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Immigrants may have slipped into New Zealand illegally because of gaps in systems for discovering identity fraud, the Government has admitted.
An Auditor-General's report yesterday said identity fraud was one of the "most pervasive developments in fraud in recent years" and cases were on the rise.
"A person using a false identity can pose significant risks to the country, including financial, terrorism, health, legal or criminal risks."
It said there was a significant risk posed by a backlog of 384 cases of fraud waiting to be investigated by the Immigration Service's 11 investigators, including 185 cases which were a high priority.
While there were systems to deal with it, the service was hindered by staff and technology resourcing, inadequate training, a huge backlog in fraud investigations, inconsistent record-keeping, and a failure to collate information to review and assess the success of its strategies.
The report - "Department of Labour: Management of immigration identity fraud" - made 15 recommendations, including better training, more staff for the fraud investigations unit, the electronic collection of data, and more assessment of cases to see how widespread the problem was and how successful Immigration's strategies were.
Immigration Minister David Cunliffe said there could have been cases which compromised security. He has ordered the department to meet all 15 recommendations although some could take a long time to complete and would be costly. "Clearly when a system is not perfect there is a gap between where you are and where you want to be. The Government's clear intention is that the gap will be closed as soon as possible and I will hold the department accountable for that."
Mr Cunliffe said the report was "useful" and work was already under way, including the training of staff, as part of a broad reform of immigration laws and policies.
More investigators would be appointed to the fraud unit as soon as possible, but he could not say how many.
National immigration spokesman Lockwood Smith said the backlog in fraud cases was concerning.
"Identity fraud in immigration is very serious given the current international climate. Yet clearly the Department of Labour is struggling to do the job and it's the Government that allocates the resources and it's the Government who must get serious about it."
The report noted that Immigration also had to allow for the successful resettlement of refugees and attract good skilled migrants, NZ First immigration spokesman Winston Peters said there had been warning signs that such changes were required.
"I would have thought September 11 would have spurred anyone to do it. What amazes me is despite numerous warnings over a long period of time, they were not picked up on. They have not put the personnel, the technology and resources in place to properly scrutinise the people coming into the country." The report said such fraud could include the use of false names, or failing to declare other names a person could be known by, possibly to hide something in that person's history.
It noted that the Department of Labour had reported a rise in cases of people either lodging multiple refugee claims under different identities or returning to New Zealand under a different name after being removed.
Since August 2005, there were 257 suspected false identities referred to the police.
