June 04, 2012
The Telegraph reports that three whistleblowers have submitted evidence of abuse of U.K. taxpayers' money by a welfare-to-work contractor to the Public Accounts Committee. The contracting firm works on government contracts that pay it £2,000 for placing an unemployed person into a long-term job. One of the whistleblowers, the former head of audit at the contractor, alleges that there was a "culture of secrecy" around the work program, as well as "complete absence" of oversight at the company, and "huge barriers" that prevented him carrying out his audit role. The former auditor also alleges that fraud was systemic and involved staff creating fictitious jobs and faked documents to confirm successful placements of the unemployed.
The government recently cancelled one work program contract after an audit found significant weaknesses in the contractor's management systems. A Department of Work and Pensions spokeswoman said there were now strong controls in place and described the latest allegations as unproven.
One of the central allegations in this case is that a contractor responsible for managing multimillion dollar arrangements to secure jobs with employers operated within a "culture of secrecy" with respect to how its arrangements with employers were structured as well as monitoring whether jobs were actually provided. One way this perception could be addressed is by establishing a strong corporate governance and oversight structure that, for example, requires regular oversight and performance monitoring by the responsible policy department and its ministers rather than leaving this task to the executive management of the organization with whom the government has contracted. Clear policies regarding values, ethics, and fraud can be implemented and monitored for compliance. It also is important to establish a system or process to undertake follow-up audits or to follow up on whether senior management's agreed-upon actions in response to audit recommendations were fully implemented.