It is well-known that the NDIS encourages people with disabilities and/or their nominees to self-manage their NDIS funds.  Since 2016, there has been a 900% increase in the number of people self-managing, and the 2017-2018 NDIS Annual Report states there are approximately 24% of all NDIS participants now self-managing.

The Auditor-General report, issued on 25 June 2019, said that while the National Disability Insurance Agency’s approach to fraud was “largely comprehensive”, some risks have been identified not only for the transition of provider registration into the NDIS Quality and Safeguards Commission but also for self-managed participants.  Data from January 2019 noted that there were 216 allegations of misuse of NDIS funds related to self-managed participants and/or their nominees which equates to less than 1% of the total of people who self-manage their arrangements.

The Auditor-General report explained the NDIA’s strategies and controls for self-managed arrangements, including responses to the self-managed participant internal audit findings on fraud control.  The key risks for self-managed arrangements appear to be related to:

  • recording expenses;
  • validating expenses;
  • high risk spends;
  • spending above the person’s budget;
  • eligibility to self-manage; and
  • issues with the portal.

Other risks include situations where self-managing individuals use non-registered providers or where there have been low verification processes for NDIS payments.

Research conducted in 2013 about the ways self-managing participants evaluate their arrangement over time, along with later studies about self-management practices, has found that there are a number of other risks apart from the usual focus on financial risk and the likelihood of fraud.  For example, some self-managed participants were vulnerable to the ways their contracted staff imposed their own requirements on the participant who was left without any real recourse to address the problem. Isolation from professional advice was an issue and, in several cases, family members as well as participants had not only lost their homes but had been significantly penalised due to their lack of understanding about legislative and regulatory obligations, particularly in areas related to Fair Work and Work Health and Safety.  The assumption for self-managing individuals is that they somehow automatically know about these obligations, even when they may never have had the responsibility for employing and managing staff before or required to be accountable for managing large sums of money.

Many self-managing individuals continue to believe that the NDIS funds are their own personal funds and that no-one has the right to examine how these funds are spent.  Unfortunately, there are people who have taken advantage of these funds to add to their own income and, in some cases, not provide any support to the person with a disability in line with what the NDIS Plan requires.   It is not clear at the present time just what sorts of professional and robust advice is provided to self-managing participants about their obligations and the requirement for what constitutes small business management practices to account for the NDIS funding.

The Australian Federation of Disability Organisations CEO Ross Joyce has stated, ‘We would also like to see independent audits undertaken in this regard on a regular basis, to ensure that the integrity of the NDIS is maintained, protected and that people with disability can continue to receive all of the approved supports that they require’. No arguments should be made about this statement! However, researchers have observed that audits often inhibit rather than open-up debate about improving supports to people with disabilities. In fact, what self-managing participants need is support in understanding the long-term issues arising over years as well as practical advice and support from knowledgeable practitioners as their situations, needs and capabilities change through time.

The question remains as to how independent audits can be conducted for an increasing number of self-managed arrangements, particularly when these people may not have been exposed to any form of review or audit conducted by the NDIS before.  Who will conduct these audits?  How often should they occur?  How will self-managed participants be supported to prepare for these audits?  What happens for people who don’t appreciate the benefits associated with these audits or who persistently don’t comply with what is required?