Foreword

The Ministry of Social Development has a major responsibility to fulfil with its role of providing policy advice and services for improving the social well-being of New Zealanders. This includes safeguarding the integrity of the social security benefits system, which makes payments amounting to billions of dollars a year.

To protect the integrity of the benefits system, the Ministry must effectively counteract attempts by some people to receive or keep receiving benefits they are not entitled to - known as benefit fraud. This presents a delicate balancing act for the Ministry to effectively target the minority who choose to abuse the benefits system by committing benefit fraud, while trying to avoid placing excessive checks and controls on the majority who honestly and accurately represent their needs for social security assistance.

Overall, my performance audit found that the Ministry has good systems, policies, and procedures for preventing, detecting, and investigating benefit fraud. However, the discovery of a major benefit fraud in late 2006, involving one person creating more than 100 false identities, is a reminder to all public agencies that the risk of new and sophisticated fraud methods is always present. Public agencies need to be increasingly vigilant to counteract the risks of fraud, and be open to using advanced ways to prevent, detect, and investigate fraud.

The Ministry is introducing a number of changes in response to the major benefit fraud, which should strengthen its systems, policies, and procedures to counteract benefit fraud. I will be interested to monitor how the Ministry implements its new approach during the next few years.

I thank the staff of the Ministry for their assistance and co-operation during our audit.

K B Brady
Controller and Auditor-General

9 June 2008