asked the Minister for Finance if he will outline the improvements which have been made on the internal control procedures for the prevention of and protection against irregularities in VAT repayments, particularly in respect of a number of serious irregularities involving the fraudulent claiming of VAT repayments which occurred in 1985 in the Office of the Revenue Commissioners which resulted in internal fraud and involved the raising of automatic repayments from £500 to £6,000 per two monthly period and unquantified sums of money; if he will make a statement on the total amounts involved, and the steps taken to effect recovery.
Written Answers. - Irregularities in VAT Repayments.
40.
Claims to repayments of VAT were made purporting to come from businesses which were found in the event not to exist. A rigorous and detailed vetting procedure is now in place to establish that a bone fide trade exists when VAT registration is applied for. This has involved redeployment of six officers from outdoor work to the surveillance of registrations.
New arrangements have been put in place in connection with the issue and use of "badges" (plastic cards security coded) which authorise VAT officers with appropriate authorities to input and-or view information depending on an officer's responsibilities. The passwords for badges are now issued by the district inspector or other appointed officer and are subject to being revised monthy, so that the password for a badge is known only to local management and the officer concerned.
The data input is being monitored by sampling all types of transactions from computer edit lists. The new arrangements enable transactions to be traced to the individual responsible for the input badge used. The edit lists will be retained for a number of years to provide a record of all computer transactions.
A total of £18,034.50 was fraudulently obtained by the officers concerned. Of this, £11,158.41 was recovered leaving a balance of £6,876.09 outstanding. Credit balances in bank accounts used in connection with the fraud by the four officers convicted amounted to £243.93 only.
The four officers concerned were convicted on the charges and they were dismissed by the Government.
A further sum of £498.45 was also identified as having been fraudulently obtained but no person has been made amenable for this crime.