THE NSW Department of Planning had “ad hoc” oversight and monitoring of an energy bill emergency support scheme that cost the state more than $20 million in 2017/18, said a report commissioned after Upper Hunter charity volunteers issued $7300 in energy vouchers to family members over four years.
There was little in the way of regular oversight of the Energy Accounts Payment Assistance (EAPA) scheme and the only monitoring breached a ministerial direction to cap allocations to more than 300 providers across the state, said the Deloitte report delivered to the department in May and released after a freedom of information application.
The payment of $7300 to family members of an Upper Hunter charity group from March, 2013 was not picked up by the charity until 2017 and reported to the department.
But despite finding other cases where providers issued EAPA vouchers to family and friends, Deloitte found it was unlikely they were being “materially misused through maladministration” and vouchers were being issued “consistently with the aims” of the scheme.
The EAPA scheme provides vouchers in multiples of $50 to people experiencing financial hardship and struggling to pay their energy bills, with annual caps that can be breached under exceptional circumstances.
The EAPA scheme distributed more than $15.72 million in vouchers in 2016/17, and $14.65 million between July, 2017 and February, 2018 based on 54,705 transactions. Deloitte estimated a 2017/18 total of nearly $22 million.
The Deloitte report found the department’s “ad hoc” oversight was a factor in “significant variances” in the level of EAPA support provided to customers in similar circumstances around the state which impacted on the fairness and equity of the scheme.
There was no guidance to EAPA providers, mainly charities, on how to determine the level of support to people under exceptional circumstances, Deloitte found.
“The existing EAPA guidelines lack clarity and guidance on defining what an exceptional circumstance is and how it differs from baseline financial hardship,” the report said.
A comparison of different providers found people unable to pay their energy bills because of similar health complications received varied responses ranging from one applicant receiving $500 in vouchers towards $2648 in bills, another receiving $1500 for $2655 in bills and a third receiving $4000 in vouchers towards bills of $4442.
Three jobless people received varied responses from different providers, with one receiving $1000 in vouchers towards $2846 in outstanding energy bills, a second receiving $400 towards $3626 in bills and a third receiving $1000 in vouchers from a different provider towards $4993 in outstanding energy bills.
There was a “risk that eligible customers are not supported fairly, leading to promotion of ‘shopping around’ behaviour by customers”, Deloitte found.
“Customers may try to identify an EAPA provider who would provide them with the maximum amount of EAPA assistance, or approach several EAPA Providers with the same bill in the hopes of obtaining more than their allowable assistance. This can lead to more aggressive behaviour from customers as they may believe they are being treated unfairly.”
Deloitte recommended “enhancement of the control environment from both the department and the EAPA providers’ perspectives”.
Customers may try to identify an EAPA provider who would provide them with the maximum amount of EAPA assistance, or approach several EAPA Providers with the same bill in the hopes of obtaining more than their allowable assistance.Deloitte review
In 84.4 per cent of exceptional circumstance cases examined by Deloitte there was no evidence to justify exceeding the capped limits.
“The EAPA guidelines only state that the customer’s current energy bill needs to be sighted, but does not provide any detail and examples of supporting documentation that is required from the customer to evidence the financial hardship status,” Deloitte found.
The report found the lack of records maintained by most EAPA providers reduced the transparency of the eligibility of customers and “exposes the EAPA program to undetectable misuse”.
“Compliance with the EAPA guidelines cannot be independently validated for some elements and follow up of potential misuse is unlikely to be effectively substantiated,” Deloitte found.
The Department of Planning said it drafted the guidelines to allow EAPA providers discretion about exceptional circumstances because they were “best-placed to determine what level of support and how frequently support is provided”.
The report was released after a freedom of information application by one of the three former staff.
A department spokesperson said Deloitte was chosen because “they have the experience in finance, financial analysis and systems, and risk management and assurance analytics”.
The department accepted the need for more guidance and clarity on how to determine financial hardship and exceptional circumstances; more training for providers and better documentation, and was implementing an extensive work program in response to the Deloitte recommendations, the spokesperson said.
It had established a digital EAPA system, a dashboard allowing real-time monitoring by the department and release of an online training module in early 2019.