Nine Queensland Government departments do not have anti-fraud plans, 11 departments do not have key anti-fraud measures, up to 17,000 public servants can authorise expenditure “without a second set of eyes” and there is virtually no fraud training on offer.
These are among the findings of a damning Auditor-General Department’s review tabled in Parliament on Thursday into the financial risk to Queensland Government departments and agencies.
Premier Campbell Newman backed the findings.
“The report shows that thanks to Labor’s appalling mismanagement of Queensland, the Government has become vulnerable to the risk of fraud,” Mr Newman said.
“I have been saying for some time that Labor left the state in not only a bad financial position, but an appalling organisational position also.
“We have put ministers back in charge of their own departments so that accountability can be restored and we can sort out the mess left by Labor.”
The Labor government was embarrassed in December 2011 when Queensland Health employee Joel Barlow was arrested and charged on allegations that he had embezzled more than $16 million from Queensland Health.
The allegations include that Mr Barlow defrauded the department of $4 million earmarked for community health grants under the “Healthy Initiatives and Choices”, which he managed.
Last week, the Queensland Audit Office issued a report on the “Internal Control Systems” of government departments before and after the election.
Auditor-General Andrew Greaves warns the changes to the Queensland Government public service structure has left some departments wide open to fraud.
Mr Greaves says some steps have been taken to tighten anti-fraud measures since the December 2011 alleged fraud, but his report is scathing of departments’ finance systems.
His major findings are:Nine of the 13 departments did not have fraud control plans to identify the key risks that needed to be monitored on an ongoing basis;Seven of the 13 departments had not provided guidance to employees on procurement methods to be used to minimise fraud for the various types of expenses;About 17,000 departmental staff have a power of financial delegation, with between 4 per cent and 48 per cent of staff within individual departments having a financial delegation;Nine of the 13 departments did not perform detailed analytical review or data mining procedures to highlight irregular or unusual transactions; and11 departments did not have two of the six steps necessary to cut financial fraud.
The report highlights the constant changes of staff has weakened the ability to combat fraud.
“Internal control structures within departments have recently been experiencing increased stress due to transfers of functions and staff both within departments, and as part of machinery of government changes,” the report says.
“The loss of experienced and key staff through voluntary separation programs, and the need to do more with less as required by budget savings.”
In this case Queensland Audit Office report finds: “Our assessment of the effectiveness of entity fraud prevention strategies identified 11 departments as not having at least two of the six basic elements operating at a level to minimise the risk of fraud occurring.”
Jon Grayson, the director-general of the Department of Premier and Cabinet on June 19, 2012, said the report was “timely”.
Mr Grayson writes in the report’s appendix that a “training package” for all departments has been “facilitated by Queensland Treasury and will be released at the end of June 2012”.
He says a better “procurement and risk matrix” model should be ready by June 2012.
He also says all departments will run an “assurance audit” of all fraud and corruption controls by June 30.
Helen Gluer, Queensland’s Under-Treasurer, said fraud and corruption audits based on guidelines from the Crime and Misconduct Commission had already begun.
“While it is disappointing that this work has not been acknowledged in this report, the need for continuous review of internal controls is supported,” she wrote.
Ms Gluer also warns the latest round of public service changes means the government is also open to fraudsters.
“The resultant movement of staff to sometimes unfamiliar systems and the loss of corporate knowledge could result in an weakened internal control environment until the new arrangements are bedded down” she said.
This story Administrator ready to work first appeared on Nanjing Night Net.