31 March 2021, £408.5 million).
Included within the unpaid upkeep balances is a component which has not but been requested from the PP . This happens as a result of there’s a quick interval between the date of the declare and the primary fee being scheduled for fee. At 31 March 2022, this was £4.0 million (31 March 2021, £3.9 million).
Desk 1: Upkeep owing as a proportion of the cumulative upkeep raised, together with cash as a consequence of have been paid by Direct Pay, at 31 March: % 2022 8.3 2021 8.9 2020 9.9 2019 10.8 2018 12.1 2017 12.5 2016 13.3 2015 17.1
At 31 March 2022, 8.3% of kid upkeep organized for the reason that begin of the 2012 scheme was excellent. This measure, which incorporates unpaid upkeep transferred from Direct Pay if a case has modified service kind, has proven a steady enchancment since 2015. Regardless of extra circumstances being moved to enforcement and the Division searching for extra powers, we count on this development to sluggish as soon as all enforcement choices are exhausted or the place prices change into disproportionately excessive to pursue.
When a fee is missed, the CMS contacts the PP to search out out why they haven’t paid and arranges for them to pay what they owe or informs them about attainable enforcement motion if they don’t pay. If the PP is utilizing the Acquire and Payservice, this can occur routinely. If the dad and mom are paying youngster upkeep utilizing Direct Pay, the RP can request that the CMS act. The CMS can accumulate unpaid youngster upkeep in a number of methods. This consists of:
Taking cash from the PPs earnings by a deduction from earnings order/request. The CMS will inform the PPs employer how a lot to take from their wages. The employer should then cross on the cash, or they are often taken to courtroom.
earnings by a deduction from earnings order/request. The desire inform the employer how a lot to take from their wages. The employer should then cross on the cash, or they are often taken to courtroom. Taking cash instantly from the PPs financial institution or constructing society account by deduction order, together with from Joint, Enterprise and Associate accounts linked to the PP .
financial institution or constructing society account by deduction order, together with from Joint, Enterprise and Associate accounts linked to the . Taking the PP to courtroom. The courts can grant legal responsibility orders which permit the dad or mum to be referred to Enforcement Brokers who might promote property to pay the unpaid upkeep and any prices. The courts also can apply a charging order which secures the debt in opposition to a property and finally drive the dad or mum to promote property by an order on the market, utilizing the cash to repay the unpaid upkeep. If these strategies fail, the CMS can apply for the courts to disqualify the dad or mum from driving, ship them to jail or confiscate the passports of non-compliant PPs .
Funds obtained by enforcement actions proceed to extend month on month.
As well as, an growing degree of referrals are being made to the Monetary Investigations Unit to verify that the correct quantity of kid upkeep is being paid. These investigations may be legal investigations to assemble proof to assist determine if a dad or mum may be charged utilizing the Crown Prosecution Service. Investigations may additionally be carried out into why deduction from incomes orders are usually not being profitable in accumulating youngster upkeep, and into complicated earners who’re dad and mom with a number of revenue streams, firm administrators and the self-employed. In these circumstances, the dad or mum might have some management over the best way by which their revenue is paid and the quantity of kid upkeep they’re meant to pay might not mirror the dad or mum’s true revenue. Additional info may be discovered within the CMS statistical publication[footnote 6].
2.3.3. Collectability
As the extent of reported arrears continues to extend, the Division has thought-about the collectability of all unpaid upkeep. The Division continues to focus on unpaid upkeep of all ages and we proceed to see a discount in unpaid upkeep arising in earlier years.
Desk 2: Evaluation of unpaid upkeep by 12 months they originate: As at 31 March 2022 (£m) As at 31 March 2021 (£m) 2013/14 0.6 0.7 2014/15 4.5 5.1 2015/16 11.7 13.3 2016/17 27.4 31.6 2017/18 50.0 58.3 2018/19 71.8 84.7 2019/20 89.6 106.1 2020/21 91.3 108.7 2021/22 127.4 – Whole (see Observe: 7.4) 474.3 408.5
Instances are moved into enforcement and extra dependable strategies of fee reminiscent of deductions from earnings orders are promoted.
Desk 3: Unpaid Upkeep Classes As at 31 March 2022 (£m) As at 31 March 2022 (%) As at 31 March 2021 (£m) As at 31 March 2021 (%) Not due [footnote 7] 4.0 0.9% 3.9 0.9% Scheduled and paying 174.5 36.8% 162.9 39.9% Enforcement 261.6 55.1% 208.3 51.0% Surveillance 26.1 5.5% 28.1 6.9% Pending allocation to a classification 8.1 1.7% 5.3 1.3% Totals 474.3 100% 408.5 100.0%
Not all dad and mom pay all that’s due and because of this, unpaid upkeep balances are rising. To handle this, 55.1% of the quantity excellent is being pursued by enforcement work and 5.5% is in surveillance (the place a Paying Guardian is at the moment unable to pay, and enforcement motion wouldn’t be acceptable at the moment). The Division are actively accumulating 36.8% of scheduled funds.
The Division’s capacity to observe modifications within the life circumstances of our shoppers by new profit claims or new employment particulars, means we’ve extra alternative than the non-public sector to determine or implement compliance by deductions from advantages and deductions from earnings. The Division is reaching compliance now from a big variety of PPs who’ve by no means paid earlier than by deductions from advantages, albeit at a decreased degree, as a consequence of decrease ranges of revenue.
As well as, the Division has vital enforcement powers which aren’t accessible in different sectors e.g., order on the market of property, confiscation of driving licenses and passports, which may be utilised when mandatory. Probably the most extreme additionally act as a big deterrent to non-payment. Work is deliberate to extend visibility of the Division’s powers by campaigns to additional improve the deterrent impact.
After 12 months in enforcement and regardless of these powers, there are some circumstances which stay non-paying. The Division had been utilizing Indesser to evaluate such circumstances however asno extra info was being recognized, system modifications are being carried out to ring-fence these circumstances to find out if there may be proof to help ongoing enforcement motion and they’re being monitored to tell discussions with Ministers and Coverage on their therapy. For the time being, the Division doesn’t intend to actively handle such circumstances until new intelligence is obtained to help recommencement of enforcement motion.
A proportion of debt is written off every year for ‘Enterprise as Regular’ causes reminiscent of when the RP doesn’t want the Division to proceed to pursue a debt. Though the debt isn’t finally collected in these circumstances, the Division doesn’t view this as uncollectable as a result of a choice has been taken to not pursue it. Throughout 2021/22, £9.7m has been written off in opposition to our estimate of £10.6m reported within the 2020/21 Accounts. Our greatest estimate is that we are going to write off within the area of £11.2m in 2022/23.
Desk 4: Estimated ‘Enterprise as Regular’ unpaid upkeep write off in 2021/22 Totals Unpaid Upkeep at 31 March 2021 (£m) 408.5 Unpaid Upkeep Written off throughout 2021/22 (£m) 9.7 % Unpaid upkeep written off 2.4% Unpaid upkeep at 31 March 2022 (£m) 474.3 Estimated unpaid upkeep write off 2022/23 (£m) 11.2
2.3.4. Statutory Little one Upkeep Scheme prices, charges and fees
Non-child upkeep receipts of £49.3 million collected throughout 2021/22 (2020/21, £44.9 million) associated primarily to software charges and assortment and enforcement fees, that are paid to the Secretary of State. The executive price to the CMS of accumulating these charges is reported as a part of the CMG prices throughout the Division for Work and Pensions Useful resource Accounts.
2.3.5. Evaluation accuracy
Evaluation accuracy compares the mixture weekly worth of right and incorrect youngster upkeep calculations to find out the share of circumstances which have been appropriately assessed.
With the 2012 scheme, the Division has simplified the best way it administers youngster upkeep. For instance, it has simplified the calculation and considerably decreased the variety of procedures and handbook interventions concerned in its administration, utilizing direct interfaces with HMRC and the Division’s profit methods to determine parental revenue, thus growing automation of the upkeep calculation.
Automation has a constructive affect on evaluation accuracy and the quantity of automated transactions has remained broadly steady at 75.3% (2020/21, 76.8%). Along with deliberate enhancements underneath the Transformation programme, our response to the pandemic accelerated the shift to digital channels, permitting shoppers to report modifications of their circumstances on-line.
The Division’s High quality Assurance Workforce has reported that the automated calculations they checked have been free from error and when these automated selections are thought-about, reported accuracy has remained steady at 99.4% (2020/21, 99.4%).
Peter Schofield
Principal Accounting Officer
Date: 06 December 2022
3. Assertion of Accounting Officer’s obligations
As Principal Accounting Officer of the Division, I’ve accountability for the 2012 scheme Consumer Funds Account.
Beneath Part 7(1) and (2) of the Authorities Sources and Accounts Act 2000, HM Treasury has directed the Division for Work and Pensions to arrange, for every monetary 12 months, a Consumer Funds Account for the 2012 statutory scheme within the kind and on the premise set out within the Accounts Course.
In getting ready the account, the Accounting Officer shall observe related accounting and disclosure necessities within the Authorities Monetary Reporting Guide ( FReM ), in as far as it applies to a receipts and funds account, and some other steering issued by HM Treasury, particularly to:
observe the Consumer Funds Account Course issued by HM Treasury, together with the related accounting and disclosure necessities, and apply appropriate accounting insurance policies on a constant foundation
make judgements and estimates on an inexpensive foundation
put together the Account on a going concern foundation
The obligations of an Accounting Officer, together with accountability for the propriety and regularity of the general public funds for which the Accounting Officer is answerable, for conserving correct information, and for safeguarding property, are set out within the Accounting Officers’ Memorandum, issued by HM Treasury and revealed in Managing Public Cash.
I affirm that there isn’t any related audit info that the Comptroller and Auditor Normal has not been made conscious of, and that I’ve taken all mandatory steps to make sure entry to related info has been given. I also can affirm that this report as a complete and the judgement required in getting ready it, is truthful, balanced and comprehensible, and that I take private accountability for this being so.
Peter Schofield
Principal Accounting Officer
Date: 06 December 2022
4. Governance Assertion
4.1. Introduction
The Division has accountability for the administration of shopper funds regarding the 2012 statutory youngster upkeep scheme. The Division operates the 2012 scheme by the CMS , a part of the CMG .
The Division should put together a Consumer Funds Account for the 2012 scheme in accordance with our HM Treasury Course underneath Part 7 of the Authorities Sources and Accounts Act 2000.
The governance preparations set out within the Departmental Useful resource Account for 12 months ended 31 March 2022 relate to CMG , as CMG is an intrinsic a part of the Division. This assertion covers subjects that are due to this fact relevant to the CMS working throughout the Division.[footnote 8]
In December 2012, the Division launched the 2012 statutory youngster upkeep scheme, delivered by the CMS and by 31 December 2018 all circumstances on the prevailing 1993 and 2003 schemes had their legal responsibility ended. In consequence, dad and mom had to decide on between making their very own, family-based association, or making an software to the CMS the place a family-based association isn’t attainable. Excellent arrears balances have moved from 1993 and 2003 laptop methods to the CMS 2012 laptop system. These arrears proceed to narrate to, and shall be reported in, the Consumer Funds Account for the 1993 and 2003 schemes.
4.2. Areas for Steady Enchancment: 2012 scheme
There are a number of areas of steady enchancment deliberate in relation to the 2012 scheme.
4.2.1. System upgrades
System and course of modifications will at all times carry a small degree of danger even after in depth testing.
System modifications are launched all year long to ship focused enhancements in performance. Some have been already deliberate as a part of a three-year Little one Upkeep Service Transformation Programme which goals to permit prospects and caseworkers to handle youngster upkeep preparations in an environment friendly and handy approach by on-line companies.
Architectural modifications are additionally made to make sure the CMS system stays totally supported and aligned with the Division’s Digital methods.
All modifications have been efficiently carried out.
4.2.2. Evaluation accuracy
The Division’s estimate of evaluation accuracy for 2021/22 is 99.4%, which is unchanged from 2020/21 (99.4%).
The Division expects automation to proceed to have a constructive affect on accuracy because the proportion of calculations carried out by the system rises relative to the handbook exercise of caseworkers. While the danger of handbook caseworker error can’t be eliminated, vital efforts are being made to cut back the chance of error.
Higher Administration Info ( MI ) has additionally contributed to enhancing accuracy by elevated transparency of the CMS 2012 system. CMG operations has carried out focused checking regimes, developed utilizing this improved MI . This has allowed early identification of rising developments, permitting better concentrate on getting issues proper first time for the shopper. New and improved coaching supplies have been developed and work can be being performed to embed a tradition of steady enchancment.
4.2.3. Info safety
The Division takes its obligations relating to the massive portions of private knowledge which can be processed critically, and the Division is dedicated to treating shopper’s knowledge with respect and in ways in which meet knowledge safety and different privateness necessities. The Division’s Knowledge Safety Coverage units out how compliance with its duties are achieved underneath the UK Normal Knowledge Safety Regulation (UK GDPR ) and the Knowledge Safety Act 2018 ( DPA ).
The Division modified the retention interval to 24 months for supporting information in 2021/22 in response to exterior audit findings within the 2020/21 audit to be in step with Nationwide Archives Steering, while remaining compliant with GDPR .
In relation to non-public knowledge breaches, the Division follows the rules from the Info Commissioner (the ICO ).
Throughout monetary 12 months 2021/2022 the Division’s Knowledge Safety workforce reported 14 private knowledge breaches to the ICO , 4 of those have been in respect of CMG (2020/21, 15). There have been additionally 180 enquiries within the type of Requests for Evaluation (RFAs) from the ICO for a similar interval for the entire of Division, of which 28 (2020/21, 43) particularly concerned enquiries about CMG . This knowledge isn’t collected at scheme degree. The reductions in CMG incidents are as a consequence of work performed to boost consciousness round knowledge breaches and the implementation of recent processes.
CMG recognises the significance of defending shopper’s knowledge and have delivered safety consciousness and schooling classes to all our employees, utilizing inside communications to strengthen the affect that incorrect knowledge and safety breaches have on our shoppers and updating safety procedures to be extra reflective and simpler to observe for caseworkers.
Accountability for breaches has visibility at senior ranges bolstered by enhancements in Administration Info
4.2.4. Administration Info
An replace to the technique for the publication of data on the efficiency of the 2012 scheme, delivered by the CMS , was revealed in November 2016 with plans to extend the vary and assurance ranges of revealed knowledge.
Experimental official statistics are revealed quarterly. The vary of statistics included within the experimental statistics has grown for the reason that inception of the scheme. See the vary of experimental statistics.
Along with the revealed statistics, the Division makes use of a variety of MI to manage the processing of purposes, modifications of circumstances and different enterprise actions. The MI that the Division produces has enabled the Division to remain in charge of work consumption, minimise backlogs and ship agreed service ranges.
A brand new CMG knowledge and analytics service, Youngsters Analytical Knowledge Service ( ChADS ), was initiated in 2019/20 and after in depth assurance actions went stay in 2021/22. It was delivered in a number of phases, commencing with the transition of present finance reporting functionality, then broadening the scope of deliverables to boost performance.
A full parallel run of the prevailing finance reporting functionality has been undertaken for the ultimate 3 months of the reporting 12 months. Stay feeds have been then decommissioned to ship price financial savings to the Division and the outdated system shall be decommissioned throughout 2022. We’re already seeing a spread of advantages, together with:
Enhanced knowledge visualisation and evaluation functionality.
Important enhancements and efficiencies within the provision of information: a discount in system response occasions, and a discount in handbook effort / dealing with.
Provision of a giant CMG knowledge repository, which shall be exploited to quickly develop new finish consumer merchandise.
knowledge repository, which shall be exploited to quickly develop new finish consumer merchandise. The flexibility to exchange and decommission CMG ’s present MI options.
4.2.5. Detection of fraud and error
The Division has in place controls to stop and detect fraud and error by youngster upkeep employees. An Audit Path course of exists to allow the Division to offer a single, consolidated view of all audited consumer exercise on the Division’s methods, to enhance the detection and deterrence of information misuse. The audit path provision requires a cohesive collaborative working relationship between quite a lot of independently managed groups together with:
The Administration Info and Audit Necessities workforce ( MIART ) workforce who’re answerable for the identification, improvement and enhancement of audit trails and related Administration Info.
) workforce who’re answerable for the identification, improvement and enhancement of audit trails and related Administration Info. The Audit Knowledge as a Service Workforce- ADaaS , who present the evaluation of consumer actions on DWP IT methods utilizing an agreed algorithm which increase exceptions requiring additional investigation
, who present the evaluation of consumer actions on IT methods utilizing an agreed algorithm which increase exceptions requiring additional investigation The Inside Abuse Monitoring workforce who’re a part of the Cyber Resilience Centre ( CRC ) and who’ve Departmental accountability for creating pre-defined enterprise exercise or dangers in opposition to which audit trails are run to detect/deter knowledge misuse.
CMG present audit knowledge feeds to ADaaS which allow CRC to observe probably inappropriate exercise inside these methods. The Division at all times investigates such circumstances and would possibly uncover actions which transcend fraud within the context of kid upkeep. As such, it isn’t attainable to ascribe a sturdy estimate particular to youngster upkeep fraud. The Division does nonetheless refer findings to the ICO and prosecutes as acceptable. The extent of error arising from caseworker actions is referred to in Evaluation accuracy (2.3.5 and 4.2.2) above.
5. Certificates and Report of the Comptroller and Auditor Normal to the Home of Commons
Opinion on monetary statements
I certify that I’ve audited the monetary statements of the Consumer Funds 2012 Little one Upkeep Schemes Account for the 12 months ended 31 March 2022 underneath the Authorities Sources and Accounts Act 2000. The monetary statements comprise the Receipts and Funds Assertion, the Assertion of Balances, and the associated notes together with the numerous accounting insurance policies.
The monetary reporting framework that has been utilized within the preparation of the monetary statements is relevant legislation and the Accounts Course issued by HM Treasury underneath the Authorities Sources and Accounts Act 2000.
In my view, the monetary statements:
correctly current the Consumer Funds 2012 Little one Upkeep Schemes Account’s Assertion of Balances as at 31 March 2022 and its receipts and funds for the 12 months then ended; and
have been correctly ready in accordance with the Authorities Sources and Accounts Act 2000 and HM Treasury instructions issued thereunder.
Opinion on regularity
In my view, in all materials respects, the revenue and expenditure recorded within the monetary statements have been utilized to the needs supposed by Parliament and the monetary transactions recorded within the monetary statements conform to the authorities which govern them.
Foundation for opinions
I performed my audit in accordance with Worldwide Requirements on Auditing (UK) ( ISAs UK), relevant legislation and Observe Observe 10 Audit of Monetary Statements of Public Sector Entities in the UK. My obligations underneath these requirements are additional described within the Auditor’s obligations for the audit of the monetary statements part of my certificates.
These requirements require me and my employees to adjust to the Monetary Reporting Council’s Revised Moral Customary 2019. I’ve additionally elected to use the moral requirements related to listed entities. I’m impartial of the Consumer Funds 2021 Little one Upkeep Schemes Accounts and the Division for Work and Pensions (the Division) in accordance with the moral necessities which can be related to my audit of the monetary statements within the UK. My employees and I’ve fulfilled our different moral obligations in accordance with these necessities.
I consider that the audit proof I’ve obtained is adequate and acceptable to offer a foundation for my opinion.
Conclusions regarding going concern
In auditing the monetary statements, I’ve concluded that the Consumer Funds 2012 Little one Upkeep Schemes Account’s use of the going concern foundation of accounting within the preparation of the monetary statements is suitable.
Primarily based on the work I’ve carried out, I’ve not recognized any materials uncertainties regarding occasions or circumstances that, individually or collectively, might forged vital doubt on the Consumer Fund’s capacity to proceed as a going concern for a interval of at the least twelve months from when the monetary statements are authorised for difficulty.
My obligations and the obligations of the Accounting Officer with respect to going concern are described within the related sections of this certificates.
Different Info
The opposite info contains info included within the Foreword, Background, Efficiency throughout 2021/22, Assertion of Accounting Officer’s Duties and Governance Assertion. The Accounting Officer is answerable for the opposite info.
My opinion on the monetary statements doesn’t cowl the opposite info and, besides to the extent in any other case explicitly said in my certificates, I don’t categorical any type of assurance conclusion thereon.
In reference to my audit of the monetary statements, my accountability is to learn the opposite info and, in doing so, take into account whether or not the opposite info is materially inconsistent with the monetary statements or my data obtained within the audit or in any other case seems to be materially misstated.
If I establish such materials inconsistencies or obvious materials misstatements, I’m required to find out whether or not this offers rise to a cloth misstatement within the monetary statements themselves. If, primarily based on the work I’ve carried out, I conclude that there’s a materials misstatement of this different info, I’m required to report that reality.
I’ve nothing to report on this regard.
Opinion on different issues
In my view, primarily based on the work undertaken in the midst of the audit
the components of the Foreword, Background, Efficiency throughout 2021/22, Assertion of Accounting Officer’s Duties and Governance Assertion topic to audit have been correctly ready in accordance with HM Treasury instructions made underneath the Authorities Sources and Accounts Act 2000;
the data given within the Foreword, Background, Efficiency throughout 2021/22, Assertion of Accounting Officer’s Duties and Governance Assertion for the monetary 12 months for which the monetary statements are ready is in line with the monetary statements and is in accordance with the relevant authorized necessities.
Issues on which I report by exception
Within the mild of the data and understanding of the Consumer Funds 2012 Little one Upkeep Schemes Account and its setting obtained in the midst of the audit, I’ve not recognized materials misstatements within the Foreword, Background, Efficiency throughout 2021/22, Assertion of Accounting Officer’s Duties and Governance Assertion.
I’ve nothing to report in respect of the next issues which I report back to you if, in my view:
I’ve not obtained all the info and explanations I require for my audit; or
enough accounting information haven’t been saved by the Division or returns enough for my audit haven’t been obtained from branches not visited by my employees; or
the monetary statements and the components of Foreword topic to audit are usually not in settlement with the accounting information and returns; or
the Governance Assertion doesn’t mirror compliance with HM Treasury’s steering.
Duties of the Accounting Officer for the monetary statements
As defined extra totally within the Assertion of Accounting Officer’s Duties, the Accounting Officer is answerable for:
sustaining correct accounting information;
the monetary statements and Annual Report are correctly introduced in accordance with the relevant monetary reporting framework;
guaranteeing that the Annual Report and accounts as a complete is truthful, balanced and comprehensible;
getting ready the Foreword and Administration commentary, Assertion of Accounting Officer’s Duties, and a Governance Assertion in accordance with the Accounts Course issued by HM Treasury;
inside controls because the Accounting Officer determines is important to allow the preparation of monetary assertion to be free from materials misstatement, whether or not as a consequence of fraud or error; and
assessing the Consumer Funds 2012 Little one Upkeep Schemes Account capacity to proceed as a going concern, disclosing, as relevant, issues associated to going concern and utilizing the going concern foundation of accounting until the Accounting Officer both intends to liquidate the entity or to stop operations, or has no real looking different however to take action.
Auditor’s obligations for the audit of the monetary statements
My accountability is to audit, certify and report on the monetary statements in accordance with the Authorities Sources and Accounts Act 2000.
My goals are to acquire affordable assurance about whether or not the monetary statements as a complete are free from materials misstatement, whether or not as a consequence of fraud or error, and to difficulty a certificates that features my opinion. Cheap assurance is a excessive degree of assurance however isn’t a assure that an audit performed in accordance with ISAs (UK) will at all times detect a cloth misstatement when it exists. Misstatements can come up from fraud or error and are thought-about materials if, individually or within the mixture, they might fairly be anticipated to affect the financial selections of customers taken on the premise of those monetary statements.
Extent to which the audit was thought-about able to detecting non-compliance with legal guidelines and laws together with fraud.
I design procedures in step with my obligations, outlined above, to detect materials misstatements in respect of non-compliance with legal guidelines and laws, together with fraud. The extent to which my procedures are able to detecting non-compliance with legal guidelines and laws, together with fraud is detailed under.
Figuring out and assessing potential dangers associated to non-compliance with legal guidelines and laws, together with fraud.
In figuring out and assessing dangers of fabric misstatement in respect of non-compliance with legal guidelines and laws, together with fraud, we thought-about the next:
the character of the sector, management setting and operational efficiency together with the design of the Consumer Funds 2012 Little one Upkeep Schemes Account and Division’s accounting insurance policies, key efficiency indicators and efficiency incentives.
Inquiring of administration, Authorities Inside Audit Company ( GIAA ) and people charged with governance, together with acquiring and reviewing supporting documentation regarding the Consumer Funds 2012 Little one Upkeep Schemes Account and Division’s insurance policies and procedures regarding: figuring out, evaluating and complying with legal guidelines and laws and whether or not they have been conscious of any cases of non-compliance; detecting and responding to the dangers of fraud and whether or not they have data of any precise, suspected or alleged fraud; and the interior controls established to mitigate dangers associated to fraud or non-compliance with legal guidelines and laws together with the Consumer Funds 2012 Little one Upkeep Schemes Account and Division’s controls regarding the Consumer Funds 2012 Little one Upkeep Schemes Account compliance with Managing Public Cash, the related Accounts Course issued underneath the Authorities Sources and Accounts Act 2000 and different related laws regarding Little one Help and Upkeep
discussing among the many engagement workforce relating to how and the place fraud would possibly happen within the monetary statements and any potential indicators of fraud.
Because of these procedures, I thought-about the alternatives and incentives that will exist throughout the Consumer Funds 2012 Little one Upkeep Schemes Account for fraud and recognized the best potential for fraud within the following areas: administration’s estimate of money and the posting of bizarre journals. In frequent with all audits underneath ISAs (UK), I’m additionally required to carry out particular procedures to answer the danger of administration override of controls.
I additionally obtained an understanding of the Consumer Funds 2012 Little one Upkeep Schemes Account framework of authority in addition to different authorized and regulatory frameworks by which the Consumer Funds 2012 Little one Upkeep Schemes Account operates, specializing in these legal guidelines and laws that had a direct impact on materials quantities and disclosures within the monetary statements or that had a basic impact on the operations of the Consumer Funds. The important thing legal guidelines and laws I thought-about on this context included Managing Public Cash, the related Accounts Course issued underneath the Authorities Sources and Accounts Act 2000 and different related laws regarding Little one Help and Upkeep.
As well as, I thought-about particular danger assessments carried out in respect of serious dangers regarding non-compliance with legal guidelines and laws or fraud, together with risk-based sampling of handbook journals to establish these presenting larger danger of fraud, and understanding modifications to the laws related to Little one Upkeep and Help.
Audit response to recognized danger
Because of performing the above, the procedures I carried out to answer recognized dangers included the next:
reviewing the monetary assertion disclosures and testing to supporting documentation to evaluate compliance with provisions of related legal guidelines and laws described above as having direct impact on the monetary statements;
enquiring of administration and the Audit and Threat Committee regarding precise and potential litigation and claims;
studying and reviewing minutes of conferences of these charged with governance and the Board and inside audit stories;
in addressing the danger of fraud by administration override of controls, testing the appropriateness of journal entries and different changes; assessing whether or not the judgements made in making accounting estimates are indicative of a possible bias; and evaluating the enterprise rationale of any vital transactions which can be uncommon or exterior the conventional course of enterprise;
reviewing the processes, verifying the information used and the appropriateness of the assumptions and judgements utilized for the estimate related to money allocation within the accounts;
in addressing the danger of non-compliance of Receipts and Funds with the related Little one Upkeep laws, understanding and assessing the affect of upkeep assessments on the regularity of transactions;
assessing the affect of incorrect upkeep evaluation and arrears adjustment errors on the valuation of the arrears stability; and
performing testing of arrears written-off through the 12 months to supporting proof, to make sure that these changes have been compliant with the related laws.
I additionally communicated related recognized legal guidelines and laws and potential fraud dangers to all engagement workforce members and remained alert to any indications of fraud or non-compliance with legal guidelines and laws all through the audit.
An extra description of my obligations for the audit of the monetary statements is positioned on the Monetary Reporting Council’s web site. This description types a part of my certificates.
Different auditor’s obligations
I’m required to acquire proof adequate to provide affordable assurance that the revenue and expenditure reported within the monetary statements have been utilized to the needs supposed by Parliament and the monetary transactions conform to the authorities which govern them.
I talk with these charged with governance relating to, amongst different issues, the deliberate scope and timing of the audit and vital audit findings, together with any vital deficiencies in inside management that I establish throughout my audit.
Report
I’ve no observations to make on these monetary statements.
Gareth Davies
Comptroller and Auditor Normal
Date: 08 December 2022
Nationwide Audit Workplace
157-197 Buckingham Palace Highway
Victoria
London
SW1W 9SP
6. Monetary Statements
6.1. Receipts and Funds Assertion for the 12 months ended 31 March 2022
Receipts/Funds Notes 2021/22 (£000’s) 2020/21 (£000’s) Receipts: Little one Upkeep from Paying Dad and mom 193,129 170,394 Receipts: Charges, fees and different recoveries collected on behalf of the Secretary of State 49,277 44,897 Whole Receipts 7.2 242,406 215,291 Funds to: Little one Upkeep to Receiving Dad and mom 184,173 165,367 Funds to: Refunds to Paying Dad and mom/employers 7,938 5,521 Funds to: Charges, fees and different recoveries collected on behalf of the Secretary of State 49,277 44,897 Whole Funds 7.2 241,388 215,785 Internet receipts/(funds) 1,018 (494) Stability as at 1 April 11,322 11,816 Stability as at 31 March 7.3 12,340 11,322
6.2. Assertion of Balances as at 31 March 2022
Stability Notes 31 March 2022 (£000’s) 31 March 2021 (£000’s) Opening stability 11,322 11,816 Motion in 12 months 1,018 (494) Closing stability 7.3 12,340 11,322
Peter Schofield
Principal Accounting Officer
Date: 06 December 2022
7. Notes to the account for the 12 months ended 31 March 2022
7.1. Assertion of Accounting insurance policies
The account has been ready within the kind directed by HM Treasury and reveals receipts into and funds out of, the Consumer Funds financial institution accounts through the monetary 12 months, to the extent that these relate to quantities assessed underneath the CMS 2012 scheme. A component of those receipts and money is estimated as described in Notes 7.2 and seven.3 under and accounts adjusted to mirror this greatest estimate.
The mixture of the upkeep evaluation balances firstly and finish of the monetary 12 months are reported on an accrual’s foundation, together with actions in these arrear’s balances through the monetary 12 months.
The account has been ready underneath the historic price conference.
7.2. Receipts and funds
Receipts from shoppers relate to youngster upkeep and likewise software charges and fees collected from Paying and Receiving Dad and mom utilizing the Acquire and Pay Service. Recoveries are additionally obtained from PPs in respect of non-child upkeep funds, reminiscent of DNA and courtroom prices.
The receipts quoted within the Receipts and Funds Assertion (6.1) differ from the receipts whole proven in actions on excellent unpaid upkeep (7.4). That is principally as a consequence of timing variations and the inclusion of non-maintenance receipts within the quantities proven within the Receipts and Funds Assertion.
Most receipts obtained within the checking account may be recognized at a shopper degree, allotted to the right service and reported within the acceptable annual account. Nonetheless, receipts don’t allocate instantly, for causes reminiscent of; customary financial institution clearance occasions, incorrect reference numbers quoted by PPs , legal responsibility not but due and extra. Till receipts are allotted, the Division isn’t at all times in a position to decide whether or not it pertains to a CMS case, or a CSA case which has transitioned to the CMS 2012 IT system. In consequence, a component of the overall receipts have to be estimated, as described additional in notice 7.3 Assertion of balances.
Along with funds of kid upkeep, refunds and reimbursements are made to PPs and employers for overpayments of upkeep and any prices recovered from PPs and revenue from charges and fees are paid to the Division.
7.3. Assertion of balances
The balances relate to monies collected, which had not been paid over at 12 months finish and have been held within the Consumer Funds financial institution accounts. Because the historic methods and related financial institution accounts have closed, CMG now makes use of frequent financial institution accounts for each CMS circumstances and CSA circumstances which have transitioned to the CMS system. As such, the CMS financial institution stability as on the 31 March every year consists of each CSA and CMS balances.
Nonetheless, as highlighted in Observe 7.2, the Division is unable to totally analyse every receipt held at 12 months finish and as such, a component of the financial institution assertion have to be estimated.
At 31 March 2022, the CMS checking account stability was £12.8m. Of this stability, £9.8 million has been recognized as attributable to the CMS 2012 scheme, £0.2 million to the 1993 and 2003 schemes, and £2.8 million can’t be decided. This stability has been apportioned primarily based on receipts really allotted to every of the schemes through the 2021/22 reporting 12 months and 89% (£2.5m) has been included within the CMS 2012 scheme receipts and stability, with the remaining 11% (£0.3 million) included throughout the 1993 and 2003 scheme accounts.
The money stability included within the CMS 2012 scheme accounts of £12.3 million is made up of £9.8 million which has been instantly attributed, and £2.5 million apportioned primarily based on annual receipts.
7.4. Actions in unpaid upkeep
Beneath the Accounts Course dated 6 Could 2015 issued by HM Treasury, the Division is required to reveal the balances excellent from PPs on the year-end, and the actions within the balances excellent between the start and finish of the 12 months.
Unpaid Upkeep Notes 31 March 2022 (£000’s) 31 March 2021 (£000’s) Excellent unpaid upkeep at begin of 12 months 7.4.1 408,516 354,340 Upkeep charged in 12 months and different changes 7.4.1 263,414 232,138 Write Off 7.4.2 (9,682) (9,307) Upkeep obtained within the 12 months 7.4.3 (187,992) (168,655) Excellent unpaid upkeep at 12 months finish 7.4.4 474,256 408,516
7.4.1. Upkeep charged in 12 months and different changes
This contains assessments made on PPs through the 12 months; excellent upkeep arrears transferred to and from the Division for Communities in Northern Eire. Changes can come up from cancelled or terminated assessments; or the place the legal responsibility has been decreased, for instance, due to a direct fee between events being offset in opposition to the upkeep due. As soon as the preliminary calculation is offered to shoppers, they’re given a possibility to evaluate and make sure particulars earlier than a fee schedule is issued. This mandatory delay implies that some arrears have amassed earlier than the fee plan is in place, which is often scheduled for receipt within the first 12 months.
7.4.2. Write Off
CMG has continued to utilize write off powers granted as a part of Write off and Half Cost laws launched in 2010. The laws enable half fee of kid upkeep arrears to be accepted in full and ultimate settlement with the settlement of the RP . The laws additionally enable youngster upkeep arrears to be written off in sure specific circumstances for instance the place the RP tells us that they don’t need the arrears to be collected or the PP has died. If a PP dies and there are arrears of kid upkeep excellent, the CMG could make a declare for these arrears in opposition to the property of a deceased dad or mum, the place it’s acceptable to take action.
7.4.3. Upkeep obtained within the 12 months
When a receipt is allotted to a case by the CMS 2012 system, the receipt reduces the excellent legal responsibility of the PP instantly however doesn’t pay out to the RP till funds are cleared. Occasions fluctuate relying on the strategy of fee and its related clearance cycle. The overall worth of upkeep receipts allotted to circumstances in 2021/22 was £188 million (2020/21, £168.7 million). The principal distinction between the worth of the receipts within the Receipts and Funds Assertion 6.1 2021/22, £242.4 million (2020/21, £215.3 million) and people reported in Observe 7.4 is because of the inclusion of non-child upkeep receipts, primarily charges and fees within the Receipts and Funds Assertion. Additionally, the Receipts and Funds assertion is ready on a money foundation so there’s a additional timing distinction between money being obtained in our checking account and being allotted to a case.
7.4.4. Excellent upkeep arrears as at 31 March 2022
That is the stability of excellent upkeep arrears recognised by the Division, after permitting for upkeep assessments within the 12 months and after upkeep receipts have been deducted.
There have been no occasions after the reporting interval.
These accounts have been authorised for difficulty on the date the Comptroller & Auditor Normal signed his certificates and report.