Issue link: https://maltatoday.uberflip.com/i/1508267
SOCIAL protection pro- grammes channel a large amount of public resources, providing opportunities and incentives for corrupt and fraudulent practices. Integri- ty challenges in social security systems involve corruption in defining eligibility and enroll- ing beneficiaries, collusion, political patronage and clien- telism, conflicts of interest, corruption in pension invest- ment funds and fraud. We had a clear example of the above scenario when, in De- cember 2021, it was revealed that former Labour MP Sil- vio Grixti was implicated in a scandal that allegedly enabled hundreds of people to receive disability benefits to which they were not entitled. Medical documents were provided for people to apply for benefits averaging €450 per month intended for severe disabilities they do not suf- fer from. It was a major scan- dal consisting of mass fraud, stealing, and abuse through social services. That scandal involved the creation and us- age of fraudulent certificates that showed the signatures of medical professionals who had either never seen the 'patients' indicated on the certificates or knew that the individuals were not suffering from the indicat- ed conditions but signed re- gardless. It was a sophisticated, planned, and thought-out sys- tem involving a large number of people entrusted by the law to prevent those abuses from happening, but instead they complied with and facilitated the abuses. It is time to consider intro- ducing mechanisms that can successfully combat the prev- alence of error, fraud and corruption within our social security network. We need to develop good governance guidelines that provide a broad framework for anti-corrup- tion activities, framed around principles of accountability, transparency, predictability, participation and dynamism. A number of tools can also be implemented by various pro- grammes, such as hotlines and portals to report abuse, ran- dom sample spot checks, infor- mation campaigns and train- ing, and data matching. Our social security system refers to the redistribution by the state of resources across ages, classes and occupation- al groups in the form of social programmes like public pen- sions, family allowances and benefits for the unemployed. While the scope, size and eligi- bility for benefits vary greatly, social protection programmes channel a large amount of pub- lic resources, representing a high average of our gross do- mestic product (GDP). Social welfare expenditures can rep- resent between 20% and 30% of overall government spending. No social security system is immune from fraud and corruption. Given the large amounts involved, the losses of taxpayers' money due to fraud and corruption can be poten- tially considerable. While there is no accurate data to assess the scale of the problem, it is esti- mated that a significant per- centage of overall expenditures on social security are lost to er- ror, fraud and corruption. We must identify the driv- ers of fraud and corruption challenges in social security services. There are a number of contextual factors that can provide fertile ground for cor- ruption. The intensity of cor- ruption risks varies greatly de- pending on circumstances and our country's legal and institu- tional frameworks. Generally, I contend that corruption risks in our social security services are due to procedural weak- nesses in grant administra- tion and systemic weaknesses, such as ill-functioning audit systems, weak capacity, poor oversight and controls, inade- quate training and the relative- ly low pay of social protection workers. Politicians and administra- tors may be unwilling to ex- pose fraud and corruption within the social security sys- tem, either because they might be implicated in some fraud- ulent schemes or because it could undermine the credi- bility and support for the pro- gramme. Exposing fraud and corruption may also raise un- welcome scrutiny from exter- nal accountability bodies such as parliament or the National Audit Office. Lack of auditing capacity and controls and inadequate moni- toring or reporting procedures can lead to a breakdown or override internal controls, low detection rates and ineffective punishment of corrupt offi- cials. The complexity of the benefit system can also be considered a major driver of fraud and cor- ruption, providing opportuni- ties and incentives for corrupt and fraudulent behaviour. The multitude of benefits and rules, the number of eligibility re- quirements, the lack of clarity and possibility for cross-juris- dictional claims and the con- fusion among administrative staff and claimants can be as- sociated create potential risks for corruption. Complex and vague eligibility requirements, frequent chang- es in eligibility requirements and administrative procedures of programmes, a lack of trans- parency and the vagueness of operating procedures intro- duce some discretion in the in- terpretation of the rules, mak- ing it easier to circumvent and exploit them. As it is, the design of our so- cial security setup leaves room for the government's undue interference in the manage- ment and decisions within the system. This is especially true since the department does not enjoy budgetary independence. In such a situation, there is a risk that financial decisions are taken for political or strate- gic goals other than managing risks and maximising the net return, as the government is in a better position to coerce the board or governing body to fol- low its directives. It may be that the department has limited administrative ca- pacity to verify eligibility or de- tect fraudulent or corrupt be- haviour. Staff is possibly either inadequate in number or in- adequately trained and remu- nerated. In addition, the wage structure and guidelines of the civil service may not attract and retain qualified staff. Lack of support and training, inade- quate or obsolete IT systems, and problematic information management combined with excessive caseloads, exacerbate error, fraud and corruption challenges. We must defeat any possibili- ty for politicians and parties to design policies aimed at ben- efiting selective groups with a range of patronage-oriented practices, including log-roll- ing, constituency service, and intensive interest group in- volvement in policymaking, whereby politicians offer ben- efits to selective groups of vot- ers in return for their votes. Mark Said Social security: minimising fraud risk 4 maltatoday | SUNDAY • 24 SEPTEMBER 2023 OPINION OPINION Mark Said is a veteran lawyer Former Labour MP Silvio Grixti