No Smoking gun at A4e……

The audits for the Work programme, the new enterprise allowance programme and mandatory work activity are now complete. They have found no evidence of fraud in any of these contracts.

However, the department seems to have more questions to answer…..

The background
Over the last five years A4e has been the largest provider of employment services to DWP. At the end of April 2012, DWP had 12 major contracts with A4e with an average annual value of £78.3 million.

The Chair of the of Public Accounts’ Committee received allegations concerning A4e ranging from fraud to poor quality of service. The Chair of the Committee was sent a copy of an A4e internal audit report. The Chair passed 25 allegations and a copy of the internal audit report to the Department for investigation.

The key report findings are as follows;
Between April 2006 and March 2012, the Department’s internal audit and investigations team accepted 10 allegations of fraud and improper claims by A4e for investigation.

9 investigations into A4e have been concluded, and evidence to support allegations was found in 5 cases of which there was a total identified loss of £67,993, of which £61,897 was directly attributable to inappropriate activity. The full amount was recovered. One case is on-going.

There seems to be a systematic failing on the part of DWP:
The Department’s past assessment of the risk of fraud at A4e missed vital evidence. A4e’s controls were examined by the Department’s provider assurance team in an inspection that concluded in May 2011 before the Work Programme and Mandatory Work Activity contracts were let.

The team did not request relevant internal audit reports including the A4e internal audit paper later passed to the chair of the Committee of Public Accounts, setting out evidence of nine possible cases of fraud and seven of improper practice by A4e’s staff

Providers need to ensure that standards are clearly set out;

Service users cannot judge whether they are getting the level of service the Department intends because standards are not set out in one place. The Department should require Work Programme providers to set out clearly in a single place all the standards of behaviour and service users can expect.

The Department has work to do… in its recommendations the NAO notes that;

The capability of the provider assurance team should be further strengthened. Their expertise should be increased by training in fraud awareness and more advanced assurance techniques such as the assessment of the degree that they can rely on the provider’s internal audit and other control function or when substantive testing is required.

See the Ministerial statement

See A4e’s contracts

NOTES
1 The contract values are estimated as they depend on the number of outcomes achieved.
2 A4e also has New Enterprise Allowance contracts

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It is important to note that the Department is currently carrying out its own examination of the controls operated by A4e and of the allegations passed to the Department by the Chair of the Committee of Public Accounts. The Department will report the results of this separately to the Committee.