WINZ unit fails to stop staff fraud

Last updated 05:00 02/04/2011

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An internal fraud unit at Work and Income was not able to prevent 13 cases of staff theft in the past five years, involving sums totalling more than $180,000.

Since 2006, a dozen employees of the Social Development Ministry have either lied to procure welfare payments or deliberately defrauded the system from within, documents disclosed to The Dominion Post under the Official Information Act show.

Nine of the cases involved internal fraud, where a staff member rorted the system to gain extra cash, and four involved benefit fraud. Two were perpetrated by former case manager Letitia Proctor, 23, who was found guilty last year after altering records, creating false identities and accessing private client information to swindle $27,528.

Under different guises, Proctor obtained Working for Families payments and an unsupervised child benefit. She also accessed the accounts of five Work and Income clients whom she knew lived in Australia and granted them a variety of benefits, redirecting the payments into her own bank account.

In the cases involving benefit fraud, the staff members were receiving welfare payments – either through partial benefits or Working for Families – while working for Work and Income. They were caught lying about either their home or financial circumstances.

Although Social Development Ministry policy is to dismiss a staff member when fraud is detected, there was one incident in the 2008 financial year when a fraudster was mistakenly allowed to resign.

At its highest, however, staff fraud was only committed by a tenth of 1 per cent of staff.

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- The Dominion Post

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