ATO fraud surveys found wanting

The Commonwealth Auditor General has identified shortcomings in the way the Australian Taxation Office (ATO) manages serious non compliance, including the accuracy of surveys designed to collect data on fraud.

The Australian National Audit Office (ANAO) noted that it was a requirement of the Fraud Control Guidelines that government agencies, including the ATO, collect information on fraud in response to a survey and provide it to the Attorney-General’s Department.

It said there were a number of problems with the accuracy of the ATO's response in recent surveys and that audit office testing indicated an understatement of alleged incidences of fraud.

Further, it said that a new definition of fraud contained in the 2007-08 survey and the ATO’s interpretation of the definition resulted in different types of incidences being reported compared to previous years.

“This revised reporting basis resulted in far fewer reported allegations of potential fraud (498 in 2007-08 compared to over 3,000 in the two previous years),” the ANAO report said.

The Audit Office made a number of recommendations to the ATO to help it address the shortcomings that had been identified. The ATO has agreed to six of the report’s recommendations and agreed in part with the remainder. It noted that it had already been implementing changes consisted with the general tenor of the recommendations.