Ageing DHS system fails to catch welfare scams

An independent review into the Department of Human Services’ (DHS) voluntary bill paying service has called for extra IT funding to ensure that customers are protected from unscrupulous service providers.

Centrepay, a voluntary service which allows real estate agents, utilities and various household goods providers to directly deduct bills from welfare payments, was criticised last year when a handful of vendors were found to be abusing the vulnerability of welfare recipients.

Zaam Rentals had its contract with the DHS cancelled after it came to light that staff were door-knocking in indigenous communities to promote loans on radically overpriced laptops and computers through Centrepay. Financial Counselling Australia (FCA), the author of the report, said it was one of many instances of unconscionable conduct that had been facilitated by the program.

Fairfax reported in 2012 that 1700 other Centrepay contracts had been terminated by the DHS since 2010.

Anna Budul’s independent review of Centrepay, handed down this week, found that an ageing transaction system allowed many of these incidents to go unnoticed.

“Centrepay transactions take place within the much broader Centrelink IT system, which is decades old, transactional and rules based.

“Information management for risk management purposes via timely data extraction and analysis is currently not possible, nor is risk management via strategic compliance oriented data analytics,” it said.

Budul criticised the Department for under-resourcing the administration of the program and has called for “increased investment in Centrepay specific IT and other infrastructure”.

She acknowledged that the DHS was currently in the process of replacing the system with a more modern SAP-based application called Customer First, but added that Centrepay’s unique challenges would still not be met unless the Department paid the program special attention during the IT overhaul.

Budul’s report formally recommended that the DHS take “strategic cognisance” of Centrepay in the scoping of the SAP replacement as a matter of priority because “it is difficult to reverse IT logic once implemented”.

It has also recommended that the new system be built with enhanced data analytics capabilities to allow the Department to quickly and accurately identify the kinds of compliance issues identified by FCA and swiftly act upon them.

The DHS has yet to formally release its response to the report, although Minister for Human Services Senator Jan McLucas did indicate in a media release that “the Department supports the focus of the majority of the recommendations”. Caretaker conventions mean any formal decisions relating to the review will be delayed until after the election.