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Government rebates paid to dead people

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A leaked document that was the basis of a ministerial briefing shows State Government-funded concessions and rebates were paid to dead people.

The concessions were among those paid and then claimed back by 14 energy companies, SA Water and more than 60 local councils.

The document, a business case to fix the beleaguered multi-layered system of paying seven types of concessions and rebates, has been verified as genuine by the Minister for Community Services Tony Piccolo’s office.

It lists failures within the Concessions and Remittance Tracking System (CARTS), including the statement that “a disproportionate number of clients (708) are aged 112 years old”.

“Given there are only seven clients aged 111 and seven clients aged 113, this seems unreliable data,” the document states.

Official records, however, show that Australia’s oldest person is 112 and lives in Sydney.

The leaked document also details massive data mismatches in the concessions tracking system after a cross check of 390,240 claimants of concessions for water, energy, transport, rates and seniors cards.

The cross check revealed 96,312 records were invalid and 42,591 claimants were deceased.

The document states that most records for energy providers are out of date with the system unable to track when a customer churns to a new retailer.

The records were so hopelessly inaccurate that the document admits “when compared against Australian Bureau of Statistics data, there are approximately 3,500 people more in CARTS than the population by age”.

It then states that “updating from Deaths, Births and Marriages may identify more deceased customers”.

The report also identifies, but cannot quantify, overpayment of funds to energy retailers after it identified 5000 invalid National Meter Identification numbers (NMI’s).

“Mismatched NMIs make it very difficult to reconcile accounts with energy vendors,” it says.

It notes that on March 4 last year a list of 941 duplicate clients was sent to AGL for its investigation.

In a separate note attached to the leaked document, a departmental insider told InDaily the problems have not been fixed and and “”we have no way of reconciling the millions we pay to them with our records”.

InDaily’s reports identifying the failure of the concessions technology report are only the tip of the iceberg,” it says.

“The new computer system ran into problems because the data from the existing system was found to be totally corrupted making it impossible to determine if all the payments to the energy, water and councils over the last five years were justifiable based on the various concessions rules.”

The note says staff have not been given the right tools to check concessions applicants or “the power companies who have the authority to invoice us for people they claim are receiving a discounted bill”.

As InDaily first reported in July last year, the State Government has not been able to put a figure on just how much of the $600 million paid out in the last five years has gone to ineligible or non-existent claimants.

Another leaked document we reported in September 2013 claimed more than one in five households receiving taxpayer-funded concessions on energy, council and water bills were ineligible.

That document, an analysis by IT consultant David Tebbutt which tested the eligibility of 174,306 concession claims on energy bills, stated that “50,141 have data integrity issues”.

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 latest leaked document, prepared by departmental project manager David Stepan and approved by a Department of Community Services and Social Inclusion (DCSI) Executive Director, shows why the system used by the State Government to administer more than $600 million worth of concessions in the last five years is flawed.

Failed attempts to fix the database 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”.

Staff inside DCSI have been passing information and documents to InDaily over the last seven months months.

“Staff at DCSI began to see (the) nightmares and disappointments by the total mismanagement of the concessions system,” they said.

The staff members said attempts to recover the overpaid concessions from eight energy companies and SA Water have failed.

The State Government’s exposure started to be revealed when InDaily revealed last July that 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, later revealed the extent of the “real disaster” that he said “would be an enormous catastrophe for the taxpayer” if it’s not addressed.

“It will end in disaster,” he told InDaily.

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, which has also passed.

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