One in five receiving concessions “ineligible”
More than one in five households receiving taxpayer-funded concessions on energy, council and water bills are ineligible, a leaked State Government report claims.
Internal government documents obtained by InDaily confirm previous reports that the administration of State Government concessions on household bills is a “looming catastrophe for taxpayers”.
If the report’s estimate is correct, the overpayment of concessions amounts to more than $120 million over five years.
The office of the minister responsible for the concessions scheme, Tony Piccolo, moved today to downplay the report, describing it as a “discussion paper”.
The documents include analysis by IT consultant David Tebbutt which tested the eligibility of 174,306 concession claims on energy bills by matching claimants with Centrelink’s database.
Tebbutt’s report states that “of these, 50,141 have data integrity issues”.
“An additional 28,129 recipients of a concession cannot be matched with the records that we have in CASIS (the concessions database) for an energy concession due to failure to match their account number and name,” the report says.
After accounting for administrative duplication the report concluded: “We therefore have 36,973 records that form the true Net Variance of being paid versus any form of eligibility.
“This assumes that there may well be duplicates and recipients that have not been ‘switched off’ correctly during churn and results in 21 per cent of recipients!”
The report suggests further meetings with energy suppliers “to resolve differences in data” and proposes a similar exercise to establish the extent of the problem in other billing systems such as SA Water and councils.
"More than $600 million worth of concessions paid in the last five years have been based on flawed computer systems which the Department of Communities and Social Inclusion (DCSI) has spent five years trying to fix – a project initiated in 2008 by then-Minister for Families and Communities Jay Weatherill."
Failed attempts to fix the over-payments have attracted the ongoing attention of the Auditor-General who warned in successive annual reports that he had “again found the Department was unable to confirm that concessions provided by SA Water, Revenue SA and energy providers were complete and made only to valid eligible customers.”
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A State Government spokesman confirmed the validity of the leaked documents and claimed the issues raised are being fixed.
“This discussion paper referred to was emailed to DCSI (the Department of Communities and Social Inclusion) on May 24, 2013, and is now well out of date,” the spokesman said.
“As previously advised, the Department is currently following up discrepancies with concession partners.
“The presentation referred to was made before the Department began the process known as ‘data cleansing’ with concession partners.
“The data cleansing process is designed to verify the eligibility of payments and the integrity of the data to be entered into the new system.
“The question of eligibility may have been raised due to issues with the original data (eg the name entered was mis-spelled, the incorrect address or date of birth was entered), and does not mean the recipient was not eligible for a concession payment.
“Through the data cleansing process, many of these payments have since been confirmed as valid.
“The number of payments still to be verified is now considerably less than stated in that presentation, and DCSI is continuing to work through the data cleansing process.”
The official response is, however, at odds with the views of staff inside DCSI who have been passing information to InDaily over the last two months.
“Staff at DCSI began to see (the) nightmares and disappointments by the total mismanagement of the concessions system,” they said in an attachment to the latest set of leaked documents.
“(DCSI) ignored the ongoing recommendations by operational staff for years and finally got upset and started to complain.”
The staff members said attempts to recover the overpaid concessions from eight energy companies and SA Water have failed.
The State Government has previously stated that it would recover any over-paid concessions from the supplier.
“Any incorrect payments made by concession partners to ineligible clients will be recouped by DCSI from the partners,” a DCSI spokesman told InDaily last month..
“It will be up to the relevant retailer to determine if they recoup that from the client.”
On the basis of the leaked document’s estimate of 21 per cent ineligibility, the over-payments amount to $126 million over the last five years – $28.8 million in the 2012 financial year.
In July InDaily revealed the interstate company first hired to fix the database problems, Endpoint Pty Ltd, had gone into liquidation.
One of Endpoint’s former directors and one-third shareholder, Wolfgang Schumacher, revealed the extent of the “real disaster” that he said “would be an enormous catastrophe for the taxpayer” if it’s not addressed.
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“It will end in disaster,” he told InDaily in an exclusive interview.
“The Concessions and Seniors Information System (CASIS) project has been hampered from the beginning because the department didn’t draw up a ‘requirements document’, so there’s nothing to measure progress against.
“It’s like going to a car yard and asking for a car, wanting a VW and then having a Bedford truck delivered.
“This project has been wandering along, out of control for some time.
"“The bureaucrats keep telling the Minister there’s no problem, but there is."
“It’s been estimated by the software designers that around $50 million has been paid in concessions to ineligible recipients.”
Last financial year the DCSI administered $138 million worth of concessions for water, sewer and council rates, electricity, transport charges and various levies.
Concessions on SA Water bills totalled $35 million, council rates $32 million, energy bills $30 million, transport services $31 million and other charges $8 million.
In the five years since the eligibility issues were first raised by the Auditor-General, concessions administered by DCSI have totalled more than $600 million.
“Over a number of years audit reviews of the administration of concessions payments have highlighted areas where controls could be improved,” the Auditor-General wrote in 2008.
In 2009 the department said it had the problem in hand and would fix it that year.
Four years and several million dollars in payments to IT consultants later, the problem remains.
In 2011 the Auditor-General repeated the concerns he had with the ongoing deficiencies in the system and the delays in fixing them.
He also raised a separate problem relating to electricity and gas bills.
“The Department has not adjusted the Energy Concessions Scheme for increases in electricity concessions as at July 2010 and July 2011.
“As a result, energy concessions provided by electricity entities do not match those set out in the scheme.”
An audit review in 2011-12 “again found the Department was unable to confirm the concessions provided by service providers (SA Water, Revenue SA and energy providers) were complete and made only to eligible customers”.
The department promised to fix the problem by April 2013, a deadline it has already missed and pushed out to December.
It also said it would “develop an internal audit plan to ensure only eligible customers receive concessions”.
InDaily has asked DCSI for a progress report on that plan.
“In response to the internal audit, a new process was introduced in July 2013,” the department said.
“As part of the audit program, the Auditor-General has requested further information on the project and the department is responding.”
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