The massive fraud uncovered in the Department of Education and Skills' Individual Learning Accounts fiasco has been partly blamed on the department's failure to follow specific government guidelines on fraud prevention.
The Ombudsman, Ann Abraham, said the DfES had failed to follow the advice contained in Government Accounting and the Treasury leaflet Managing the Risk of Fraud.
She said that as a result of this and other ‘serious maladministration’, students whose accounts were misappropriated and incurred costs, otherwise eligible for a discount under the scheme, should have these reimbursed by the department.
And she ruled that although it was ‘not unreasonable’ for the DfES to rule out a national compensation scheme for business losses suffered by training providers when the scheme was suddenly scrapped in November 2001, those who could demonstrate some or all of their students had properly applied before the suspension of the scheme and whose registration had not been logged because of administrative failings should also be compensated.
The Parliamentary Commissioner for Administration’s report is the latest into the scandal which resulted from some learning providers using their access into the scheme’s administrative computer system to access unused accounts and fraudulently log claims against them.
There were also a failures to check training standards and claims of over-selling by providers in a generally botched scheme.
Abraham delivered her findings after investigating two class complaints, one from a student who ended up having to pay to make up some of the missing discount himself when it was discovered his account had already been used by someone else, and one from a training provider company which lost thousands of pounds and was forced out of business by the closure decision.
Under the scheme, the first million adults to register qualified for £150 towards the cost of the course of their choice.