UK Immigration Compliance Audits and Training for Employers

1. Introduction to UK Immigration Compliance Audits

UK immigration compliance audits are designed to ensure employers sponsoring overseas workers comply with immigration laws, specifically relating to illegal working. These audits may be conducted by the Home Office without prior notice. Employers must maintain up-to-date and accurate sponsorship and right-to-work records and demonstrate adherence to sponsor licence duties.

Purpose of Immigration Compliance Audits:

• Prevent illegal working.

• Ensure sponsor licence holders meet their obligations.

• Assess record-keeping and reporting standards.

• Detect and deter non-compliance or fraudulent behaviour.

What Employers Need to Prepare:

• Complete and accurate records of each sponsored worker.

• Evidence of recruitment, job description, and salary.

• Copies of right-to-work checks.

• Updates on any changes in the employee's circumstances.

Failing a compliance audit can result in:

• Sponsor licence suspension or revocation.

• Downgrading of sponsor rating.

• Civil penalties and reputational damage.

Employers are advised to carry out internal audits regularly to ensure compliance.

​

2. Homes England Compliance Audit (2024-2025)

Overview: The Compliance Audit programme ensures that organisations receiving Homes England grant funding have met all funding conditions and responsibilities as stated in the Capital Funding Guide (CFG). Independent auditors conduct standardised checks on a sample of schemes.

Scope:

• Applies to Affordable Housing Programmes.

• Audits cover past and current schemes.

• Does not reduce provider responsibility to ensure grants are appropriately claimed.

Systems Used:

• Compliance Audit System (web-based).

• Access managed through IMS Security Module.

Providers and auditors must complete system setup at least 5 weeks before the long-stop date.

​

3. Compliance Audit Process

a. Notification and Sample Selection

• Homes England notifies selected providers.

• Notification includes scheme type and quantity.

b. Independent Auditor Appointment

• Must be appointed in line with Chapter 6 of the CFG.

• Auditor details and audit dates to be confirmed on the system.

• Training and certification are required.

c. Audit Execution

• Auditor reviews provider files using Homes England’s checklists.

• Responses and supporting documents uploaded to the system.

• Findings must not be shared with providers before submission.

• Submission deadline: 5 weeks from audit start date.

d. Fraudulent Behaviour Reporting

• Any suspicion must be reported immediately to the Compliance Audit team.

​

4. Provider Response & Homes England Assessment

Provider Response:

• Providers have 10 working days to respond to findings.

• May submit additional documents or clarification.

Audit Report Creation:

• Homes England assigns breach severities: Low, Medium, High.

• Final grades assigned: Green, Amber, Red.

Grades Defined:

• Green: Meets requirements, only minor issues.

• Amber: Some failures, no misuse of funds.

• Red: Serious failures, potential misuse of funds.

Remedial Actions:

• Recommendations for improvement.

• Possible grant recovery or sanctions in severe cases.

​

5. Final Steps and Governance

Moderation and Notification:

• All audit grades are moderated.

• Reports are confidential and shared with relevant executives and board chairs.

Board Acknowledgement:

• Within 3 months, providers must log into the system and confirm:

  • The board/committee has reviewed the report.

  • Agreed action plan to address breaches.

Responsibility:

• Providers must act on audit recommendations.

​

6. Relevant Documents & Policies

Mandatory Reference Materials:

• Capital Funding Guide – Chapter 6

• Programme-Specific Contracts and Prospectuses:

  • Affordable Homes Programme 2021–2026

  • Shared Ownership & Affordable Homes Programme 2016–2021

  • Rough Sleeping Accommodation Programme

  • Move On Fund

  • Single Homelessness Accommodation Programme

​

​