AML / CFT: New Zealand bank on alert as Earthquake Commission warns of fraud in Christchurch
New Zealand's Earthquake Commission which was set up to handle claims in and around Canterbury as it struggled to deal with months of earthquakes and aftershocks says that it has already paid out more than NZD1,000,000 million. But, it says, it has also uncovered numerous instances of dubious and even downright fraudulent invoicing and contracting.
The Earthquake Commission (EQC) has been criticised for slow payments to some builders and other contractrors. But, says its CEO Ian Simpson, the majority of contractors are paid, in accordance with established business practice, by the 20th of the month following the month in which the invoice is received.
But, he says, some invoices have raised suspicions and those have been held back for further investigation. Media reports of inefficiency are, he says, false.
Money is rushing out of the Commission's doors: “There are just under 700 accredited contracting firms working under the Fletchers structure which equates to a workforce of 3500 people. Approximately NAD8 million is being paid to these contractors weekly,” Mr Simpson said. “We are dealing with thousands of invoices. In some cases the information provided by contractors is insufficient, but the charging is genuine.”
But that's not always the case: " we are concerned to find some companies are submitting invoices for work that, on investigation wasn’t done, or wasn’t done to a high enough standard. We are also getting invoices with hourly rates that are greatly inflated," Simpson said
“We have worked closely with the national bodies for both builders and plumbers and have determined a satisfactory hourly rate for the scale and nature of work to be undertaken. When we receive invoices where that hourly rate is inflated it is incumbent upon us to ask questions,” Mr Simpson said. "As a government agency we have a duty to be able to show prudent use of funds.”
Approximately NZD 4 million worth of invoices remain subject to investigation.
EQC has received nearly 370,000 claims for the 13 separate events since September, including more than 22,000 for the aftershock on 13 June.
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