The Ministry of Social Development needs to improve its use of data matching and upgrade its case management system to adequately address benefit fraud, according to a report released today by the Auditor-General.
The Ministry was planning to review its data-matching at the time of the audit, the report says, but does not do this type of evaluation routinely.
"In our view, the ministry should be evaluating its data-matching activities periodically to ensure that these activities continue to be effective in detecting benefit fraud," it says. "There is also potential for the work of the newly established Intelligence Unit to assist in ensuring that data-matching activities take account of emerging fraud risks." It says the sharing of information is well controlled, but the there is potential for the ministry to use its Intelligence Unit's data analysis and statistical modelling capabilities to help ensure detection programmes are effectively targeting high-risk benefit types and groups. The audit also found the ministry's computerised case management system, called TRACE and used for recording and tracking allegations and investigations, needs a significant upgrade. "In our view, upgrading TRACE would improve the productivity of investigators when they are managing investigations. We also consider that changes to the system's design and functionality would improve the ministry's ability to systematically analyse investigation records to identify causes of benefit fraud and emerging risks or trends." Among the Auditor-General's recommendations for better fraud detection are: that the ministry regularly and formally evaluate the effectiveness of its data-matching activities for detecting benefit fraud; use fraud risk assessments of emerging benefit fraud risks to help evaluate and target its data-matching activities; and use its Intelligence Unit to periodically analyse its client databases to ensure that detection programmes are targeting areas of risk. The report reveals the number of records compared with other agencies has grown by about a third in the past three years. In the 2005 year, 9.1 million records were matched. By 2007, that had grown to 12 million. However, that extra effort did not detect more cases of overpayment or a greater value of overpayments. In fact, substantiated overpayment incidents fell from 25,483 in 2005 to 18,588 in 2007.