A review led by Australia's former top cop told the National Disability Insurance Agency its methods for fighting fraud were "no longer sufficient" as the scheme's massive growth left it increasingly exposed to organised crime, dodgy providers and unscrupulous families.
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ACM, publisher of this newspaper, can reveal the agency last year ordered an independent review of its intelligence and investigations functions after senior executives questioned if it was able to manage the "growing fraud risk" surrounding the scheme.
Fraud has emerged as an issue in the NDIS, the nation's most senior intelligence official estimating up to 20 per cent of funds were being misused.
The scheme is forecast to cost almost $34 billion this financial year and grow to $50.3 billion in 2025-26, making it one of the biggest pressures on the federal budget.
NDIS Minister Bill Shorten believes cracking down on fraud is among the keys to slowing the scheme's surging costs, with last month's budget committing $126.3 million toward a new cross-agency taskforce to address fraud and serious non-compliance.
Mr Shorten told The Canberra Times the Coalition had been "asleep at the wheel" on scheme fraud, but declined to put a figure on the percentage of funds he believed was being rorted.
The agency last year paid Deloitte almost $300,000 to conduct the review, which was led by former AFP commissioner and firm partner Andrew Colvin.
The report was handed to the agency on March 10, in the dying days of the Morrison government.
The Canberra Times is revealing details of the review as it launches "We need to talk about the NDIS", a new series examining the future of the nation's disability safety net.
This masthead has obtained a heavily redacted copy of the report under freedom of information laws.
The review acknowledged the agency had made significant investments to help detect and respond to fraud since its inception in 2013, highlighting the work of a dedicated fraud taskforce and a new compliance response team.
However, it found methods used in the past were no longer "sufficient" as the scheme rapidly grew and the "intensity of opportunistic fraud and serious organised criminal activity" became more pervasive".
"With the estimated growth of participant costs forecasted to increase to $59.3 billion in 2029-30, the NDIS is increasingly exposed to the growing risk of highly sophisticated, complex serious and organised crime, criminal and opportunistic fraud perpetrated by providers, plan managers, partners in the community, participants, and unscrupulous family members," it said.
The report said with the agency focused on transitioning people onto the NDIS, "insufficient" attention had been paid to building a "robust control environment" to police a scheme as big and complex as the one it has become.
The review's recommendations were redacted, along with other sections on its assessment scope, methodology and implementation roadmap.
The review's cover letter, which was released, said its recommendations would support the agency to maximise its return on investment and preserve the scheme's integrity.
In explaining its decision to refuse The Canberra Times access to the findings, the agency argued disclosure could undermine its ability to detect and prevent fraud.
Mr Shorten was astounded the former government didn't make more noise about rorting of the scheme, saying the issue was raised with him everywhere he went around Australia.
He said while organised crime and "opportunistic" behaviour were part of the problem, one of the biggest issues was the lack of supervision of invoices.
For example, a provider could be charging a participant weekend rates for services it delivered on a weekday - and getting away with it.
"I used to say they [the former government] were padlocking the front door [to prevent] legitimate people entering the scheme ... but they had the welcome mat at the back door [for people to commit fraud," Mr Shorten said.
"That was wrong. It's not that they had the welcome mat out ... there's no back wall. There's nothing - it's just, 'Go in and help yourself'."
The former Coalition government was responsible for setting up a fraud taskforce in 2018, which focused on high-risk and serious criminal activity targeting the scheme.
Australian of the Year and disability advocate Dylan Alcott last week said people ripping off the scheme could "go and get stuffed".
"You are literally taking away from a neurodiverse kid getting care," Mr Alcott said.
"You're taking away someone with a high level disability having a shower, you're not taking away us having fast cars and stuff like that. That is not what it's about."
Dan Jervis-Bardy
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
