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Report highlights ‘internal control weaknesses’ over Covid unemployment payouts

A series of administrative blunders resulted in more than $3 million in unemployment benefit being paid out to people who were working, according to a bipartisan report.

The Public Accounts Committee noted that there were “internal control weaknesses” and poor vetting procedures when the payments were made following the outbreak of Covid-19 in March 2020.

More than 10,000 people lost their jobs after the island went into lockdown when the first cases of the virus were recorded. As an emergency measure, the Government paid out $500 a week to those made redundant by the pandemic, for a maximum of 12 weeks.

The emergency relief scheme ended up costing the taxpayer $60 million, including $3.5 million in overpayments.

The Public Accounts Committee, chaired by Cole Simons, the Opposition Leader, based its findings on reports filed by the Auditor-General. The committee also interviewed several civil servants from the Ministries of Finance and Labour.

However, the committee was unable to obtain a report compiled by PricewaterhouseCoopers after the accountancy firm carried out its own review of procedures.

The report stated: “Due to the urgent need to provide relief to persons suffering economic hardship, the Ministry of Finance accepted the risk and made the decision to commence processing, approval, and payment of the UEB despite internal control weaknesses.

“In fact, it was later revealed that a number of overpayments occurred, mainly because applicants had subsequently found employment and did not report their new employment status.”

The committee noted that some claimant files were incomplete and there was no evidence to show that a contract to provide an unemployment database was put out to tender.

The report went on: “The Ministry of Finance didn’t delegate authority or provide any legislated instrument which authorised the Minister of Finance to delegate authority to execute his powers or furnish finance officers the authorisation to execute making unemployment benefit payments.

“The Ministry of Finance was unable to produce formal procedures on payment instructions and the PAC was unable to confirm the number of times the Ministry of Finance directed sums of money to be paid to individuals with or without consulting the Director of Workforce Development.

“It was determined that the application vetting process was not robust and led to numerous payment errors, duplicate payments and delays.

“The PAC has requested but has not received a report which summarises the number of UEB applications retroactively validated and the number of and value of the errors uncovered and rectified from March 2020 to June 2022.

“There was also evidence that there were inadequate protocols in place which would have prevented double dipping, in cases where some UEB recipients also received Financial Assistance benefits.”

The committee recommended that the Ministry of Finance should devise detailed procedures and structures for unemployment benefit payment, and “more robust” information technology servers were needed throughout government.

The report added: “There should be defined procedures in place to ensure that there is no overlap between the UEB payments and Financial Assistance payments.

“There should be clearly established procedures and protocols in place to recover all Unemployment Benefit overpayments.”

By July 2021 the Government had recovered around $500,000 of the $3.5 million in overpayments, but it is not known if additional monies have been collected since the.

David Burt, the Premier and minister of finance, did not respond to question by press time.

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Published February 08, 2023 at 7:59 am (Updated February 08, 2023 at 7:59 am)

Report highlights ‘internal control weaknesses’ over Covid unemployment payouts

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