Committee Reports > List of Committees > Dáil > 1990 > Committee of Public Accounts > Final Report - Appropriation Accounts 1988

AN COISTE UM CHUNTAIS POIBLÍ

(Committee of Public Accounts)

Déardaoin, 10 Bealtaine 1990

Thursday, 10 May 1990

The Committee met at 11 a.m.

DEPUTY G. MITCHELL in the chair

Mr. P. L. McDonnell (An tArd-Reachtaire Cuntas agus Ciste) called and examined.

VOTE 42 — SOCIAL WELFARE.

Mr. E. McCumiskey called and examined.

Chairman.—Welcome to the meeting. We are examining Mr. Edward McCumiskey, Secretary, Department of Social Welfare, in his capacity as Accounting Officer for that Depatment on the 1988 audited accounts. It remains to examine paragraphs 62 and 63, and, since they are related, I propose to take them together. Paragraphs 62 and 63 of the report of the Comptroller and Auditor General read:

Overpayments of Social Assistance and Social Insurance

62. The volume and nature of Social Welfare payments make it likely that a substantial number of overpayments will be made and this in turn dictates that the Department should have a reliable system for recording overpayments so that recovery action can be taken as appropriate.

Over payments detected are initially recorded in the administrative section dealing with the specific type of benefit or assistance which then initiates recovery action either by way of deduction from current or future entitlement or by seeking a cash refund in either instalments or lump sum. The administrative section concerned must also supply details of overpayments and recoveries in individual cases to the Accounts Branch where they are recorded for accounting and statistical purposes. This record is the basis for the overpayment figures quoted in paragraph 63 of this Report. Overpayments are also recorded on the central records in order to ensure that the need for deduction is highlighted in the event of any new claim from the person who has been overpaid. An examination by my staff of the recording and recovery procedures revealed that they were deficient in that they did not ensure that recovery action was initiated in cases where claimants made application for a social welfare payment of a type different to that for which an earlier overpayment had been made to the same person. There were also many instances of failure by administrative sections to furnish details of overpayments and recoveries to the Accounts Branch and, where details were supplied, many were incorrectly entered or duplicated in the record maintained by the Accounts Branch. Examples of the errors and deficiencies noted on audit were included in a report on the examination of the system sent to the Accounting Officer.

I asked him how recovery of overpayments was ensured in the absence of adequate recording and what action had been taken or was proposed to eliminate the deficiencies noted.

The Accounting Officer accepted that there had been instances of failure to implement the prescribed procedures, in particular in regard to the notification and recording process and in the system for signalling the existence of an overpayment when a subsequent claim for a different type of Social Welfare payment is processed by an administrative section other than that by which the original overpayment was made.

He attributed the deficiencies to high levels of staff turnover, clerical oversights, limitations on the availability of computer resources and the pressures caused by increased numbers of overpayments being brought to light as a result of the success of anti-fraud measures.

He explained that failure to notify Accounts Branch did not necessarily impede recovery procedures by the administrative sections and, while in general he considered that overpayments were being effectively recorded, he stated that the central records system was being redesigned in a way that would facilitate easy identification of cases where outstanding overpayments existed.

He also stated that all of the cases brought to attention were being followed up and records would be amended where necessary. A new circular was now being prepared which re-emphasised the necessity of adhering to the agreed procedures for processing overpayments. In the meantime, all overpayments would be notified to Accounts Branch in the first instance who would in turn notify Central Records Section where the existence of an RSI number made this feasible.

63. I have been furnished with the following information regarding overpayments of Social Insurance and Social Assistance. This information should be read in the context of the previous paragraph.

Social Insurance

261 individuals were prosecuted for irregularly obtaining or attempting to obtain benefits and convictions were secured in 205 cases. Of the £4,605,159 recorded for recovery in 1988 the Department attributed £2,275,383 to fraud or suspected fraud by claimants.

Social Assistance

59 individuals were prosecuted for irregularly obtaining or attempting to obtain assistance and convictions were secured in 56 cases. Of the £6,390,060 recorded for recovery in 1988 the Department attributed £5,449,041 to fraud or suspected fraud by claimants.

Aged Analysis of Overpayments

Mr. McDonnell.—Yes, Chairman, these paragraphs can conveniently be taken together because we are concerned in both paragraphs with overpayments which the Department became aware of. Paragraph 62 deals with the procedures for the recording of overpayments so that those that do come to light can be recovered. It is, obviously, important that one has a reliable system, because if you do not have an accurate and comprehensive record the likelihood of being able to get the money back must be affected. As the Accounting Officer points out, there could be situations where, even though a case might not necessarily get into the statistics, the recovery process could still be going ahead. One would have to say, of course, that that would not necessarily justify the situation. Indeed, the Accounting Officer does not say that it does.

A specific point mentioned, and one which is of concern, is where a person subsequently becomes entitled to a type of benefit or assistance on which he had been earlier overpaid. The overpayment will very likely be recovered from the subsequent entitlement; but if he subsequently becomes entitled to a different type of benefit or assistance the overpayment might not be recovered and, indeed, I think the section of the Department paying the second one might not necessarily be aware of the first overpayment of a different type. As is mentioned in the paragraph, the Accounting Officer does acknowledge that there have been some deficiencies which he attributes to various factors and I indicate what he has told me is being done to improve the situation.

That is the situation, Chairman, with regard to the method of recording the overpayments. In paragraph 63 I simply give the statistics; and, of course, you must consider the statistics in the light of the effect that the deficiencies which I just mentioned might have on the actual figures. Perhaps I could say that since prior year’s figures were compiled on the same basis you might like me to give you some comparable figures from the previous year. For instance, looking at paragraph 63, the overpayments recorded for recovery in 1988 are £4.6 million and the comparable figure in 1987 was £3.5 million. On the assistance side the overpayments recorded in 1988 were £6.4 million or thereabouts and the corresponding figure for 1987 is £4.6 million. The increase in fraud or suspected fraud, or perhaps to be more precise, the increase in the level of detection of fraud is also a significant figure. You will see the comparable figures there, Chairman. So, you are concerned with two things, if you like, the adequacies in the system of recording and then the actual statistics bearing in mind the inadequacies.

Chairman.—Mr. McCumiskey, you attributed deficiencies to high levels of staff turnover. I notice particularly in page 174 of the Vote that there was a difficult problem with the loss of computer trained staff. Has the problem with staff deficiencies been dealt with and have the other deficiencies been dealt with?

Mr. McCumiskey.—Thank you, Mr. Chairman. The question of staff turnover relates to staff generally, not just to computer staff. In the last number of years we have had an exceptionally high level of staff turnover throughout the whole organisation. This has been due to a number of factors, but I think principally due to the fact that we had to decentralise large numbers of our staff to Sligo. We decentralised all the administrative staff from our pensions’ area. That was over 300 persons, which is quite a proportion of the Department’s staff. The result of that was, that not only were the staff in the pensions area moved — but as all these moves were done on a voluntary basis — we had to draw staff from other Departments and from other branches within the Department. So the whole thing meant that large numbers of staff within the organisation over the last two or more years have been moved from section to section. As this was being done we augmented our training activities within the Department to endeavour to keep the same level of expertise. It was inevitable however that there would have been some fall-off in expertise, particularly in the more technical type of work about which we are talking here. That is because the recording of overpayments is still largely a clerical procedure in our organisation, done by large numbers of staff spread throughout the organisation.

With regard to the future, we are still in the middle of our decentralisation programme because we will shortly be decentralising 200 staff to Letterkenny. So, unfortunately, I expect that there will be continuing disruptions of this nature. However, we have reviewed, as the previous Accounting Officer mentioned, all our procedures in relation to recording overpayments with a view to simplifying them and we have intensified the training of the staff involved. I am hopeful that we have largely overcome the type of problems identified here.

Chairman.—Let us just look at the figures in paragraph 63. Overpayments recorded for recovery in 1988 in the social insurance area were £4.6 million and in the social assistance area £6.39 million. The total for 1988 is £10.99 million, all but £11 million. If we turn over the page, under the “Aged Analysis of over-payments” it says that amounts unrecovered for 1988 were £9.44 million of that £11 million. Has some of that money been recovered since? Am I correct in putting the figures in that way?

Mr. McCumiskey.—Yes, Chairman. The recovery of overpayments is an ongoing procedure. These overpayments are in relation to our various claimants. As you can see, the bulk of them arises from our assistance payments and these are payments to people of low means generally.

Chairman.—I think, looking at the aged analysis, that social insurance is the bulk of them. If you look at the aged analysis it is £17.5 million compared to £11.9 million.

Mr. McCumiskey.—I must apologise on that account. The point I was going to make was that I was directing my reply to the method of recovery of overpayments. In very few cases are we in a position to recover in full from any particular claimant the amount outstanding on simple request to him. We usually have to make arrangements with our claimants to allow the overpayments to be repaid by instalments. It is usually by deduction from ongoing entitlements. Therefore, the recovery of overpayments in individuals cases could be spread over many years.

Chairman.—Right. So, from pre-1986 up to the end of 1988 there was a total of £29.5 million still unrecovered. Presumably when you recover some of the older aged outstanding amounts by that time that has been replaced by some more current overpayments so that the level of overpayments is at the rate of about £30 million on a constant basis. Would that be right?

Mr. McCumiskey.—Yes. You are correct in saying that the recovery of over-payments is an on-going function and recoveries being made in any one year relate to over-payments which arose not only in that year but in previous years. It is an on-going process spread over many years.

Chairman.—Let me come back to 1988. On the question of overpayments for social insurance of £4.6 million, £2.275 million of that was attributed to fraud, or suspected fraud, by claimants and in the case of the £6.39 million social assistance, £5.45 million was attributed to fraud, or suspected fraud. That is almost £8 million of the total which is down to fraud, or suspected fraud, out of £11 million. Do you take a different attitude to people who have attempted to defraud the system from people who have simply been overpaid by accident or unknowingly?

Mr. McCumiskey.—Yes. We do take a different attitude but we commence on the premise that any money which is being overpaid is due back to the Exchequer or to the Social Insurance Fund irrespective of how that overpayment arose and requests are made to the people involved to recoup the money. A different attitude arises in relation to cases where we are satisfied that there has been fraud involved. They will be considered for prosecution in the courts because the fraud can be the basis of a criminal offence. Where we have sufficient evidence we will attempt to prosecute, so in that sense there is a very different attitude taken.

Chairman.—So there is almost £8 million attributed to fraud, or attempted fraud, in this year, of the £11 million?

Mr. McCumiskey.—That is right.

Chairman.—And we are only talking about what was discovered. We are not talking about anything that was not discovered. Is that a fact?

Mr. McCumiskey.—Of course. Yes.

Chairman.—Would you tell the Committee if it is fair to say that of the £29.5 million the same pro rata fraud or attempted fraud would be attributable to that? In other words, would about £18.5 million of the £29.5 million be attributable to fraud or attempted fraud?

Mr. McCumiskey.—No, for this reason: in recent years, and in particular beginning in 1988, we intensified considerably the types and levels of controls which we use in the Department and undoubtedly this gave rise to the discovery of higher levels of fraud. I suspect that the percentage of fraud is higher in the more recent years.

Chairman.—Would you put it in context for the Committee? What percentage of overall spending does this boil down to? Obviously £8 million in one year is a very substantial amount of money. Could you relate that to the number of transactions that take place and to the amount of money spent and give the Committee an idea what percentage this is?

Mr. McCumiskey.—The amount on its own appears to be considerable. In overall and simplistic terms the £11 million would be compared to the £2,600 million expenditure in that year. I suspect in percentage terms that works out at less than half of 1 per cent. In terms of the number of people involved, the overpayments in this year under investigation are related to 28,000 people.

Chairman.—The overpayments relate to 28,000 people?

Mr. McCumiskey.—The overpayments relate to that, of which the fraud element is some 12,500 people. That could then be contrasted with the number of claimants we have on our books, where we have 750,000 claimants. Many of those claimants are claiming more than one payment, for example, they might be receiving a pension and also separately receiving a free electricity allowance or a free telephone allowance. Fraud under any of those schemes or payments to that person would qualify as a count under the 12,500 figure I have given you.

Chairman.—It would not be the £8 million figure. We are only talking about social insurance and social assistance. If you want to talk about total fraud you would have to add back all those things, would you not?

Mr. McCumiskey.—The 28,000 figure of individuals relates to all the overpayments recorded in 1988.

Chairman.—Not just social insurance and social assistance. It included other categories of social welfare recipients, did it?

Mr. McCumiskey.—The other schemes I mentioned — free electricity and free travel — they would qualify as social assistance.

Chairman.—They would come under that heading, would they?

Mr. McCumiskey.—Yes.

Deputy Connor.—On that point of a typical profile of the people whom you find on overpayments, by and large would they not be old age pensioners, and so on, who perhaps have a free electricity allowance or a free telephone allowance and they have had it for years and there has been some change in their family circumstances and they are unknowingly drawing something that they may not be entitled to? Could you put a better profile on the average group of people who seem to be defrauding the system? How typically does it break down?

Mr. McCumiskey.—It is very difficult to speak of a typical claimant in relation to fraud because the phenomenon is found in all our schemes. It is probably safe to say that the majority of the fraud is found in the unemployment payment schemes. Within that a lot of it appears to relate to mis-statement of people’s means. In other words, a large element arises in relation to unemployment assistance being a means tested scheme.

You mentioned circumstances where pensioners may unwittingly have been in receipt of money to which they were not entitled. If it is unwittingly, that is not classified as fraud. If I could explain how the fraud and non-fraud definitions arise. Entitlement is decided by our deciding officers. What happens is that when new circumstances come to light for whatever reason — perhaps the claimant has told us something, perhaps our investigating officers have found something or perhaps we have got in a letter from a member of the public — the deciding officer looks at the case and revises the original decision. If the deciding officer is satisfied that there was no fraud on the part of the person then it is a non-fraud phenomenon. If, however, the officer is convinced on the evidence available that the person deliberately concealed his means for example he had a bank account and did not tell us about it, that would be then recorded as a fraud overpayment. It is important to realise that in relation to the concern expressed about the individual claimants that the finding is then put to the claimant and he has the right to appeal to an appeals officer, which bring us into another independent adjudication and the whole matter is gone into again. Invariably if fraud cases are appealed there will be an oral hearing and the claimant will then have the right to bring in whatever evidence he considers necessary and perhaps the fraud judgment will be overturned. That is a description of how it actually arises in individual cases.

Deputy Connor.—And what element of those overpayments do you regard on an average annual basis as irrecoverable, for the reason that the person does not have the means to pay them back? You obviously do not pursue everybody who has received an overpayment.

Mr. McCumiskey.—I do not think it is possible to make an overall judgment. It is not something that we regard as having certain levels of recoverability or non-recoverability. We do, in fact, demand payment of each individual. Judgments are made on a case by case basis as to whether, in fact, it is worth pursuing the matter. An example of where it might not be so obvious is when a pensioner has died. A lot of overpayments come to light in relation to pensioners after the pensioner has died, when information on the pensioner’s estate is made known to the Department. We then have to make a pragmatic judgment as to whether there is any money in the estate worth pursuing or not. If there is, we pursue, if not we do not. Also, of course, there is the case of the individual claimant who has no means and ceases to claim from us. He may be in employment but we would have to make a pragmatic judgment as to whether we can recover or not. I would stress that repayments, even those which we have deemed to be non-recoverable, remain on our books. If the person claims afterwards, we have the right to, and we do, in fact, look for this money back.

Deputy Connor.—Could a large element of those overpayments be rather small and not very significant? I am thinking of old age pensioners getting the free electricity allowance for a number of months, or a year beyond the period of their entitlement, and they have no other means. Are a lot of the overpayments typically those, and under all the other schemes as well?

Mr. McCumiskey.—A lot of them must be small. They vary considerably. Some of the overpayments are quite large. The amounts can vary considerably. What we are talking about are amounts ranging from £100 to £200, up to £10,000 to £20,000. The major ones arise in the type of circumstances where the person has been in receipt of a pension, perhaps a considerable pension, for several years on the basis of information that was completely wrong or completely fraudulent. As a result, that person’s entitlement over five or six years has been suddenly annulled and done away with and the amount of the overpayment then can be very large indeed. It varies tremendously across the schemes. Looking at the figures and, if, for example, there was £11 million overpayments struck in 1988, spread that out over 28,000 people and the average would be about £400.

Chairman.—£400 is it? Any other questions on this?

Deputy Flood.—The system presently in place for the recording of overpayments is referred to in the Comptroller and Auditor General’s report regarding the flagging of these two other payments. How long has that system been in operation in the Department?

Mr. McCumiskey.—There always has been a system in place. However, it is apparent that it has not always been as successful as it might have been. The basic reason is this. We do not operate one single system, although we are trying to bring it closer and closer together. We operate a lot of individual schemes and some of these schemes are very different in nature. The biggest significant difference between the schemes is that some of them are insurance based, based on a person’s contribution record with the person having an RSI number; some of them are assistance, having no contribution base and no RSI number and very little overlap between the type of clients involved. Over the years it has not been possible, for example, to record in the insurance schemes what has been happenning in the assistance schemes, and where that was not possible it simply was not done. In general, however, where it has been possible the system has been designed to have this type of cross-referencing. The purpose of this is that if the overpayment cannot be recovered from the client from the benefit which they are presently getting, the next time they claim benefit we would be able to recover it from them.

Deputy Flood.—I would like to think that there is something being done at this stage in the light of experience and the very substantial figures we are looking at here. What is now being done in your Department to plan for the future to cope with controlling overpayments and, as far as possible, fraudulent claims? Are you introducing new systems or what exactly is happening now, in the light of experience?

Mr. McCumiskey.—There are two aspects to that. You asked me about controlling over-payments. I think, perhaps, that the question under discussion here is the controlling of the recording of them, in the better management of them, once they have arisen, because the controlling of overpayments brings one into the area of the various control measures we have taken. The single significant long-term action we are taking is that we are unifying the administration of our schemes around our central record system. Our central record system is a computerised system but in its present state it is relatively simply and it is not comprehensive. The Comptroller and Auditor General mentioned this in his opening remarks the last time I was here, that it is not and was not designed to be fully comprehensive. What we are moving towards is a central record system which will be a comprehensive index of all our clients. It will record on it the claims they made, when the claims begin and when they end — that would be to prevent duplicate claiming — and also the amounts due to them and any amounts that they may owe to us by way of overpayments. This is a long-term job because our operations are very big indeed. We are not aware of any similar type of system in this country but we already have the strategy for it. We know where we are going It will take us a number of years and as part of that too, as I mentioned here before, we are moving towards a situation where we hope that everybody in the country will have an RSI number, as most of the population are insured now this will happen, and also that our Department will have responsibility for this RSI number which will give a unique reference number to all our claimants. We hope that by that unique reference number and the comprehensive central record system we are building, we will have a system that will do what simply it has not been possible to do up to now.

Deputy Flood.—With regard to a claimant who might require information from the Department of Social Welfare on the decentralisation issue, to Sligo particularly, how has this affected the claimant’s ability to communicate with Sligo, for example? What are the telephone arrangements from Dublin for a claimant, who wishes to seek information and needs to get it from Sligo? Is that working satisfactorily? I received a lot of complaints on the issue, where people are making telephone calls and are left holding on for a very long time. These may be the very people who are trying to clear with your Department the sort of problems that we are discussing now.

Mr. McCumiskey.—Yes, we have had some problems with Sligo. To be fair to us, it was inevitable that there would be some problems. Perhaps I could describe what we did in relation to Sligo. We extended our computer systems from Dublin to Sligo so that the information available to the staff in Sligo and to the staff in Dublin is more or less the same, with, of course, the slight difference that the actual paper files are held in Sligo. The first thing is that communications made to either Dublin or to Sligo can get for most claimants most of the information they want, namely, the basic information on each claim which is held on our computer screens. However, as I said, the paper files are kept in Sligo and there may be cases where that information is not on stream and that means getting through to Sligo. We then arranged that not only would there be computer links between Sligo and Dublin but that the telephone links between the two would be strengthened considerably. We instituted a system whereby claimants who phoned our building in Dublin could have their calls transferred to Sligo at no extra cost to them.

It is true that during the first few months of setting up in Sligo this system became somewhat stretched — not so much, I understand, because of the technical problems involved but simply that the staff in Sligo were almost completely new. It is not generally realised but of the 300 staff we sent down to Sligo well over 90 per cent of them had not worked in the Department of Social Welfare a year before they went. There was a certain number of teething problems.

However in the last two months or so we sent a special team of people from headquarters to Sligo to look at this whole situation, to look at the work situation and in particular the telephone answering situation. We monitored telephone call answering, for example, specifically in Sligo and from the figures I have seen the situation has much improved.

Deputy Ahern.—Would cheap telephone calls also apply to people from Cork?

Mr. McCumiskey.—No, unfortunately, we do not have a nationwide cheap telephone system. What we did, which was as much as we could do at that time, was to allow calls that would normally have had to come to Dublin in any event to be transferred to Sligo at no extra cost. It did not worsen the present situation and it gave a slight advantage to people in the Sligo area who could now also call on a local call.

Deputy Taylor.—On the question of the recovery of overpayments, do you see civil procedures to recover this or criminal procedures, or both? How do you approach that?

Mr. McCumiskey.—We have the right and perhaps the duty to take criminal procedures and we also have the right to take civil procedures. We very rarely take the civil procedures. In fact, we have found that they are simply not cost effective in the sense that the people concerned in many cases are a very poor mark indeed. The criminal procedures, I hasten to add, are not a method of recovering overpayments. The criminal procedures are in response to the fact that under the legislation fraud of this nature is a crime and the action is taken under the criminal law. It very often happens that the judge in a case will insist that the money outstanding will be recouped to the Department and, of course, the Department would ask that this should be done. Of course, it can only be done where the person concerned is a good mark and many of these prosecutions do in fact lead to recovery of the money. I suppose to be more realistic about it, it is the fear of prosecution perhaps that is probably more effective in leading to repayments of moneys outstanding.

Deputy Taylor.—In a typical case, for example, where a case has been detected and there has been an overpayment, if that person makes an arrangement with the Department to pay off the amount of the overpayment and sets about doing that on an instalment basis or whatever, would the Department still bring a prosecution? Is everybody prosecuted or is this tackled on a selective basis that only some people are prosecuted and others are not? Finally, on that issue, have there been cases of people sent to prison for any of these overpayment situations and what sort of numbers are we talking about in that regard?

Mr. McCumiskey.—Firstly, in relation to the criteria that we use for prosecuting, the practice has been that all cases unless they were absolutely trivial in nature would be prosecuted. In recent years with the large increase in our anti-fraud activity and the large increase in the number of cases coming to light, we have tried to be a little bit more selective in relation to what we regard as trivial or not. Generally speaking, the general principle is that once we have discovered a case of fraud and once we have sufficient evidence to prosecute we will prosecute. Of course, there have to be circumstances in which this simply is not the proper thing to do. The kind of things that we would be very concerned about would be, for example, prosecuting a person who is ill or mentally unstable or things of that nature and generally we would avoid prosecuting in cases of that nature.

The mere fact that a person has offered to make a repayment is not in itself a relevant factor for us to take into account as to whether we prosecute or not. As I said earlier, the prosecution arises because it is a criminal offence and the adjudication of a criminal offence is, from our point of view, a matter for the courts.

You also asked me in relation to people going to prison. This can arise and has arisen in the past. The numbers involved are very few. The figures I have, for example, in relation to cases finalised by the courts in 1988, of which there were over 300, is that prison sentences were imposed in seven cases. What I cannot say at this stage is whether in fact those sentences were ever served or not because these cases may have been appealed and often are.

Deputy Ahern.—Following on that, looking at the appropriations-in-aid, I noticed that there is an estimated amount for recovery — £900,000 — and the realised figure was £1,540,000. Is there any particular reason why there is such a difference? Is it because of what you are doing?

Mr. McCumiskey.—I am sorry. I am slightly lost at the moment as to where we are in relation to this.

Chairman.—Perhaps if you want to give some thought to it we could come back to it on the Vote and your colleagues might look it up in the meantime.

Deputy McGahon.—Mr. McCumiskey, I have been a member of this Committee for nearly seven years now and over the years before your time here there were some very conflicting opinions expressed here. Denials of the extent of social welfare fraud were common not only here but on Dáil questions. On one occasion following revelations by the Sunday Independent and the Evening Herald the then Government Press Secretary issued a statement on a Sunday morning stating that the extent of social welfare fraud in the mideighties was only £4 million. The alarming point about it was that the Department seemed to be blissfully unaware of the malpractices that occurred. These figures stating overpayments give a possible clue — they are not conclusive because you do not know really the extent of it — that it certainly was a very significant sum. Having said that, I would like to acknowledge the compassionate manner in which yourself and the Department sometimes deal with overpayments and accept a reasonable payment because it could cause a lot of hardship to the families.

Overpayments and frauds occur in areas such as the building industry, the forestry industry and the fishing industry. Have you successfully come to terms with those particular areas and what is the present situation? The building industry seems to lend itself to it, particularly along the Border, where building contractors from the North can come in and allow their men to indulge in a double fraud on both sides of the Border. Has that been eliminated?

Mr. McCumiskey.—I would hesitate to say, that fraud has been eliminated in any sector, much less in the areas in which you have mentioned. These areas — the building, forestry, fishing and some others — have attracted a fair bit of attention over the years both in the media and within the Department. In so far as these are abuses being perpetrated there I think the abuses are not limited to our social insurance system. There are other types of abuses as well. The reason I say that is that whatever we do of itself it is not going to solve all the problems involved. You would be aware, beginning last year, we were so concerned with some of these areas that we provided in the legislation that employers would notify the Department of any new employees they take on. This is not an aspect of the system in this country when someone takes up a job with a new employer. It takes some time, as we discussed here previously, before they may be even registered with the Revenue Commissioners, much less before they come to the notice of Department of Social Welfare. But because of the concern in the construction, cleaning, forestry and security areas we instituted this type of system with a view to keeping a measure of check and control on what is happening. Also, I might mention that this year we extended those provisions to subcontractors.

The results of it have been rather positive in relation to the construction industry in the sense that we have found employers generally to be very helpful. There are obviously teething problems — mistakes, errors and that kind of stuff. We have as a result come across situations where, due to errors or oversights, be what it may, things have not been done properly. But we have been able to make use of the information we have got on hand and to react to it much more quickly than before. We are simply too new at this particular game to know to what extent we are succeeding but the message has gone out very clearly to employers in these areas about what we are at.

One important aspect of it is that, presumably, it is the employers who do not speak to us who are the ones that we really need to get. But when we do come across them they will now have as it were breached the system even more clearly by not notifying us of these employees they have. These employees will turn up eventually on our books so that we will have an extra weapon in our armoury.

Deputy McGahon.—The onus is now on an employer to tell you how many employees he has? Even in a part-time capacity?

Mr. McCumiskey.—No, the obligation on him was to notify us of any new employees that come on his books. This information is then fed into our local offices and recorded on our systems. As a matter of interest, what we do then is we check that employee’s name against our present claimants and things of that nature. We retain this information on our books and it is then fed out to our inspection branches, so that when they do inspections of these employers they can check to see whether in fact new employees have or have not been notified to us. We already have a number of employers on our books with a view to prosecution in relation to matters we have found under this system.

Deputy Cullimore.—Deputy Ahern raised the matter of persons in Dublin being entitled to a free phone to communicate with the Department in Sligo. Surely it is discriminatory not to have the same facility for people in rural Ireland; and, if you would accept that, have you any proposals to change the situation?

Mr. McCumiskey.—It certainly was not meant to be discrimniatory. As I explained, we moved the administration of our pensions’ sections from one part of the country to the other. We tried to ensure that this would not make life any more difficult for people than it had been at present. After all, in relation to all our schemes at the present it is very often necessary for people to communicate with Dublin. This is just an unfortunate fact of life. By moving the staff to Sligo we felt that we would try not to worsen the situation, and we were successful in this. As I said, it gave an advantage to people in the Sligo area who could now communicate directly. This is simply one of the aspects of decentralisation. This is what decentralisation is about. Services are taken from one area of the country and put into the other. It would be nice to think that there might, in effect, be a free phone service for all claimants all over the country. But we would be talking about a matter of considerable cost. It is something very much for the future. I think at the present levels of costings of telephone calls it simply would not be on.

The way we have been trying to meet this issue, which is really a problem of difficulties in communicating with the Department, is by extending our computer links out to our local offices. By doing that there would be proper inquiry services available at as many points as possible around the country. We are building this up gradually. Again, it is a long term process, but there are more and more centres now around the country where people can drop in. The staff there can bring up their case on the computer system and give them up to date information of the status of their claim and answers to the problems they have.

Chairman.—To put this in context, obviously the Committee would be concerned that the level of detection in this area would show up £11 million unrecovered money, and a good proportion of that has been accounted for by way of fraud. We also have to look at the amount of money which has been spent and the amount of transactions which take place. Irrespective of the level of income of the average recipient, we cannot in any way sympathise with fraud or attempted fraud or weak systems or detection of fraud which do not prevent overpayment. For instance, compared perhaps to the situation in the tax area where people are not meeting their obligations to the State, comparably it would not be as grave a sin, I suppose.

Also, in relation to particularly difficult unemployment situation and the number of social welfare recipients, this situation has to be taken into account. Nonetheless, I think it is fair to say that the Committee expect the Department of Social Welfare, as I said on a previous occasion, to be a watchdog, not a bloodhound. It is easy for those of us who have jobs to sit down and make judgments on other people who do not have jobs and who perhaps have difficult situations to deal with. I think there is an improvement in the situation in the Department of Social Welfare. I think, generally, they are getting on top of the situation. I do not think this Committee expects the Department to persecute anybody. Eight million pounds is a lot of money and it cannot be excused, but there will always be a certain amount of leakage. The essential question and the final question I want to put to you is this, Mr. McCumiskey: how good are fraud detection operations in your Department? What emphasis is given to them, what priority is given to them and how good are they?

Mr. McCumiskey.—We think they are very good indeed. There are three main thrusts to what they do. I would emphasise that we have a range of groups within the Department who are devoted exclusively to fraud and control matters. Apart from that, all of our staff who deal with claims and inquiries are trained to be very fraud conscious. We feel that through the methods we have used in recent years to raise the level of fraud consciousness among our staff, and also among the public and employers, we are actually preventing a lot of fraud that might otherwise have come our way. The cases under discussion today come to light by way of overpayment, cases where we actually discover fraud. These numbers and amounts are increasing, which is a consolation in relation to the question as to how effective we are. There are a lot of situations where people voluntarily cease to claim, by reason of the fact that we have our investigation and control units.

This is a phenomenon which is hard to accurately describe in terms of fraud or control. Let us say it is a discipline on the system. We find it particularly in relation to the unemployed when we approach them; some of them we direct towards FÁS courses and various things of that nature. We find circumstances where people simply cease to claim.

Similarly, in relation to our cadre of medical referees who control our sickness benefit scheme. We call people for medical referee examinations, some of them we find capable; some we do not. It happens that as people are called, a lot of them simply decide that it is time to put in a final medical certificate. We feel on all these scores that because what we are doing is reasonably high profile it is quite successful.

Chairman.—I think the Committee would want your detection system to be good; it should be in place and should have all the effects that you suggest it should have. We would want the Comptroller and Auditor General to continue to monitor this and report on it. Against that, it would be only fair to say that the Committee do not expect that you take anything other than a balanced approach to your work. We certainly do not expect that there would be any lack of compassion within your Department where that is necessary to be taken into account. It is a question of finding the correct balance and continuing to pursue the correct systems. Bearing all of that in mind, I think we could note these paragraphs for now and we will review the situation again in next year’s accounts.

VOTE 42 — SOCIAL WELFARE

Mr. E. McCumiskey further examined.

Chairman.—Deputy Ahern asked a specific question regarding appropriations-in-aid. Perhaps you would deal with that first, Mr. McCumiskey.

Deputy Ahern.—It was in the context of the question that Deputy Taylor raised about the improvement in recoveries. Is it because of the improvement in the systems that the recoveries have been greater than estimated?

Mr. McCumiskey.—The answer to the earlier question is rather difficult because it is a rather technical aspect of the accounting procedures. In fact, these figures cannot be accurately forecast and this is part of the problem. Also, as the level of overpayments and recoveries increases year by year, this particular phenomenon tends to be somewhat distorted. In answer to your question, I do not think it represents anything specific. I would just say that the absolute amounts involved are terribly small in relation to the total amounts of money we are talking about.

Chairman.—Would conscience money come into this particular heading?

Mr. McCumiskey.—No, I do not think so.

Chairman.—Do you receive payments in that way?

Mr. McCumiskey.—Very, very little.

Chairman.—On the question of the Job Search programme, how successful is that?

Mr. McCumiskey.—The Job Search programme has been and continues to be very successful. The main objective of the Job Search programme was to bring the unemployed, and particularly the long term unemployed, in touch with the range of State services available to them. From the policy perspective, too, there had been a feeling that the long term unemployed seemed to be a self-perpetuating group in the sense that once individuals had been unemployed for a particular length of time they found it more and more difficult to re-enter the labour market. I think there was a fear that this may have been due to psychological reasons. The Job Search programme was an effort to try to break through this cycle and to put them in touch with whatever range of services there are. That is the main function of the Job Search programme. Within it there is a particular programme whereby certain numbers of the unemployed undergo short courses of a very basic nature. The reactions we have got from the long term unemployed were generally quite favourable in relation to these courses. It awoke their own perception of their own ability to participate, also perhaps of other State agencies in relation to the long term unemployed.

Deputy Ahern.—On subhead J. — Social Assistance and Other Allowances — the other allowances, I presume, include free electricity, free travel allowance and so on. With regard to free travel allowance, are Bus Éireann and Iarnród Éireann paid so much per head or so much per journey travelled by individuals who have a pass? While I am on free travel passes, I understand that old age pensioners, invalidity pensioners and DPMA recipients qualify for free travel. Would a person who is in a psychiatric hospital, is not in receipt of any such payment, but is in receipt of what is called a working allowance from the health board, qualify for a free travel pass as well?

Mr. McCumiskey.—In relation to free travel, the first question you asked was how the cost of this is arrived at. In our dealings with CIE it is not done on a case by case travel basis. There are surveys done from time to time which look at the level of usage and the cost is calculated in relation to that. I am happy that that is both realistic and, from the Exchequer’s point of view, a cost effective way of doing it. It also avoids the necessity for a cumbersome bureaucracy of accounting, recording etc. That does not necessarily apply in relation to smaller bus companies. Our relations with them tend to be, because of the smaller numbers involved, more directly related to the actual specific usage by individuals.

In relation to the free travel for people in psychiatric care, I am not completely au fait with that. Free travel is generally given to people on DPMA and people on invalidity pension, to certain categories of that nature. That is the way the scheme is designed. Generally speaking, if people do not fall within those categories they do not come within the free travel scheme as administered by my Department. There may well of course be arrangements made within particular health boards whereby individuals are given travel vouchers to attend for treatment. I would not be familiar with that. At the moment the free travel that we introduced is pretty broad and all mentally handicapped and disabled persons, people on disabled persons’ maintenance allowance, are entitled to free travel.

Deputy McGahon.—On subhead P. — Grant to the Society of St. Vincent de Paul — I notice a sum of £100,000 given to the Society. That is a very worthy payment, but is it not rather small by today’s standards? St. Vincent de Paul do wonderful work around the country in helping inadequate people. I would have felt that that is a very small amount of money to give to this most deserving cause. The health boards give out a lot of supplementary benefits and do a good job also. Do you fund the health board in any way, or what way is that money recouped to the State?

Mr. McCumiskey.—The first question was in relation to the grant to St. Vincent de Paul. I do not know if I can comment on the adequacy of it. It is not meant to be other than a grant to them. They are a major voluntary organisation. My own experience is that they have been extremely grateful for the grant they get, which is, after all, just a contribution towards their own effort. There is nothing scientific about it. There is a limited amount of money available for this type of thing. We would agree that this is one of the most outstanding voluntary organisations we have in the country.

In relation to the more general question of the grants paid by health boards, in so far as any moneys paid by health boards come out of the supplementary welfare allowance scheme they are funded through a Vote for which I am responsible. But the large range of grants that health boards make, they make out of their own allocations, which do not come through the Vote of the Department of Social Welfare.

Deputy Flood.—Under subhead B.3.— Office Premises Expenses — I see there is a reference there to the Galway Exchange. Can I just ask you what is the position with regard to improving and upgrading employment exchanges, because some of them leave a lot to be desired.

Mr. McCumiskey.—There is in fact a very intensive programme of building new employment exchanges and refurbishing and extending existing exchanges throughout the country. It is something that we have been concerned about because as, you said, many of our exchanges are old and they were built for times when the levels of unemployment in the country were a lot lower than they are at the moment. The numbers increased rather rapidly and it simply was not possible with the resources available to increase the size of the offices to the extent that we should.

In the major urban areas of Dublin we are trying to open up smaller offices in the suburbs to make it easier for our claimants to have access to our services. This is in contrast to the bigger exchanges that we have, say, in Gardiner Street and in Werburg Street. If you look at our record over the last number of years you will see that a large number of new exchanges have been opened. Many of them have been refurbished. We work within the resources that were allocated on this. I think the resources on this are quite considerable.

Deputy Flood.—Some of our exchanges, as you rightly indicated, were perhaps built for lesser usage. It is terribly unfortunate for people who are rightly entitled to various claims of one kind or another to see them having to queue outside exchanges in all sorts of weather. Could something not be done in some kind of a fire brigade action to try to mitigate the reasons why people have to queue outside in all sort of weather? Surely something could be done to stagger the claims, particularly in the major urban centres. Is anything being done about that?

Mr. McCumiskey.—Yes, this is an issue that comes up fairly frequently with us and every time it comes up in a particular case we look at the situation. There are large numbers of people involved. I suppose part of the underlying cause for it is that we pay many of the claimants in cash, which, compared to other countries, is quite an unusual way of paying; but we do it. The public find this very convenient. We do not find it that convenient, because it is a very labour intensive activity; but it does mean that the public turn up at our offices in large numbers. We hope, as we are expanding the computerisation of our local offices, to introduce alternative payments methods. This would give us the ability to have, perhaps, more staggered attendance at our local offices, in conjunction with new alternative payment methods.

There is a phenomenon that we have not been able to deal with. It is something like this. We ask the claimants to attend at various times during the day and people are given specific time slots within which to attend for signing. But we find that in very many of our offices people will find it difficult to adhere to these times. They seem to want to come into our offices immediately they open, first thing in the morning and also first thing in the afternoon.

Deputy McGahon.—Because they want to get to work, in some cases.

Mr. McCumilskey.—I presume that the unemployed have commitments of a social nature, just like everybody else. Unfortunately, because, for example, our programme of building suburban offices is not as advanced as it should be, or we would like it be, people still have to travel distances into our local offices to come into town. It is a problem. They do, unfortunately, want to come earlier. We try to stop this phenomenon when we can, but we notice it happens even in new offices where we have plenty of space and good facilities. They simply will come before the office opens, but we are conscious of that problem.

Deputy Flood.—A final question, Chairman, if you will allow me to be a little bit parochial. What is the position with regard to the Tallaght employment exchange, because I see Galway is mentioned here? Well done Galway, but what about the Tallaght facilities, because that is one of the offices that is at present terribly crowded and cramped? Galway is mentioned. Why not Tallaght?

Mr. McCumiskey.—Yes, we are planning for a new employment exchange in Tallaght. We have an office there at the moment and it is reasonably small. It is too small, in fact, for the number of clients we have there. The planning for the office is part of the planning for the new town centre. We have the site and the planning is fairly advanced on it. My understanding is that we expect to open that office sometime next year.

Deputy Flood.—Is it a purpose built building or are you taking space in the town centre?

Mr. McCumiskey.—As with all our buildings, it will be a purpose built building. It would have to be.

Deputy McGahon.—From the Dundalk viewpoint, the local employment exchanges have certainly been ungraded and improvements have been done. I applaud you for it, Mr. McCumiskey. However, I feel that there is a need certainly in that one — I am sure it is the same in every employment exchange — for some type of privacy to be provided where people can have privacy rather than shouting through a hatch in front of an assembled multitude. Many people unemployed for the first time find it is rather an unnerving experience to go into an employment exchange and to have to state their case and the facts associated with it. I feel there is a need for a small room to be provided where people can have a private conversation.

Chairman.—I think you will bear the Deputy’s comments in mind, Mr. McCumiskey.

Deputy Taylor.—Could I ask you, Mr. McCumiskey, would you agree that the local community information offices that exist in a number of areas play a very important role in helping claimants evaluate their claims and work their way through the maze of complexity that is now represented by the social welfare system? Would you agree that they fulfil a very important role for very many thousands of people who do not understand the system and are confused by the system?

Mr. McCumiskey.—Yes, I quite readily agree and I think this is the way it should be. Our experience shows us that most information regarding our systems is obtained by claimants from their next-door neighbours and friends. The sources of information available to clients cannot be too many in relation to our services, which are complicated and difficult. But they are also needed very quickly by people when they need them. For example, when somebody is widowed it may be the first time that person has ever thought of the need for the range of services we have. I am quite happy to see a whole range of services and channels available to them to acquire information about our services.

Deputy Taylor.—I am glad to hear you say and agree with me that you see the role of the community information officers is an important one and important in helping and advising people. It is deeply regrettable, and is to be condemned, that they are dealt with by the Department and the Government in general in such an unsupportive way from the point of view of giving those community information offices the very minimal grants they would need, no less than the Society of St. Vincent de Paul, to enable them to fulfil their function, namely, giving advice and assistance to many thousands of people — a function which basic ally should be provided by the Department itself but the Department does not have the resources or ability to do that. When there are these local offices, such as the Tallaght Welfare Society — and that is but one — which see many thousands of people each year and which are hamstrung and crippled and unable to fulfil that essential service, this is a very poor comment on the Department. Many people have put it to me that they think the Department has a policy that the fewer people who know about their entitlements in this matter, the better; and that consequently no adequate grants are made available to societies which are on the brink of collapse as a result of the failure of the Government and your Department to provide them with the funds they need to provide the information and services the Department itself ought to be providing.

Mr. McCumiskey.—No, I do not accept the sense of what you are saying. We give considerable help to these organisations by way of supplying them with the information and supports that we can. We have a role in relation to the disseminating of our own information. We put considerable resources into it; but we are always, happy to help other organisations or groups, be they State or semi-State or whatever, who will help in this matter. It is unrealistic to think that any one Department of State can reach out to every citizen at all times.

In relation to the question of grants to these organisations, there are two aspects here. Firstly, as a Department we do distribute out of the very limited funds available to us for this purpose grants to a whole range of various groups of charitable organisations, including groups who are involved in information giving of the type mentioned. However, it is only a very small part of the amount of money available to us for it. I am convinced, in so far as I am responsible for the distribution of the moneys that are made available under my Vote, that they are spent wisely in this way with a view to making the totality of the information on services relating to social security as adequate as it can be.

Chairman.—I think we can note the Vote for now. Thank you, Mr. McCumiskey. That concludes the examination.

Could I suggest to the Committee that we have the Charitable Donations and Bequests Vote down for examination. Normally, that is something which gets a cursory examination but a very detailed report has been sent in to us. I think it is something we need to spent a little time on.

Mr. McCumiskey, there is one other thing I would like to suggest to you. Perhaps the Committee might think at some stage of looking at the situation in Sligo some time over the summer. Would you be good enough to arrange that, Mr. McCumiskey?

Mr. McCumiskey.—Certainly.

Chairman.—We have a number of things well in hand and it would be good idea, giving the extent of the report sent over to us, if we spent a little time on this. I am proposing that we might excuse the examination this morning and call Mrs. Doris first on a future occasion so that we can spend some time on that examination. Does the Committee agree on that? Agreed.

The witness withdrew.

The Committee adjourned.