Disability provider denies $1m fraud claim

A disability services provider which has been ordered to repay $1 million in overpayments to the Ministry of Health says the Government department's audit process is fundamentally flawed.

Deals, based at Porirua, north of Wellington, has been told by the ministry it must hand back $1 million it had been paid for 51,000 hours of services the ministry claims it never delivered to clients.

However, company chairman Dennis Smith denied his organisation had made any fraudulent claims.

It came down to a dispute with the ministry over what were considered legitimate contracted hours, he told National Radio.

Mr Smith said the auditors did not count all the legitimate outputs allowed for under the terms of their contract with the ministry.

"They counted the direct service delivery hours and excluded every other hour that we are contractually obliged to deliver, such as audited accounts, financial systems, complaints systems," Mr Smith said.

"None of those hours were counted in that audit. How can you have a business audit and not take into account legitimate contractually required costs?"

Mr Smith also claimed that the audit methodology used by the ministry for Deals was brand new.

But Health Ministry disability services manager David Crisp said today he believed the methodology used was a "reasonably standard ministry tool".

The audit process came down to a "simple counting of inputs and outputs", he told National Radio.

"We have a report that says the inputs and outputs don't match."
Deals was in no position to repay the ministry $1 million, he said.

Mr Crisp said the ministry would be speaking with Deals' clients and getting their views on the matter before deciding on its next move.

The dispute comes after another organisation, Focus 2000, was recently found to have overclaimed $2.5 million.

- NZPA