Aged care bombshells dropped in Govt audit hearing
Aged care overpayments and AI governance under scrutiny
- $368m overpaid: Aged care subsidy errors revealed in government inquiry
- Legal breach: Payments process breached Constitution funding rules
- Process failure: Quarterly reconciliation conflicted with real time requirements
- AI oversight: Calls for stronger governance of automated assessment tools
A Government inquiry has revealed $368 million in aged care overpayments, and questioned governance of the Integrated Assessment Tool.
The Inquiry into Commonwealth Financial Statements 2023-24 and 2024-25 by the Joint Committee of Public Accounts and Audit heard there were 11 breaches of Section 83 of the Constitution, which states money can't be withdrawn from the Commonwealth's Consolidated Revenue Fund except where appropriated by law.
Department of Health, Disability and Aged Care Chief Financial Officer David Hicks revealed the Department overpaid aged care providers about $368 million in aged care subsidies and fees.
The Department first identified the breach in 2022-23.
The breach occurred in relation to the "quarterly arrears review process" which was "inconsistent with the legislation" which required "near enough to real time reconciliation", of either next day or weekly - not quarterly, David said.
"Essentially what we do is make payments and then there'd be this reconciliation process on a quarterly basis. And that would screw up any payments in either direction. So the net result was right for the provider, but that running that process quarterly was inconsistent with the legislation. So we had a process issue there.
"So, these are payments that were still due to those providers, but they were payments that would have been encompassed in this quarterly reconciliation instead of the actual timeline that those reconciliations should have been done.
"So the net result was still the right amount landed with the providers, but a certain amount was captured in this group that should have been done on a different time scale."
This discrepancies in the timeframes meant the Department breached section 83 of the Constitution, he said.
Automation of aged care assessments under scrutiny
Fay Flevaras, Chief Digital Information Officer with the Department of Health, Disability and Ageing, was questioned about how the Department ensures the Integrated Assessment Tool is performing its role correctly.
When Committe Chair Labor's Josh Burns asked how the Department ensures algorithm decisions are correct, Flevaras took the question on notice.
Auditor General Dr Caralee McLiesh PSM said the Government's increasing shift to automation requires employing "really strong governance" that is "commensurate with the risks of adopting emerging technologies and AI".
"There are risks both ways. So risks of adopting these technologies and also risks of not adopting those technologies, particularly when they are increasingly being used by stakeholders of entities, clients, providers, contractors.
"So it's really about making sure that governance is fit for purpose to manage risk, because there is such rapid development in this area of the technologies of the adoption.
"What we're seeing is that sometimes the governance and assurance arrangements are not keeping up with the the use of AI. There are many good practices in place ... But I think the key question is, is the governance keeping pace to manage the the risks effectively?"
