Summary

Identity fraud has been recognised as one of the most pervasive developments in fraud in recent years. Immigration identity fraud can involve the use of a false name, or failure to declare other names a person is known by, in an immigration application. This is usually done to hide historical factors that may have an adverse effect on the person’s application for entry into New Zealand.

The Department of Labour (the Department) is responsible for facilitating the migration of skilled migrants to meet New Zealand’s identified labour needs and contribute to building growth in the economy, and for the resettlement of refugees in keeping with the Government’s international humanitarian obligations.

The Department also has responsibility for helping to maintain the security of New Zealand’s borders. This requires a balance between making the entry of people with an appropriate authority as smooth as possible, while preventing the entry of those without the appropriate authority, and detecting and removing those who have entered fraudulently.

We wanted to know whether the Department has effective systems, processes, and procedures for the prevention, detection, and investigation of those who seek to enter New Zealand with a false identity.

To carry out our performance audit, we selected two entry categories with different immigration aims, objectives, entry requirements, and processes. The two categories chosen were:

• the skilled migrant category, because skilled migrants represent a high value to New Zealand’s labour force and there is a high demand for places; and
• the United Nations quota refugee category (UN-quota refugees), because refugees from certain countries of origin may pose a high risk of immigration fraud.

To assess the Department’s systems, processes, and procedures for the prevention, detection, and investigation of immigration identity fraud within the two entry categories, we reviewed the Department’s strategies, plans, and guidance documents. Our examination included interviews with Department staff in the head office and at Immigration New Zealand branch offices in Auckland and Wellington, and teams working in locations such as airports in New Zealand. We also liaised with external stakeholders, including the New Zealand Police and the United Nations High Commissioner for Refugees.

Our findings

Overall, the Department has systems, processes, procedures, and relationships with relevant external agencies in place to prevent, detect, and investigate immigration identity fraud within the skilled migrant and UN-quota refugee entry categories. We also note that the Government is currently undertaking a significant immigration change programme, that will affect the Department’s systems, processes, and procedures for managing immigration identity fraud in the future. As most aspects of the programme are yet to be fully implemented, it was too early to examine the effect of these changes as part of our audit.

However, our audit identified a number of areas where improvements can be made. In our view, the Department needs to identify and monitor risks specific to immigration identity fraud, and prepare strategies and plans to address those risks. The Department needs to provide training, guidance, and systems support for staff involved in the detection and investigation of immigration identity fraud specific to their roles, especially in relation to fraud investigation where there is a significant backlog of cases. The Department also needs to collect better data and evaluate processes to make the most of opportunities to learn from their prevention, detection, and investigation activities.

Preventing immigration identity fraud

We expected the Department to have comprehensive systems, processes, and procedures for the prevention of immigration identity fraud.

We found that the Department assesses generic immigration fraud risks, but these risks are not clearly supported by identification of operational risks that are specific to the two categories we looked at. As part of the immigration change programme, the Department is in the process of preparing an Immigration Business Transformation that seeks to guide activity to areas of greater risk. A business case prepared by the Department for the Immigration Business Transformation will be considered shortly by the Government.

There are systems for the prevention of fraud, and these should be enhanced once the system to assess client value and client risk is implemented throughout the Department. This was intended to be completed in May 2007. The Department has a number of relationships with external stakeholders with responsibilities for the prevention of identity fraud. The Department has not evaluated the effectiveness of its prevention system.

Detecting immigration identity fraud

We expected the Department to have robust systems, processes, and procedures for the detection of immigration identity fraud.

The Department does not have a specific plan for how it will manage the detection of identity fraud, but has built detection activity into the application processes for the two categories we looked at. There are staff whose work involves the detection of fraud (customised service officers and refugee quota immigration officers), but their roles could be better defined to reflect the importance of detecting immigration fraud, including immigration identity fraud. Generic training is provided for these staff, but there is little training that is specific to the detection role.

The Department has systems in place for the detection of identity fraud. However, the systems rely on staff to decide the level of identity verification required for individual applicants, and there is little training specific to detection. This can result in different Immigration New Zealand branch offices taking different approaches. In addition, the Department does not store all client identity information electronically, so it is difficult for staff to compare identity information on current applications with that submitted previously.

Verification of the identity of UN-quota refugees is complex, with reliance placed on face-to-face interviews with refugees. The Department needs to improve the interview guidelines used for interviews to ensure that sufficient information is gathered to assess risks posed by refugees. The Department has not evaluated the effectiveness of its detection system because of the lack of historical data.

Investigating immigration identity fraud

We expected the Department to have targeted systems, processes, and procedures that focus on the investigation of immigration identity fraud, once detected.

The Department has procedures for conducting fraud investigations, but it needs to improve the systems and processes that support the procedures. There are dedicated fraud investigators, most from a law enforcement background, but they receive only limited training that is specific to the immigration environment.

The Department does not have tracking systems that indicate the timeliness of an investigation or the conversion rate from investigation to prosecution, and it has a significant backlog of cases to investigate. It has operational relationships with a number of external agencies, but has not evaluated the effectiveness of its investigation processes, as it lacks the historical data and systems to collect and analyse the necessary information.

Our recommendations

Preventing immigration identity fraud

We recommend that the Department of Labour:

1. regularly identify immigration identity risks specific to the skilled migrant and UN-quota refugee entry categories;
2. regularly and formally evaluate its prevention activities, and gather and assess relevant information and intelligence from its identification and assessment of risk, identity management initiatives, and prevention systems;

Detecting immigration identity fraud

3. prepare a specific plan for the detection of immigration identity fraud within the skilled migrant and UN-quota refugee entry categories based on identified risks;
4. emphasise the importance of the detection of immigration fraud for customised service officers and refugee quota immigration officers, and include detection in the refugee quota immigration officer job description;
5. address the lack of training available for customised service officers, verification officers, and refugee quota immigration officers by providing a co-ordinated detection and verification training and development programme specific to their roles;
6. consider storing all identity information within or linked to its Application Management System as part of future information technology developments;
7. prepare specific guidance on how identity verification is to be carried out throughout the Department to provide for consistency in verification practice;
8. review recent verification reports throughout the Department to identify any common deficiencies and to provide for consistency in the reporting of identity verification;
9. review the UN-quota refugee interview guidelines for questions relating to risks to New Zealand’s international reputation, to ensure that all relevant information can be gathered in a thorough and timely manner;
10. regularly and formally evaluate its detection activities, and gather and assess relevant information and intelligence from verification and assessment of skilled migrant applications and UN-quota refugee referrals;

Investigating immigration identity fraud

11. address, as a priority, the limitations of the current IT systems to accurately track and report on the timeliness and effectiveness of fraud investigations;
12. address the lack of training available for fraud investigation officers and refugee status officers by providing a co-ordinated training and development programme specific to their roles;
13. regularly review the priority category initially assigned to fraud investigations, to provide additional assurance that high priority cases are allocated for investigation;
14. regularly audit the fraud investigation backlog, to monitor and assess staffing requirements for priority cases, and to ensure that all backlog fraud cases are accurately prioritised and actively managed; and
15. regularly and formally evaluate its investigation activities, and gather and assess relevant information and intelligence from investigations.
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