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Welfare-To-Work Company A4E Forced To Repay Thousands for 'Irregular' Claims

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The DWP had been alerted to allegations of fraud
The DWP had been alerted to allegations of fraud

Welfare-to-work company A4e has paid back thousands of pounds to the Government after uncovering a number of "irregular" claims.

An internal audit of its best performing recruiters found examples of claims being made for securing jobs for people despite the positions not existing, as well as other "potential" risks.

According to the BBC, the leaked report found that 4% of the claims examined were "potentially fraudulent" or included "irregular activity" and another 12% were classified as containing "reputational" or other risks.

The draft document, from 2009, showed auditors were only certain that A4e was entitled to the money the company claimed in 70% of the cases.

Its audit team examined the work of the company's top 20 recruiters, looking at one fifth of their work, totalling 224 clients.

An A4e spokeswoman said: "This draft document relates to an internal audit in early 2009.

"As part of a fundamental review into our internal systems and controls, the audit looked into a number of cases of potential risks.

"As a result we made significant enhancements to all our systems, including the appointment of external auditors.

"To get this into its proper context, while this investigation uncovered a number of areas where procedures may have been lacking, the final audit and further investigation determined that five claims were irregular and related to one former employee.

"This was reported to the DWP Risk Assurance Division, which confirmed that the action taken by A4e fully met their own audit requirements and that they considered the matter satisfactorily resolved.

"A4e repaid the value of these three claims in full, which totalled less than £5,000."

Earlier this month, the Government launched an investigation into an allegation of attempted fraud against A4e.

The Department for Work and Pensions said it had been made aware of an allegation of attempted fraud in relation to a Mandatory Work Activity contract with the firm, which is already facing a police investigation in relation to previous allegations.

A DWP spokesman: "A 2009 A4e internal audit and risk document, relating to programmes contracted by the previous government, has today been passed to the department.

"The Work and Pensions Select Committee was made aware of this audit at the time and the department later received assurances from A4e that it had not uncovered any major issues.

"When an allegation of attempted fraud was recently made in relation to a current Mandatory Work Activity contract with A4e we immediately announced a formal investigation of that allegation.

"Alongside that, we announced we would commence a separate and independent audit of our current contractual relationship with the company.

"That process is ongoing and, while the internal A4e document relates to programmes delivered by the previous government, our investigation into current contracts will ensure the issues this report raises have been fully addressed."

Margaret Hodge, chair of the Commons Public Accounts Committee, which investigates spending by government departments, has written to the DWP calling for the immediate suspension of all contracts with A4e.

She said the report revealed a "shocking catalogue of events" and suggested the company appeared to be "greedy".

"I have been saying for some time that I think those contracts should be suspended," she told BBC 2's Newsnight.

"I wrote today to the Permanent Secretary at DWP asking him yet again to suspend the contracts with A4e. He's not done so and I think this has a wider impact because if we don't sort this out, everybody will lose trust in the system as a whole."