Social Services Shredded Records In Fraud Cover-Up


Tribune Business Editor


Shredding documents to cover up fraudulent activities was “a matter of routine” at the Department of Social Services, the Auditor General has revealed.

The Government’s chief financial watchdog, in his audit of the 2014-2015 fiscal year, warned that “impaired internal controls” and “a severe breakdown” in management oversight had exposed Bahamian taxpayers to the potential loss of millions of dollars from graft and corruption.

The report, tabled in the House of Assembly on Wednesday, suggested that the department’s weaknesses and failings were also undermining its mission to assist poor and low income Bahamians.

Among the key findings were:

• The Auditor General’s investigation was “impeded” by a “senior accounts staff member” ordering the destruction of various accounting records, including cheques, vendor statements and receipts. Among the documents to be shredded were those from 2014 and 2015, the years under examination, as well as for the period 2010 to 2013.

• The Department of Social Services processed a fictitious invoice from a medical provider, and ended up paying for a non-existent procedure on a dead person. It had some 255 days to check the service was performed, but failed to do so.

• Some $4.237m worth of vendor payments were made without the necessary executive management or financial officer signatures, further exposing the Department of Social Services to loss and fraud.

• “Collusion” between staff at a local food store and Department of Social Services personnel enabled the latter to use food coupons, intended to help poor and low-income Bahamians, to purchase groceries for themselves.

Disclosing its in-depth findings, the Auditor General’s Office said the instructions due to destroy key accounting documents had come from a “senior accounts staff member” “with the knowledge” of their supervisor.

Suggesting that this breached the Public Service Act’s record retention requirements, the report said: “These acts perpetrated by accounting staff members reveal that there are obvious weak internal controls over the custody of accounting records within the accounts department and a severe lack of accountability around the same.

“As... where a staff member instructed the removal of pertinent medical batches from the accounts department of the Department of Social Services, it appears that the act of removing or destroying official information is a matter of normalcy among the staff members within the Department of Social Services accounts department.”

Describing the document shredding as “not tolerable”, the Auditor General’s report said the loss of accounting records “could undermine the integrity” of the accounts department and “increase the risk of fraud and corruption” to the organisation as a whole.

“Instructions were given to destroy government documentation to conceal a fraud relating to food coupons and medical assistance due to collusion between several staff members,” the report concluded.

“Egregious acts were allowed to occur within the Department of Social Services because of the reliance on particular staff members, the lack of a reconciliation process and a breakdown in management oversight. We further recommend that an investigation be conducted into this egregious act around the preservation of pertinent government documentation.”

The Auditor General’s report also noted that 14 medical batch files, and other items, were missing after a cleaner was instructed to “clean out a staff member’s desk” and place the contents into a black garbage bag to be handed to the department’s human resources unit. The person who made the request was later placed on administrative leave.

Calling on the Department of Social Services to approve assistance requests in “timely” fashion, and verify that medical providers had performed the necessary work before payment, the report identified one “fictitious invoice”.

“Although this related to an approved medical procedure, it was noted that the client’s condition declined and, according to the medical provider’s records, the client was ineligible to receive the procedure,” the Auditor General’s Office found.

“It should be noted that from the date of the request to the deposit of the payment, 255 days elapsed where no oversight or follow-up occurred to ascertain that the client was not only considered ineligible for the service but also died. However, payment was still processed in the name of this client.

“It is evident that the Department of Social Services has exposed itself to an instance of fraud, and a probable instance of graft. Invoices received for services rendered, or products delivered, should be verified and not just paid because it was issued by a legitimate source,” the report continued.

“If invoices are not properly verified as to the authenticity, the Department of Social Services could be expending public funds on numerous undetected fictitious transactions.”

Turning to the food coupon scam, the Auditor General’s report found that Department of Social Services had used preprinted vouchers for Stop N’ Shop Grocers - a store that no longer existed. Its name had been crossed out and replaced by an existing business, exposing a lack of control and security around the issuance of food coupons.

“Printing food coupons for businesses that are closed presents opportunities for individuals to manipulate the system and could lead to graft,” the report warned. “Through apparent collusion, staff members were able to perpetrate a fraudulent act using coupons intended for the disenfranchised.

“This act by these staff members is an indication that one staff member was given too much authority, apparently, with minimal to no supervision. This act may also be indicative of a more complex scheme being perpetrated with public funds.”

The Department of Social Services has since shifted to debit cards, trying to move away from the manual food coupons. However, the Auditor General was not finished yet.

For it warned that payments to food stores and other vendors were being issued without proper scrutiny from the Department’s executive management, which the report suggested “may be tantamount to gross negligence”. It also said some employees were being paid below the minimum wage.


DDK 6 months, 1 week ago

"Dr Sands said The Bahamas spends almost $900m on healthcare annually. Some $306m of this comes from the Government's Consolidated Fund, with $80m spent on health insurance for MPs, teachers, police officers and other public servants."

Suppose these Social Service employees receive free medical insurance from the tax payers?


proudloudandfnm 6 months, 1 week ago

And not one soul charged, convicted and jailed....


sheeprunner12 6 months, 1 week ago

Who were the Social Services Ministers between 2010-2 and 2012-15??????? ........... Let them answer for this malfeasance before the Public Accounts Committee now.


bogart 6 months, 1 week ago

DESE STORIES NOW COMMING TO LIGHT......GIVE DA AUDITOR ONE HIGHEST....NATIONAL AWARD..!!!!!!!!............ERRYBODY SEEMS TO KNOWS WHAT GOING ON..DOING...NUTTIN....,!!! JAIL THE WHOLE LOT....!!!!!!.......PORE BAHAMIANS SHOULD NOT BE BEGGING FOR ...2 PIECES OF UNIFORM ...FOR LIL CHILLRENS.....POREEST.....OF DA POOREST....POREST OF DA POOREST......BAHAMIAN PEOPLE SHOULD NOT BE SUFFERIN....ERRY POLITICIAN TALKJNG CUPBOARDS BARE......EVEN ....GOVT SO SAD ....PORE PEOPLE SUFFERIN....DEYS ...REMOVE ...... VAT ....ON BASIC...FOOD......FOR PORE BAHAMIANS....Plenty bare back chillrens in ghetto...see dere ribs.....PLENTY CHILLREN GOING TO BED HUNGRY........come to find out Some govt staff memners in Social Services..."fraudulent act using coupons intended for the disenfranchaised"......well monkey onkle...never seen nothin like dis yet !!!!


geostorm 6 months, 1 week ago

LOCK the entire lot of them up! What a sad state of affairs. What really bothers me is that this is just one government entity/ Department. Imagine the theft and loss that takes place in other ones. How can we return ourselves as a country to fiscal responsibility?


sheeprunner12 6 months ago

Imagine the Big Three ......... Education, Health, and National Security!!!!!!


TheMadHatter 6 months, 1 week ago

"...over the custody of accounting records within the accounts department and a severe lack of accountability around the same."

Of course there is no accountability. It is not needed when there are no consequences anyhow. VAT could simply be raised from 7.5% up to 12% to cover these losses.

Oh wait. My bad. They already did that.

Seriously though, each one of them should get 90 days in jail and thank Jesus summer is over - cause dem cell is be oven in July (keep that a secret though, we don't want U.N.Human Rights to find out.)


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