34. Notwithstanding those controls, we found it astonishing
that, in such a massive programme which has been running for 10
years, no fraud has been detected. We are disturbed by the growing
evidence from this and other reports that some Northern Ireland
Departments are unacceptably lax in identifying and tackling fraud.
The Department commented that it had built up a strong system
of checks and said that 60% of Training Organisations are inspected
each year in systems audits. While we note the Department's comments,
our concerns are that:
- this is the type of scheme
- like Individual Learning Accounts - which we have seen to be
most liable to fraud
- following FAST inspections, recoveries of some
£566,000 have been made from Training Organisations, in respect
of so called 'incorrect, ineligible, or unsubstantiated' claims
- in a special exercise in 2000, the level of adjustment
to claims following administrative checks equated to a sum of
£1.3 million for the year as a whole.
Surprisingly, the Department has deemed all cases
of incorrect, ineligible and unsubstantiated claims to be due
to error. None were considered to have been attempted fraud. Based
on our experience of other, similar schemes, we are not at all
35. Our concerns are heightened by the case highlighted
in the C&AG's Report where information provided by a number
of trainees on their attendance conflicted with records held at
the organisation. It appeared that payments had been claimed for
periods when trainees were not actually engaged in training. Despite
suspecting fraud in this case, the Department allowed this organisation
to continue operating under the programme. Indeed, it even re-accredited
the organisation under its quality system while the police investigation
was in progress. In our opinion, the Department's actions were
poorly judged. Where we would have expected it take a firm line,
it seems to us that the Department chose to turn a 'blind eye'.
Based on the evidence, we are in no doubt that the organisation
involved should not have been allowed to continue operating within
the programme. This would have sent a clear signal to other organisations
that improper claims will not be tolerated.
36. Shortly before our examination of Jobskills,
both the Department and this Committee received allegations, from
a former employee of the programme, of a fraud having been perpetrated
at a Training Organisation. We note that, following a preliminary
investigation, the Department has referred the case to the police.
This is in keeping with best practice and we would ask the C&AG
to monitor developments in this case. Should it transpire that
a fraud has been committed, we expect the Department to take strong
37. Overall, it is our view that the Department's
checking procedures are not detecting irregularities in the programme.
It must reconsider whether its checks are sufficiently rigorous
and how they could reasonably be strengthened.