Staff 'in scams to gain bonuses'
15 September 2005
By PAUL GORMAN
Frontline
Work and Income staff took part in widespread, targeted fraud to secure
pay rises and bonuses, a former staff member alleges.
The
accusations are being levelled by former Ministry of Social Development
(MSD) internal auditor and now whistleblower Graeme Wislang, who left
the ministry in October 2003.
Documents
released to Wislang under the Official Information Act (OIA) through
the Ombudsmen's Office support his claims and reveal concerns from Work
and Income employees about the apparent manipulation of databases to
qualify for pay rises and bonuses.
The thresholds for the rewards were set by key performance
indicators (KPIs).
Scams
included creating vacancies and claiming clients had filled them when
they had in fact found their own work, changing the ethnicity of
clients to Maori or Pacific Islander to gain extra KPI credits, and
retrospectively offering grants or subsidies to employers to enable a
vacancy to be added to the database.
Wislang
said that as an internal auditor he had talked to many frontline
employees who participated in, or at least knew of, KPI fraud.
"Hundreds" of staff members were involved in the scams, he said.
One
of the documents released under the OIA is a May 2003 email from a
staff trainer, who says KPI fraud "is an ongoing problem".
"In
many instances, staff create a vacancy to place that client into work
rather than self-place and receive no credit or KPI – this is
widespread and not at the lower end of occurrence," the trainer said.
"Other
issues revolve around changing client records to obtain KPIs, such as
changing ethnicity to gain KPIs for Maori and Pacific Island clients
when the client is not either.
"Lastly, I am concerned that we often purchase KPIs by paying
taxpayer money in the form of subsidies and grants.
"I
see all above examples as fraud, as the main reason staff do this is to
obtain a pay rise or bonus, and many staff feel trapped into doing
these things as their performance is measured against those that cheat
to obtain their outcomes."
Another
email, from July 2003, said: "Brokers have been setting up false
vacancies, with several agencies stating approval has been given by
region to create false vacancies for previous referrals.
"I
think this in itself is suspect, unless we have a clear process in
place. This practice also puts me at unfair disadvantage when measuring
my performance.
"There
have been lots of these non-vacancies filled this month by referring
suspended clients. If I could do that here ... I too would achieve
great results."
Work
and Income is brushing off the allegations of staff fraud, saying it
investigated them about two years ago and found no evidence to support
claims by concerned staff.
Work
and Income head Ray Smith told The Press the inquiry found problems
with the computer system were to blame for the apparent creation of
extra job placements and changes in ethnicity.
"We
found no evidence to substantiate the claims. We honestly haven't. What
we did find was that there were some issues with the system," he said.
"If
they (staff) entered something in error, they couldn't go back and
change it. On the face of it, what might look like someone doing
something deliberately, wasn't. We did rectify it.
"If they were (changing the database), I'd be really
disappointed and would want to take the appropriate action."
Smith said job placement had been only one of about 16 key
staff measures and was not used now.
National
welfare spokeswoman Judith Collins last night called for an external
inquiry into the allegations, saying "another internal inquiry from
Winz to investigate Winz" was not needed.
The allegations should be referred to the police or the
Serious Fraud Office, she said.
"If
National leads the government after Saturday, I can promise the first
thing on my agenda will be to get to the bottom of this," Collins said.
A
spokeswoman for Social Development Minister Steve Maharey said the
matter was operational and not an issue for Maharey to comment on.
About
3000 Work and Income staff shared $6 million of performance bonuses
last year. The total was 8 per cent more than amounts paid the previous
year.
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