State losing millions in benefit fraud and lost taxes

THE state is losing hundreds of millions of euro each year through social welfare fraud, taxes written off and hospitals failing to recoup costs from private patients.

A new report by the State’s spending watchdog has highlighted a number of areas where government departments and state agencies have wasted or lost money.

The Comptroller and Auditor General’s 2008 examination of the public services, published yesterday, found:

* Public hospitals are on average losing the equivalent of six months’ income a year by failing to recoup accommodation costs from half of the private patients they treat.

* The Department of Social and Family Affairs is making welfare overpayments in a “significant” number of cases.

* €575m in taxes went unpaid over a single 12-month period and Revenue wrote off €129m in unpaid taxes last year.

* Almost €82m was wasted on failed information and communication technology (ICT) projects, which included €54.4m on electronic voting machines.

The report analysed practices in 24 hospitals and found half of private inpatients were not charged for their maintenance. As a result, private health insurers owed the hospitals a total of €164m at the end of 2008.

The Comptroller said this meant the state was “facilitating private medicine” but not being adequately remunerated for it.

But the hospitals said the delays in debt collection were mainly due to the fact that the system remained paper-based and individual consultants failed to sign off paperwork in time.

On the welfare front, the report indicated that the Department of Social Affairs was making hundreds of millions of euro in overpayments.

Last year, the department examined five schemes involving high risk of fraud and error, including child benefit and disability allowance, and found overpayments were being made in a quarter of the cases reviewed. A total of 35,779 cases were examined, with overpayments found in 9,312 of them. The department said it would save €255m as a result of identifying the overpayments.

Elsewhere, the report revealed that between March 2008 and March 2009, €575m in taxes went unpaid. When added to monies owed to Revenue from previous years, it brought the total of unpaid taxes to €1.8bn.

Revenue wrote off €129m of taxes and PRSI in 2008, according to the report.

The revelations came as Green Party leader John Gormley called for the board of Fás to resign following a separate report by the Comptroller which detailed a culture of waste at the state training agency.