PPS fraud risk ‘greater than ever’

THE State spending watchdog yesterday warned the Exchequer was facing its greatest-ever fraud risk due to continuing failures in the Government’s personal public number system (PPS).

The PPS system, riddled with inaccuracies and bogus applicants, was estimated to cost the State anywhere between €25 and €50 million yearly when a review was carried out six years ago.

However, with the population rapidly increasing and the introduction of e-Government, Comptroller and Auditor General John Purcell warned that exposure to fraud was a greater danger than ever.

“As we move forward into an e-Government environment, the PPS number assumes even greater importance because it will be used as a basis for the delivery of a whole range of public services to people.”

Speaking before the Oireachtas Public Accounts Committee (PAC) yesterday, Mr Purcell said that in addition to facilitating social welfare fraud, PPS numbers can “also be used to circumvent the work permit system and could possibly facilitate the opening of bank accounts”.

“The change in the nature of the population consequent on the booming economy and the expansion of the in the economy EU has thrown up control risks of a kind and scale that hadn’t previously been encountered,” he said.

However, since first identifying the issue in 2004, Mr Purcell said the Department of Social and Family affairs had acted to improve the situation although more work was needed to overcome “historical shortfalls”.

He also concluded that another matter - unauthorised welfare payments by An Post - had now been improved. In 2003, Mr Purcell found An Post was being paid by the department for unauthorised welfare payments valued at €2m over a three-year period.

“More effort could have been made by the Department and An Post to improve cooperation and reduce the exposure to a minimum,” he said.

Labour Finance spokesman Joan Burton said she was concerned that the PPS system could be open to target by international criminal gangs - a suggestion that was rejected as being without foundation by department secretary-general John Hynes.

He also confirmed the department was about to embark on a fraud study of the PPS system to establish the current state of abuse. At present there are 5.9 million PPS numbers, 271,000 of which were issued last year. Many of those numbers, it emerged, are obsolete, redundant, fraudulently obtained or duplicate.

Others, including Fianna Fail’s John McGuinness, PAC chairman Michael Noonan, the Green Party’s Dan Boyle and Socialist Party leader Joe Higgins, also criticised the department’s past failures and called for better inspection systems.