Management of the Multi-Purpose Taxi Program
1. EXECUTIVE SUMMARY
1.1 Introduction
The Multi-Purpose Taxi Program (MPTP) commenced in 1983 and
plays an important role in providing transport to those with a
severe and permanent disability to access all aspects of community
life.
Over 185 000 people are members of the program.
Seventy-five per cent of them are over 70 years of age. The program
is administered by the Victorian Taxi Directorate (VTD) and in
2008–09 has an annual budget of $43.7 million.
To be a member of the program, a person must:
- have a severe and permanent
disability that prevents them from using public transport
unaided
- be a permanent resident in
Victoria
- meet certain financial
criteria (unless they permanently use a wheelchair).
Members are eligible for a 50 per cent fare subsidy of up to $30
per trip, with a cap of $1 090 per year. Certain categories of
disability, such as a member who permanently uses a wheelchair, are
exempt from the subsidy cap.
Following significant growth in program membership and costs to
the state, changes to the operation and management of the program
to maintain its long-term sustainability were announced in late
2003.
The MPTP has a history of fraud usually by taxi operators. Fraud
prevention and control is therefore one of VTD’s key
priorities.
This audit focused on determining:
- whether projections of
service demand are soundly based
- the effectiveness of
organisational arrangements for monitoring and assessing service
demand
- the extent to which
projected demand and cost pressures are likely to affect the
long-term sustainability of the program
- the degree to which robust
controls are in place to safeguard against fraud.
1.2 Findings
1.2.1 Service demand and costs
VTD has the necessary organisational arrangements to monitor and
assess service demand. VTD has systems, such as the Taxi Client
system, which provides detailed information on members and their
use of the program. While VTD uses this information to compile
monthly, quarterly and annual reports, VTD needs to give more
attention to longer-term service demand projections.
The current cost pressures on the program are primarily driven
by factors such as the rate of increase in taxi fares as well as
the balance of active and non-active members in the scheme. While
the program has traditionally underspent, the level of
underspending is declining. The cost pressures have been offset by
a decline in member use of the program and the number of trips
undertaken.
Demographic changes such as the ageing of the population and
increased incidence of disability indicate an increase in the pool
of potential MPTP members. It is therefore prudent for VTD to
commence discussions with the Australian Bureau of Statistics (ABS)
on improvements in the specificity of disability data available to
assess likely effects for the program and its budget.
Changes introduced to the MPTP in 2004, including means testing
of new applicants and the introduction of an annual subsidy cap,
have achieved their objective of bringing membership growth and
service demand under control.
1.2.2 Controls against fraud
VTD has concerns about fraud and has renewed its focus on
implementing controls to mitigate these concerns. An Audit and
Investigations Unit has also been established to support this.
The immediate challenge for VTD is to develop a fraud control
plan based on a systematic assessment of identified risks and the
development of associated mitigation strategies. This will provide
a more strategic approach to fraud prevention and control
priorities.
Fraud detection practices need strengthening with the
introduction of fraud awareness training and clearer direction
about the recovery of public moneys. In the case of Project
Longmile, a VTD investigation into suspected fraud between July
2004 and May 2005, an estimated $800 000 of projected annual
savings from suspected fraudulent claims was identified. Warnings
were issued and, in a number of cases, disciplinary action was
undertaken. There was no evidence of any recovery action.
VTD indicated that the purpose of the project was to send a
strong message to the taxi industry that fraud will not be
tolerated, not to recover public funds. Audit believes that similar
projects in the future should include a documented and approved
rationale for the approach adopted.
In terms of external agency engagement, VTD should finalise its
memorandum of understanding with Victoria Police to provide clarity
and consistency about information exchange, liaison and
investigations in cases of suspected fraud.
The internal and external reporting of fraud requires attention
as:
- VTD does not report
instances of suspected fraud to the Department of
Transport
- annual reporting does not
include details of strategies to safeguard against fraud,
consistent with the Australian Standard 8001–2008 Fraud and
corruption control
- the department has not
reported cases of alleged fraud to either the Minister for Finance
or the Auditor-General as required by the Ministerial Directions
under the Financial Management Act 1994.
1.3 Recommendations
Forecasting service demand and
costs
VTD should:
- undertake longer-term MPTP
service demand projections to examine the extent to which changes
in assumptions or input variables will affect the program and its
budget (Recommendation 3.1)
- develop operational
guidelines and procedures on service demand projection methodology
particularly given the heavy reliance placed on a small number of
key staff to undertake this function (Recommendation
3.2)
- explore with the Australian
Bureau of Statistics the potential for refinements in their 2009
Disability Survey to enhance future service demand planning
(Recommendation 3.3)
- more systematically capture
qualitative feedback from stakeholders and directly from members as
an input into service demand planning (Recommendation
3.4).
Controls against fraud
VTD should:
- develop a MPTP fraud
control plan based on a risk assessment consistent with the
Australian Standard 8001–2008 Fraud and corruption control
(Recommendation 4.1)
- finalise its memorandum of
understanding with Victoria Police about information exchange,
liaison and investigation for suspected cases of fraud
(Recommendation 4.2)
- improve reporting of
suspected fraud by providing relevant details to the Department of
Transport and comply with the requirements of the Minister for
Finance’s Direction 4.5.4 (Recommendation
4.3)
- develop appropriate system
controls as well as regularly audit data in the Taxi Client system
to assure its integrity (Recommendation
4.4)
- provide fraud awareness and
investigator training to staff on a needs basis
(Recommendation 4.5)
- further enhance guidelines
and procedures for conducting investigations to
address:
- critical facets
of the investigatory process such as interviewing
witnesses
- recovery of
moneys through civil action
- suspected fraud
by non-taxi drivers (Recommendation
4.6).
- regularly monitor the
existing approach to prioritising investigations to confirm it is
well documented and robust (Recommendation
4.7).
RESPONSE provided by Secretary, Department of
Transport
I note your findings that the Victorian Taxi Directorate
(VTD):
- has the
necessary organisational arrangements to monitor and assess service
demand
- that
changes introduced to the Multi-Purpose Taxi Program (MPTP) in
2004, including means testing of new applicants and the
introduction of an annual subsidy cap, have achieved their
objective of bringing membership growth and service demand under
control
- has
concerns about fraud and has renewed its focus on implementing
controls to mitigate these concerns. An Audit and Investigations
Unit has also been established to support this [renewed
focus].
I accept all your recommendations and advise that all are
either in various stages of development or are being
implemented.