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Auditor urges Government to recover benefit overpayments

Serious concerns: Heather Thomas, the Auditor-General

The Government must improve administrative procedures to prevent overpayments of emergency unemployment benefits, the Auditor-General has said.

And efforts should be made to recover $3.5 million in estimated overpayments to ensure that the “integrity of the Government unemployment assistance programme” is maintained, she said in a report to the House of Assembly.

The Government paid out more than $60 million in unemployment benefits to 10,400 workers made redundant as a result of the coronavirus pandemic, which struck the island in March, 2020.

In a review of those payouts, Heather Thomas questioned why “blanket” approval to claims was granted after the island was first hit by the pandemic.

But she also acknowledged that the Government acted during a time of “financial emergency”, and that it’s decisions were neither “uncommon or inappropriate”.

More than 10,000 people were put out of work after the first case of Covid-19 was recorded in Bermuda in March 2020, forcing the island into lockdown for three months.

Within days, under a state of emergency, the Government set up a task force to provide financial support to those who had lost their jobs. Recipients out of work were paid up to $500 per week, with the first payments being made at the beginning of April.

In July, Curtis Dickinson, the finance minister, admitted that Government overpaid $3.5 million in unemployment benefits during the Covid-19 lockdowns.

Mr Dickinson said about 2,500 people – or one in four of those who received the benefit – were overpaid an average of $1,300 because they did not inform government when they returned to work and continued to receive the money.

Of that total, just 300 people had repaid $500,000. Laws passed in July allowed the Government to deduct repayments from future benefit payments instead of pursuing people through the courts.

In her analysis, Ms Thomas said that up to six per cent of applicants may have been ineligible for the payout.

In addition, she said as many as 15 per cent of applicants may have been overpaid.

The document, titled Government of Bermuda’s Response to Covid-19: The Unemployment Benefit Administration, reads: “Several control weaknesses were identified.”

As a result of the ‘blanket’ approval that had been given by the Minister of Finance resulting in the expediting of payments, the Office of the Auditor-General’s review of the unemployment benefit data began with the understanding that the data might not be complete, accurate or reliable.

“It was also understood that a significant percentage of the applications submitted may not have been properly reviewed prior to the processing of payment which could have resulted in some persons who were not eligible to receive payment receiving such payment, or persons receiving incorrect payment amounts.”

In her conclusion, Ms Thomas said that, in Government’s rush to ensure that workers made redundant received benefits received payments as soon as possible, “mistakes were made and opportunities were present for abuse as processes, criteria, needs and controls were not necessarily considered or implemented”.

She added: “The examination also identified a number of areas where internal controls for recording and reconciliation of processed payments can be strengthened.

“Recovery of overpayments and other improper payments should be addressed as this will assist in ensuring that the integrity of the Government unemployment assistance programme is maintained. Using an integrated system that accurately collects, stores, manages and interprets data in real time, the Government may then be better prepared in a similar situation.”

She said such integrated systems should reduce the risk of errors and omissions that happen when “manual intervention occurs between more than one stand-alone system”.

She added: “Additionally, the Ministry of Finance/Department of Workforce Development should design and develop detailed Standard Operating Procedures, which can be implemented for the remainder of the Covid-19 unemployment benefit programme, as well as any other similar programme that the Government may undertake.

“These SOPs will help to ensure that employees will be able to carry out tasks correctly and consistently and reduce variation within a given process. Properly designed operating procedures will also assist in enhancing accountability and transparency with respect to the use of public funds.”

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Published November 15, 2021 at 7:57 am (Updated November 15, 2021 at 7:39 am)

Auditor urges Government to recover benefit overpayments

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