Mary Coughlan TD, Minister for Social and Family Affairs today welcomed the publication of the Comptroller and Auditor General's Value for Money Report on Control Activity in her Department.
"Control of fraud, abuse and error is an essential part of the work of my department". "Fraud and abuse represent a misuse of taxpayers money and I intend to ensure that the Department's efforts are directed at ensuring that social welfare funds go only to those who are entitled to them," said Mary Coughlan.
"The examination carried out by the C&AG raises a number of important issues in relation to control activity in the Department which will be taken on board in the context of implementing the new control strategy which I have put in place."
A survey on the Unemployment and One-parent Family Payment Schemes was carried out to establish the underlying levels of fraud and error. These types of surveys will become part of the overall Control Strategy.
"In light of the experience gained in the Department from the surveys, three further surveys are planned for this year. These surveys will form a key element in my Departments plan to develop new performance indicators over the next few years," said Minister Coughlan.
"A key objective in the implementation of the 2003 Control Strategy is to ensure that in the control and delivery of services the Department pays the right person the right amount at the right time," said Minister Coughlan.
A four-pronged approach has been adopted by the Department to meet this objective;
Prevention - Having systems and procedures in place that prevent and minimise the risks of fraud, abuse and error
Detection - Detecting fraud, abuse and error at the earliest possible stage
Deterrence - Developing an anti-fraud culture among staff and the public by promoting public awareness of the risk and penalties involved in defrauding the Social Welfare system and dealing decisively with cases if fraud and abuse detected.
Debt Recovery - Actively pursuing the recovery of all debts
The report examined the extent to which the Department's existing control activity is based on an assessment of the risks of fraud and error attaching to the different schemes and the effectiveness of the Department's performance in the control area generally. The report highlights that the Department has carried out good work in identifying potential gaps in procedures which could lead to exposure to fraud and that it is building on that work.
The report acknowledges the emphasis the Department's new Control Strategy places on the undertaking of risk analysis of schemes to identify those schemes where there is a high risk of fraud and abuse. The risk analysis process commenced in late 2003, when nine schemes with the highest levels of expenditure, undertook formal risk assessments. This process will ensure that control activity will in future be more efficiently and effectively focussed on areas of high risk.
"The development within my Department of a new Central Overpayments and Debt Management System will provide a facility to contribute to more targeted control work by identifying high risk schemes, weaknesses in present control systems and provide information on the main types of fraud and error occurring within schemes," said Minister Coughlan.
In 2003, the Department realised total savings of €306.18 million in combating fraud and abuse involving 320,000 claim reviews and 7,600 employer inspections. The implementation of the 2003 Control Strategy as outlined by the Comptroller and Auditor General in his report will provide a basis for the introduction of new performance indicators and facilitate better planning and targeting of control activity.
The Comptroller and Auditor General examined the Departments programme of reviewing customers continuing entitlement to payments, the effectiveness of which is currently measured by the amount of savings achieved and the number of reviews undertaken. He recommended that new performance indicators be developed which would enable review activity to be better targeted and more effective.
The report emphasises the positive outcomes from a number of initiatives, which have resulted in significant savings, the Department has undertaken in recent years using the information held on its computer database. These include;
- Student Data-matching Project
This project involves matching details of full-time registered third level students against the Department schemes. In 2002 and 2003 this project yielded savings of €650,000 and €1.3 million respectively.
- Revenue Data-matching Project
The exercise involves matching data from Revenue on people who have commenced employment against the Unemployment and One Parent Family Payment schemes. In 2002 and 2003 reported savings were €16.4million and €18.19million respectively.
The report recognises that the Department is responding to current system deficiencies through the development of an integrated IT system for its long-term schemes, which will facilitate a more integrated approach to control activity.
The report places an emphasis on the use of prosecutions as an effective deterrent against fraud. It mentions that revised prosecution guidelines issued to staff in February 2003 and notes that the Departments policy is to consider all cases of fraud and abuse for prosecution. The focus of prosecution is on the more serious cases in particular on those cases where there has been previous abuse of the system.
The report also includes an examination of detected overpayments finding that fraud accounted for 48% of all overpayments detected, customer error accounted for 25%, departmental error 5% and 22% from what are known as 'estate cases'. These involve repayment of overpayments from the estates of deceased customers who had failed to make a full disclosure of their means when claiming a social welfare payment from the Department.
The report emphasises that an analysis of detected overpayments gives a useful insight into the main causes of overpayments and can point to areas where action needs to be taken either by implementing new controls or modifying existing procedures so as to reduce the level and value of overpayments occurring.
26th February 2004