Old age pension system still vulnerable to fraud – AG report

A year after a multi-million-dollar pension book fraud at the Ministry of Human Services and Social Security, the ministry was yet to take control of the software used to print pension books, according to the 2011 Report of the Auditor General.

It also has not taken responsibility for the collection of pension books or the disposal of spoilt pension books.

“The contract entered into by the ministry for the printing of coupons was deficient since clauses such as duration of contract, remedies for breach of contract, ownership and control of printing software, minimum security standards required at the printing facility and responsibility for the disposal of spoilt coupons were not included,” the report said. Since the engagement with the Office of the Auditor General, the ministry has said that the contract for the supply of pension books for 2013 has been corrected.

However, the Auditor General’s Report points to several other vulnerabilities in the administration of the country’s Old Age Pensions, which it says are yet to be corrected following its assessment that the system administered by the ministry “did not allow for the prevention and detection of manipulation or fraud.”

High on the list of additional concerns expressed in the 2011 report by the Auditor General is the fact that the Old Age Pensions database, widely regarded as being key to the 2010 multi-million-dollar scam “was still not updated on a regular basis [with] new applicants and [to remove] pensioners who had died.” Additionally, the Auditor General’s report noted that while the pension books were numbered those numbers were still not being entered into the database as a means of tracking the allocation of books and accompanying coupons to pensioners.

In response to the Auditor General’s query regarding the irregular updating of the database, the ministry said the efficiency of this exercise is hampered by the fact that death return reports are only received from the General Registrar Office once every three months. With regard to the entry of pension book numbers into the ministry’s database, it said this exercise had been affected by “a shortage of data entry clerks”.

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