Qld Health boosts data matching following fraud

Queensland Health is attempting to patch deficiencies in its budgetary controls after one of its staff members exploited the holes to the tune of nearly $17 million over four years.

Between 2007 and 2011, Hohepa Morehu (Joel) Barlow used his position within Queensland Health’s finance branch to authorise $16.7 million in payments to a company registered in his own namemanually manipulated the department’s vendor mater database to obscure the link.

Queensland Health has now embarked on the path towards patching some of these deficiencies. The department outlined to iTnews its new and improved data matching process, which ensures any dodgy entries in its vendor database will be picked out on daily basis.

A report which described the incident as possibly “the single largest fraud ever committed in the Queensland public sector” has found that a number of very straightforward deceptions were able to foil the department's old data matching processes.

“[The fraudulent company] HIC was not identified due to the false vendor name, the fact that Barlow used a different bank account from his nominated payroll bank account, and the variation between the way Barlow recorded his address in his employee file and the vendor address,” the state’s Crime and Misconduct Commission (CMC) stated in a report tabled in parliament this week.

Barlow himself subsequently admitted to investigators that a single search for the company on the ABN look-up site would have uncovered the link between himself and HIC.

As a postscript to its investigation, the CMC said the data matching procedure had since been upgraded, and the process of linking employee data to the vendor master database is now able to pick up “fuzzy” matches in information such as addresses, like the one missed in Barlow’s case.

Queensland Health’s acting chief financial officer, Mark Davey, told iTnews the matching now takes place on a daily basis at the department.

At the end of the business day tables of vendor details are automatically stripped out of Health’s Finance and Materials Management Information System (FAMMIS), and ABNs and GST statuses are sent to the Australian Securities and Investments Commission to be verified against the official records.

Queensland Health has also deployed Caseware Monitor fraud detection software to process the comparison overnight, with any matches arriving in the email inboxes of the Vendor Master Team at the start of the next working day.

“In addition to the ABN check, automated checking also is performed daily for duplicate vendors (done on a weighting scale using address, bank account ABN etc), stale vendors, multiple blocking/unblocking of vendor status and multiple changes in bank accounts,” Davey said.

“If the matter is not actioned after a period of time it will escalate to a more senior manager.”

The CMC report also found that Barlow was able to exploit the unfolding crisis around the department’s failed payroll system replacement to hide his activities from senior staff.

Barlow was able to pay his own company nearly $140,000 out of a discretionary grant fund while “senior QHealth management and senior Finance Branch staff were focused on rectifying the difficult issues surrounding this system”.