MEDIA STATEMENT

3 October 2007

HNZC to enhance processes of Investigations Unit

Housing New Zealand Corporation is enhancing the processes of its Investigations Unit following a review by the Corporation’s Board, deputy chairperson Lope Ginnen announced today.

The review has found the Investigations Unit is contending with a significant increase in the number of suspicions of fraud or dishonesty referred to it.

“Potential cases referred to the unit are up from 101 in 2002 to 723 last financial year. This is likely to be a result of raised awareness among frontline staff of the need to ensure suspicions of fraud are properly assessed and, if necessary, fully investigated,” Ms Ginnen said.

“The growth in referrals has outstripped the capacity of the Investigations Unit. Delays are occurring which must be addressed to ensure public confidence is retained in the state housing system.”

The Board of Housing New Zealand recognised and began work on these issues late last year.

The Corporation has:

 Appointed a new General Manager to oversee the Investigations Unit and the internal audit functions of the Corporation;

 Begun enhancing the processes of the unit;

 Sought a further assessment of the unit by the Deputy Chief Executive of Specialist Services at the Ministry of Social Development and Employment comparing and benchmarking the work of the unit against similar bodies in other organisations.

“These measures are being implemented as part of wider restructuring of the Corporation steered by new chief executive Dr Lesley McTurk. I have confidence they will result in significant improvements to the Investigations Unit,” Ms Ginnen said.

“The biggest difficulty the unit has had is sorting through the growing volume of referrals and filtering out those that lack evidence, do not warrant investigation, or are more effectively dealt with by other means.

“At the start of September, there were 1164 referrals on the books of Investigations Unit, many of which were awaiting an initial assessment. However, 87 per cent of the suspicions referred and reviewed by the Investigations Unit last year did not lead to a crown debt, a finding of fraud or a prosecution.

“The volume of referrals is obscuring the number of solid cases in which a finding of fraud or a prosecution is likely and therefore worth the expense to the taxpayer of a formal investigation,” Ms Ginnen said.

“Housing New Zealand is introducing an improved framework to help the Investigations Unit screen incoming referrals, and decide on how to deal with them.

“Those referrals requiring investigation will remain with the unit, those lacking documentation or evidence will either be closed or returned to the managers of each housing region for monitoring, and in some cases, tenants will be required to sign statutory declarations.

“In addition, Housing New Zealand is conducting a complete review of referrals already with its Investigations Unit. This review has already identified 795 referrals that can be dealt with by other means first, or safely closed.

“By taking this approach we can more effectively target the investigations work we do, improve the use of our resources, and deliver speedier outcomes for strong cases,’ Ms Ginnen said.

“The reality is that suspicions of fraud among state house tenants account for less than one per cent of all tenants. Nevertheless, where fraud occurs we have a responsibility to deal with it efficiently, and in doing so protect the reputation of the vast majority of honest tenants.”

- Suspicions of serious fraud, such as subletting and obtaining a state house under false pretences, have been dealt with as a priority by the Investigations Unit. Only 28 cases of subletting have so far resulted in a crown debt.

- The vast majority of referrals that have come into the Investigations Unit in the past two years relate to claims tenants have not declared partners on their income related rent applications, or have undeclared income. There is a natural ceiling on the financial value of this type of fraud because the difference between an income related rent and the average market rent for a state property is limited.

- A total of 615 cases were investigated and closed last year (2006/7) by the Investigations Unit, more than any previous year.

ENDS

© Scoop Media