Latest Public Sector News

28.09.12

£1bn of welfare-to-work schemes at risk of fraud

The Department of Work and Pensions (DWP) has failed to ensure the security of money meant for welfare to work schemes, the Commons public accounts committee has reported.

The committee found £1bn of schemes were open to fraud and the internal audit also highlighted potential reputational risk or suspected rule breaking by staff where public money was claimed for placing long-term unemployed people into work.

Arrangements for inspecting contractors were described as “weak”, which meant evidence on improper practice and potential fraud was not investigated. The audit was launched following allegations from whistleblowers.

Margaret Hodge said: “The department failed to obtain from A4e damning internal audit reports produced in 2009 which pointed to instances of potential fraud and malpractice across the country. If it had not been for whistleblowers, a range of systemic issues would not have been identified. The department might have identified these issues if it had asked the right questions of providers.”

Richard Bacon, the Conservative MP for South Norfolk and a committee member, added: “It’s hardly surprising that this vague and hazy approach to financial control and oversight has produced so many questions over proper governance, audit and transparency.”

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