Vol. 382 No. 11
asked the Minister for Social Welfare if, in relation to the security review of the social welfare payments system carried out by the Craig Gardner Management Consultants, he will indicate the extent of the fraud identified; the steps he has taken to eliminate the possibility of such fraud continuing in the future; and if he will make a statement on the matter.
4.
asked the Minister for Social Welfare if he will outline the main findings of the management consultants who undertook a review of the payments methods in place in his Department; and whether he intends to implement any or all of the findings.
20.
asked the Minister for Social Welfare the total moneys paid to Craig Gardner, Management Consultants in respect of the report they produced on the social welfare payments system; the reason the full report has not yet been published; if he will arrange to have a full copy lodged in the Library of the Houses of the Oireachtas; and if he will make a statement on the matter.
I propose to take Questions Nos. 2, 4 and 20 together.
Craig Gardner Management Consultants were commissioned to examine the major payment systems in my Department in order to establish where the systems are most at risk and to advise on the best cost-effective measures to keep these risks to a minimum. Following a detailed examination of the Department, the consultants submitted three reports containing a large number of recommendations, ranging from organisational arrangements to changes in particular controls and procedures. The total moneys paid to the consultants in respect of the project was £224,710 exclusive of VAT.
As far as publication of the reports is concerned, I have on previous occasions explained to the House that in view of the confidential nature of many of the consultants' findings I am satisfied that it would not be appropriate to publish them. The reports deal with much of the day-to-day control measures of the Department in relation to schemes and it would be counter-productive to publish these. I have, however, made available a summary of the reports in booklet form and this has been circulated to Members of the House.
The summary booklet outlines the consultants' main findings and recommendations. Broadly, they reported on organisational and procedural weaknesses, on the inadequacy of certain control procedures and on the difficulties which reliance on outside agencies can cause. In a separate study, the consultants assisted my Department in developing statistical sampling methods to estimate the level of social welfare abuse. The results of a survey of disability benefit and unemployment payments abuse levels in the Dublin area are contained in the summary booklet.
I am committed to tackling the issues raised in the reports and to introducing operational changes which will reduce exposure to abuse in the system. At the same time, I am determined to ensure that the position of genuine claimants is protected. However, we must prevent unscrupulous claimants from abusing the system. Since coming into office 15 months ago, I myself have undertaken a major review of my Department's activities to stamp out fraud and abuse. As a result of the decisions I have taken, a total of some £30 million was saved in 1987 from measures aimed at curbing fraud and abuse. The Estimates for the current year include provision for saving a further £20 million from measures to prevent fraud, abuse and unwarranted claiming. I am confident that this target will now be exceeded. As Deputies can see, I have already taken very significant steps to eliminate the scope for fraud and abuse. I intend to take whatever other measures are necessary to tackle this problem. In so far as the consultant's reports are concerned, many of their recommendations have already been put into place.
Further recommendations are under active consideration by my Department. These include the localisation of services; client identification measures including, for instance, the possibility of each person in the State having a unique Revenue and Social Insurance (RSI) number; my Department's co-operation with the Revenue Commissioners and other agencies; the position of employers in the social insurance payments system; methods of payment and issues concerning accommodation.
I think Members of the House are in some difficulty because of the confidential nature of the report. It is not possible to find out, first, what the exact recommendations were and, secondly, whether these recommendations will ever be implemented. Given that £250,000 was spent on this consultancy report I think it is unsatisfactory that such limited knowledge of the findings is available to Deputies. Can the Minister tell me to what extent the findings of these consultants will be implemented? Does he intend implementing all of the findings, 50 per cent of the findings or whatever? In relation to the level of abuse identified by the consultants what will be the net saving to the Exchequer this year?
The consultants dealt with abuse in the Dublin area in a particular study. The figures which are given in the report which was circulated are approximately 2 per cent in unemployment assistance and in unemployment benefit and just under 1 per cent in disability benefit. There was also a 7 per cent which was questionable but when this was investigated more fully, in a special study afterwards, it was discovered that two-thirds of that figure did not constitute abuse. That meant that there was a possible 2 per cent on top of the 2 per cent which was identified which would bring it to 4 per cent as the basic figure. The extension throughout the country, if the Deputy is extrapolating from what happened in Dublin, indicates that there is a definite percentage and in terms of the total expenditure — because the total expenditure is so large — even a small percentage amounts to a large sum of money. The measures being taken are wide-ranging. There is a number of different actions in place which we have discussed in the House on a number of occasions ranging from the external control unit — which we have extended greatly — to the work of the inspectors and the social welfare officers to the joint investigation unit. These different activities have been very helpful. In addition we are tightening up on the security of the computer systems and that is adding to the savings which have taken place generally. The systems are more controlled now and within a relatively short time that work will be completed. While most previous Ministers have put effort into tackling this problem the activities going on at present are unprecedented and are widespread. That is tied in also with the development and the urgency in the computerisation, cross-checking and so on. A lot of work is being done in that area. That relates to the recommendations generally.
As the Minister has taken the view that it is not appropriate to publish the report we must try to get whatever information we can through questions. May I ask the Minister who were the population that were surveyed and how were they selected? Was the survey confined entirely to Dublin or was it countrywide? What size was the sample used from which to draw conclusions? What kind of questions were asked? When surveys of this kind are being carried out — as we know from political surveys — the way in which questions are formulated has a large bearing on the response. In relation to the statistical sampling methods which were provided for his Department by the group, did they also provide a methodology and criteria for deciding what was fraud and what was not fraud? Apart from deciding where you would select cases what criteria were used to decide this?
Some of the information is given in the summary. That survey was confined to the Dublin area and it was used as a means of building up a technique which could be used more widely for detecting fraud. Obviously, much information was gained from that. If I remember correctly, the number of people involved was about 2,000. Much time and attention was give to this statistical sample to sort out that problem. One can see from the results that clearly there was fraud and a certain suspect area and subsequently that was pursued.
The Minister is talking about getting a lot of information for the survey and obviously surveys produce a lot of information particularly when they cost nearly £250,000.
That survey did not cost that amount.
What we are concerned about is how accurate this information is. What kind of inquiries were made? What criteria have been established to define what is abuse and what is fraud? Clearly there is a very fine distinction between a person in receipt of benefit or assistance, to which they may not be entitled, but who may be in receipt of it quite innocently. How clearly identified were the criteria for identifying fraud and abuse? I am making a distinction between the two.
The cost of that survey would be very small. The total cost, to which the Deputy referred, refers to the overall purpose of the work which was spread over three years. The work started in 1986 and finished just before Christmas. Its purpose was to examine the major payment systems in the Department with a view to establishing where they were most at risk and to advise on the best and most cost effective measures to keep these risks to a minimum. That was a much broader study. The survey was relatively small to develop the sampling techniques. Basically, it was to identify cases of fraud and clear abuse. There could still be unwarranted claiming for a variety of reasons but that would not have been identified.
May I ask for brevity, please? Progress is very sluggish today.
Would the Minister not agree that in the light of savings already announced by him, in relation to fraud and abuse, the report by Craig Gardner erred extremely on the side of caution to the extent that it could almost be considered a dud report? In the light of that would he not consider seeking back from the consultants a repayment of the fee which they received in view of the fact that it totally underestimated the problem?
Fraud that can be identified specifically as fraud in the social welfare area is very small. The money saving is much wider that the fraud. That is the lesson to be learned from it. When people leave voluntarily there is no opportunity to find out why they left but so far as the budget is concerned the money is actually saved. Fraud is something you can prove and bring to court. You can bring forward a case. Fraud is a very small thing.
Provable fraud.
Provable fraud, yes——
Let me bring in Deputy Michael Bell.
——but they have left us with sampling techniques which can be very useful. As I said, it is a small part of the total operation.
Deputy Bell, and a final supplementary from Deputy Harney if she wants it.
I am aware there is a substantial increase in the numbers coming before the courts in relation to misuse and fraud. Will the Minister agree that when the investigating officers are carrying out their investigations basically the applicant is being prosecuted but employers who are giving statements in support of these prosecutions who are aware that the frauds are taking place are getting off scot-free? Does the Minister intend to deal with that subject in accordance with the Craig Gardner report?
Collusion is an important element in fraud and abuse. The expansion of the joint investigation unit is specifically for the purpose of tackling the employer side of fraud. There is a separate question here relating to 26 employers who are before the courts at present. In fairness, a balanced approach is being taken to that problem. Again we are back to the question of evidence and information. The legislation passed before Easter by the House strengthens the hands of the officers in dealing with the employers side.
From this report we seem to have the statistical formula for calculating fraud as 2 per cent of unemployment payments and 1 per cent disability.
Proven fraud.
I do not understand how you go from the statistical formula to finding the people. Maybe the Minister could help me there. Did the consultants engage a research company to interview or carry out research of social welfare recipients? If so, did they identify themselves as people carrying out a survey on behalf of the Department of Social Welfare? Sometimes recipients might be reluctant to tell what they regard as an objective consultancy firm that they are welfare recipients or they might be reluctant to be honest with them.
The cases were selected as ones that might be suspect from within the sample taken. Those cases were investigated and cross-checked within the system with other benefits. A person could be claiming two benefits, for instance, claiming for extra people, working and claiming or whatever else. They were pursued individually.
The Deputy asked about how you go from the percentage to the people. That is a very relevant question. You do not go through the consultants; you go through the administration and that is where the different measures being taken are tackling the people involved. The measures range from the external control unit to the joint investigation unit to the improved computer correlation which is throwing up people whose position would be suspect.
