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NIS at risk of failing, fraud; billions issued in overpayments, millions unaccounted for – Auditor General

Published:Wednesday | January 13, 2016 | 1:30 AM
The Auditor General says about $5.3 million or 50 per cent of the overpayments, were made to people who were not eligible for a pension benefit.

The government's multibillion-dollar National Insurance Scheme (NIS) is at risk of failing because of poor governance, which has contributed to the disbursement of billions in payments to ineligible people. 

The Auditor General made the disclosure in an activity-based audit that was tabled yesterday in the House of Representatives. 

 

Jovan Johnson reports.

In her report, Munroe Ellis said for the five-year period, 2010-2015, the Labour and Social Security Ministry, which manages the NIS, paid $32.5 billion to the Post and Telecommunications Department to facilitate the encashment of pension cheques, without checking to see if the right people were getting the money.  

She says her office has been unable to determine the accuracy and conditions under which the ministry paid over about $240 million in service charges as the ministry did not carry out the required reconciliations or present any formal contract.

Meanwhile, because of alleged poor due diligence, the Labour and Social Security Ministry overpaid 152 pensioners by more than $10 million. 

The Auditor General says about $5.3 million or 50 per cent of the overpayments, were made to people who were not eligible for a pension benefit. 

In the meantime, the ministry is being accused of failing to account for 334 pension vouchers valued at $1.3 million. 

According to the Auditor General, the NIS is exposed to a high risk of errors and irregularities. 

She says the situation is made worse because despite being confronted by fraudulent practices in previous years, the ministry has not implemented strategies to protect the pension process from fraudsters. 

The Ministry has also reportedly ignored the findings of its own internal audit unit, resulting in weak systems of control. 

The Ministry of Labour and Social Security pays pension benefits of over $14 billion to over 109,090 persons annually.