http://news.sky.com/home/politics/article/16228821

Ministers Slammed Over Welfare-To-Work Firm

A4e welcomed the finding that no fraud had been identified

9:41am UK, Wednesday May 16, 2012

Ministers have been accused of leaving “glaring holes” in fraud controls on welfare-to-work firm A4e as one of its contracts was axed.

The National Audit Office (NAO) said vital evidence was missed in risk assessments of the company, which holds Government contracts worth more than £70m a year.

The Department for Work and Pensions (DWP) did not request internal audit reports, including a paper highlighting nine cases of possible fraud and seven of improper practice by A4e staff.

The department knew that fraud was a problem, but missed looking at the obvious sources of evidence. They didn’t even look at the internal audit reports which point to the real risk of systematic fraud and bad practice in A4e.

Labour MP Margaret Hodge, Public Accounts Committee chairwoman

It comes after it was announced that the company’s Mandatory Work Activity (MWA) contract to help up to 1,000 jobless people in the South East find work was being ended.

Employment minister Chris Grayling said a review by the DWP had not uncovered any fraud, but did identify “significant weaknesses in A4e’s internal controls”.

“The documentation supporting payments was seriously inadequate, and in a small number the claim was erroneous,” he said.

“The process established prior to March fell significantly short of our expectations.”

The programme is aimed at helping jobseeker’s allowance claimants identified as most in need of support. Participation is mandatory, with sanctions against those who fail to take part, or complete a placement.

Chris Grayling said A4e ‘fell significantly short of our expectations’

It is understood the cancelled deal was worth less than £1m, and A4e retains its other contracts, including those under the Work Programme which tackles long-term unemployment.

The original allegation against the company suggested that A4e employees may have claimed payments for MWA claimants who had not been placed in work.

A4e chief executive Andrew Dutton said: “These findings demonstrate what I have always maintained to be true – that there is no place for fraud at A4e – and make it clear that A4e has strong controls around its flagship contract, the Work Programme.”

Labour MP Margaret Hodge, chairwoman of the Public Accounts Committee, said she was “truly shocked” by the “glaring holes” in the Government’s prevention of fraud.

“The department knew that fraud was a problem, but missed looking at the obvious sources of evidence,” she said.

“They didn’t even look at the internal audit reports which point to the real risk of systematic fraud and bad practice in A4e.”

Paul ChampionStrategic Project Manager

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