Select Committee on Public Accounts Tenth Report


4  Financial monitoring and control

32. The main financial risks associated with Jobskills are that payments will be made for trainees who are not in attendance on the programme, or for trainees who have not obtained their qualification or achieved their sustained employment outcome. The Department's control framework includes a system of administrative and claims checking procedures, together with post-payment inspections at Training Organisations, carried out by the Department's 'Financial Audit and Support Team' (FAST). FAST inspects some 3% of programme expenditure each year, on a sample basis.[30]

Payment Controls

33. Given the risks of improper payment, we asked the Department how it verified trainee attendance, achievement of qualifications and the date of a trainee's departure from the programme. We note the Accounting Officer's assurance that the Department has robust systems of control in place. As well as a range of monitoring returns and reports, it also requires sight of qualifications and carries out checks with employers.[31]

Fraud

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:

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 convinced.[32]

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.[33]

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 action.[34]

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.


30   C&AG's Report, paras 5.2-5.3, 5.20 Back

31   Qq 75-77 Back

32   Qq 13-18, 80; C&AG's Report, para 5.19; 3rd Report from the Committee of Public Accounts, The Sheep Annual Premium Scheme (HC 64, Session 2003-04) Back

33   Qq 13-14; C&AG's Report, para 5.21 Back

34   Qq 13-14 Back


 
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