Part 1: Summary
1.1 Audit findings and opinions
1.1.1 The assessment and approval of subsidies
1.1.1.1 The assessment and approval criteria
When The Social Welfare Bureau (IAS) evaluated the subsidy applications, they have not defined detailed instructions on how to quantify the social welfare funds that might be involved in the applicants’ “Bank Deposit and Cash”, for example the Wealth Partaking. As a result, each Social Service Centre of IAS individually adopted different counting standards that might lead to different results for the same type of cases; the case might be approved in one centre but rejected in another. Eventually, it might lead to the subsidies not being allocated to those who have real difficulties and fail to ensure the fairness and impartiality in the process of the evaluation and approval for the subsidies.
1.1.1.2 The inspection mechanism
Although IAS has formulated a written “Guidelines” to regulate the specific demands of the inspection mechanism for verifying the applicants’ qualification, actually there were some differences between the written requests in “Guidelines” and the verbal requests from IAS to its staff, for example, the “Guidelines” requires that checking the property registration status of applicant from Financial Services Bureau (DSF) is only required under suspicious conditions, however, IAS requests verbally that if the applicant is 18 years old and apply subsidy in first time, the above information should be checked from DSF. At the same time, the relevant verbal requests reach frontline staffs after many times of oral communication. After a period of time, executors will fail to grasp the meaning of the relevant verbal requests clearly and even forget it, so that each of staffs enforces the inspection work according to their own understanding and standards. Out of 20 cases and 10 cases respectively drawn from two centres as samples, 16 cases and 3 cases missed being carried out one or more inspection procedures or the collection of document in the percentage of 80% and 30%.
Besides, social workers are currently responsible for the subsidy assessment, however, the main responsibility of social workers and the training they received are to carry out “social work”, therefore, as they evaluate the applications, they possibly trend to judge from the information which is obtained through daily contact with applicants rather than to execute the inspection mechanism strictly; at the same time, since the workload in certain centres is heavy and social workers also need to handle a lot of administrative inspection work, it is anticipated that the risks of making mistakes and failure to run the work by rules because of the workload will be increased. The audit report just reflected that centre A had nearly ten times as many cases as centre B which caused more cases of centre A not to be executed in accordance with the inspection mechanism, and also it did not have enough objective information to judge whether the applicant was qualified. After examining these samples with the inspection mechanism, the Commission of Audit (CA) discovered that 12 cases of centre A and 2 cases of centre B have not been checked the contribution record through the Social Security Fund’s website, and of the 12 unchecked cases in centre A, 9 cases were supposed to be taken follow-up actions but actually it did not. Besides, on the aspect of “Rental Allowance”, CA found that two cases of centre A and centre E were double received “Rental Allowance” but IAS did not notice.
On the other hand, some coordinators were unable to fully review the applications according to the re-inspection mechanism because of heavy workload, and the inconsistent documents order in applicants’ file caused difficulties in review, as well as the sampling and inspection mechanism conducted by the head of Family and Community Service Department did not work efficiently. Ultimately, the inspection mechanism failed to ensure a fair and justice assessment result under the ineffective operation.
1.1.2 The supervision on subsidies distribution in cash
1.1.2.1 The amount of subsidies distribution in cash
In 2013, the average amount of subsidies allocated by IAS in cash was approximately 4,352,711.82 patacas per month. The allocation of substantial cash would pose potential risks to the department management, and the audit result revealed that quite a part of cases actually could use the way of non-cash (For instance cheque) to receive subsidies with conditions, in order to reduce the rate of cash payment, however, IAS did not choose this way.
1.1.2.2 The distribution and management mechanism for the subsidies in cash
For some special cases, such as beneficiaries who are intellectual disabled or gambling addictive or physically handicapped, IAS would suggest the beneficiaries of general subsidies to deposit their majority of monthly subsidies in IAS, and then those subsidies will be disbursed to them in several times by the way of cash in order that social workers can take follow-up action closely to beneficiaries’ situation. As to non-regular subsidies, social workers hand over the funds to the beneficiaries after withdrawing it for beneficiaries from the Cashier Section of the headquarters. However, IAS currently lacks a set of monitoring mechanism for regulating this situation, and also IAS does not require any centres to submit the signed documents from beneficiaries or to report to the Cashier Section of the headquarters after the beneficiaries received the cash subsidies, therefore, IAS fails to know the actual distributing situation and the surplus of cash in the deposited general subsidies as well as the non-regular subsidies drawn by social workers, and to monitor and assure that the beneficiaries can receive the cash subsidies timely. Besides, both these subsidies actually belong to the cash possessed by IAS, but do not reflected in the cash balance of IAS account.
1.2 Audit suggestions
IAS should:
Review the existing criteria of assessment and approval, to develop an unified approach, for example, which items need to be exempted and how to count the exempted amount when counting “Income” or “Bank Deposit and Cash”, as well as the relevant legal foundation, etc. Then explicate these rules in the Guidelines, to ensure applicants under the same situation, may have equal treatment, in order to guarantee the approval of subsidies is based on the fair and justice principle.
Establish an appropriate and effective re-inspection method by reviewing the existing re-inspection mechanism, such as optimizing the documents order of applicants’ file, to enable the re-inspection workers can effectively check whether the established inspection procedure is carried out by inspection workers or not. At the same time, minimize all kinds of inherent risks, such as staffing shortage, by the suitable arrangement on human resources and operation as far as possible, to ensure the thoroughly implementation of the established inspection procedure .
Consider reducing the amount of cash in possession, in order to control risks reasonably, especially for the cases which are qualified to receive subsidies in non-cash way, IAS should consider to apply other methods for subsidies distribution, like bank transfer or cheque, etc.
Regarding the funds held by IAS, they must be handled and distinguished according to their nature. Whether of its own resources or the funds kept on behalf of third parties which belong to the cashier activity, the collection, payment and balance of the funds should be executed and recorded according to legal and proper accounting practice.
Build a proper monitoring mechanism and optimize the accounting record for subsidies distribution in the way of cash, for reflecting the situation of subsidies distribution and surplus timely and completely, and for assuring that the subsidies are disbursed to the beneficiaries on time or taken follow-up action.
