The NDIA continues to provide people with disabilities and their family members or nominees with many opportunities to self-manage the participant’s funds. From what I have seen during the past year, this continues to be an attractive option for many people.
In 2019, I wrote a newsletter about some of the risks with self-managed arrangements. In recent months I have received a number of queries about what I wrote. For example:
- Who conducts the audits of participants who self-manage? Are they [the auditors] independent of the NDIS? What is the process of these audits? Is there a right of appeal if you disagree with the auditor?
- The issue of family members/disabled people incurring financial loss was identified as part of the report you prepared for the NDIS (….) and as part your involvement in the research/study conducted by Griffith University. Did you/the University/authors report these findings to the NDIS/NDIA or other corresponding responsible government departments/agency/officials? If not, why? Did the NDIA / corresponding responsible agency/gov department already know of such adverse impact on participants/family members?
- You mentioned that these participants lost their homes mainly because of penalties and terminating staff. Was there any other reason? What actions did the government, responsible agencies/third parties, government departments take in order to a) assist the people affected, b) rectify the devastating effects of such policies/legislation/implementation of such scheme on the individuals concerned?
- Under the current NDIS self-managed or managed funds/plans, has any participant lost his/her home (or any other asset) or incurred any financial loss as yet?
- Was it common knowledge that people self-managing (i.e. self-directing) would be exposed to such financial risks, legal risks and comply with such onerous administrative requirements? Who else was/is aware of the risks/situation?
These are very real concerns for people. They, like so many other people, want self-managed arrangements to work and to be sustainable over time. These arrangements provide many important options for people with disabilities to live the life they want. But there are obligations attached to this practice which also need to be clearly explained.
A review of the NDIA Annual Report for 2018-2019 Annual Report indicates the NDIA continues to carefully monitor service providers as well as self-managed arrangements. Details on page 106 of this Report state:
‘Claims from providers and self-managed participants can lead to payments that are inconsistent with Agency guidance, even where no deliberate fraud is intended by the claimant. To mitigate this risk the Agency has progressively rolled out a compliance and assurance program aimed at substantiating a statistically selected sample of claims lodged by providers and self-managed participants. Errors identified can be either critical (having a potential negative financial impact) or non-critical (having no, or a potential positive, financial impact).
In 2018-19, the review also included a full year of self-managed participant payments for the first time with 19 critical errors identified. After extrapolating the 19 critical errors over the total population of self-managed participant payments made in 2018-19 the accuracy rate was 96.2 per cent. The estimated overall financial impact of the self-managed participant error rate was $32.5m. All critical errors are subject to further validation, with recovery action undertaken where required and considered economical, in accordance with the Agency’s Debt Management Procedures. The Agency’s compliance and assurance processes are in addition to the NDIS Fraud Taskforce established by the Commonwealth in 2018-19 to prevent fraudulent claims being lodged’.
Some people have been very concerned about what the auditing role could be for their self-managed arrangement. My research into this area has found that audits for these situations are conducted by the internal NDIS auditors. The audits are conducted on a random basis – a bit like the random tax audits undertaken by the ATO – and contact is made with the participant to obtain evidence of invoices that match the requests for funding. The NDIS auditors seek evidence to ascertain if the funding has been spent as it was intended and that the participant can justify the expenditure. While the NDIA has some very broad information on their website, I think it would be helpful for more information to be included to explain:
- The importance of attaching invoices to each funding request.
- How an audit would be conducted e.g. how the participant would be notified, timeframes, etc.
- The types of actions that would be taken if the audit finds that the funds have been incorrectly or perhaps fraudulently expended i.e. are participants given time to rectify the matter?
- The right of appeal process.
In response to some of the queries I have received, I have guided people to contact the NDIA directly or via email to email@example.com to discuss their concerns. Some people are comfortable to make this contact whereas others are not. What I have seen, though, is that the majority of people want to ‘do the right thing’ but need more information to help them with what they need to do. As the number of people taking up self-managed arrangements grows, this is an area that needs more attention and for more participant voices to be heard.
1. Do you assist people with disabilities to successfully self-manage their arrangements? What information has been essential for people to know?
2. Have you seen self-management evolve over recent years? What have been stand-out points during this time?
3. What strategies do you use to assist people with disabilities to consider self-management in the first place?