An NDIS executive says fraud is happening on a malicious scale but admits the bloated Federal Government agency doesn’t have a way of collecting proper statistics on identity theft and false claims despite $5 billion being stolen from taxpayers.
John Dardo, a National Disability Insurance Scheme deputy chief executive in charge of integrity transformation and technology services, told a joint parliamentary committee on Thursday that 2500 Australian business numbers were associated with fraudulent disability service providers.
“There are some other measures that help you understand the scale of the maliciousness,” he said.
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“We’ve identified over 2500 ABNs, providers where we have made decisions to put payment holds on them until they evidence every single claim.”
In these circumstances, the NDIS does an audit of the claims, he told the joint committee on public accounts and audit.
“So, instead of paying their claims automatically, we’ve put a mechanism in place which didn’t exist at scale years ago; we’ve built that in the last two years, and it allows us to say, ‘For that provider when they come in, we do not pay automatically’,” Mr Dardo said.
“For those 2500 providers, the vast majority have ceased claiming and will never claim again.
“A number of them, we’ve sent off for prosecutions, executed warrants and prosecutions and those 2500 providers historically between them have claimed over $5 billion.
“We can’t say all of that was pure fraud but what we can say is that frankly we should never have paid those low-quality, in many cases, quite deliberately manipulative providers that money.”
But admitted the NDIS was unable to provide a breakdown of the 8 per cent of claims deemed to be non-compliant.
“That 8 per cent, it would be impossible to tell you how much of that is deliberate, significant organised crime versus how much of that would be opportunistic or simple error,” he said.
Mr Dardo also admitted that beyond asking providers if they have delivered a service, it wasn’t unable to say what proportion of money was being spent on pretend disability participants.
“What we cannot statistically calculate yet and include in the measure as a metric that would apply to the whole scheme spent, is where somebody’s identity has been stolen and been used to create a false identity to claim,” he said.
“Or where somebody has falsified their evidence to get into the scheme, so they’ve turned up with fake evidence to get into the scheme and then claimed against the scheme.
“Or where there is significant organised collusion – what I mean by that is, you go and test with a participant they’ve received the service and they say ‘Yes’.”
He clarified that providers were issuing duplicate invoices and claiming incorrect hours, making it hard to quantify the error rate of NDIS claims.
“I think what we can classify as the error type, the intent behind it, and trying to break down that and apply that statistically to all of the claims is a very difficult thing to do,” Mr Dardo said.
Auditor-General Caralee McLeish said soaring demand for the NDIS meant there was an increased risk of fraud.
“Demand has grown more rapidly than initially anticipated and administrative systems and oversight mechanisms had to develop to address this,” she told senators on Thursday.
“In such circumstances, gaps in control frameworks and implementation can arise increasing exposure, risk of inefficiency, fraud and poor outcomes.”
Executives from the NDIS and the National Disability Insurance Agency which administers it appeared before a Senate committee a day after Health Minister Mark Butler announced eligibility criteria would be tightened so the number of recipients would fall from 760,000 now to 600,000 by 2030.
