‘Weaknesses in internal controls’: $96m Covid jobs loans will not be recovered

Taxpayers won’t recover $96 million in job support loans the state government made during the pandemic.

Taxpayers won’t recover $96 million in job support loans the Queensland Government made during the pandemic.

The likely irrecoverable debt has been laid bare in an Auditor-General’s report that also found problems with how staff were handing out the Covid loans that significantly raised the risks money was wrongly paid out.

The State Entities 2021 report examined the Queensland Rural and Industry Development Authority’s (QRIDA) delivery of $926m to small business, individuals and farmers during the “unprecedented” number of 10-year loans granted in 2020 and 2021.

It found “weaknesses in internal controls”, including that conflicts of interest were not completed by recruitment panel members, applications were approved for amounts that exceed the amount they were allowed to approve and there were risks of fraud and errors occurring and not being detected.

There were 10 internal control deficiencies identified, five of which were deemed significant.

“We found a lack of documentation supporting a merit-based appointment process,” the report said, adding that increased the risk of inappropriate contracts being entered into and compromised value for money.

Taxpayers won’t recover $96 million worth of the loans.

Payment files were not encrypted or password protected and “this increased the risk of fraudulent payments, as it allows the opportunity for users to make unauthorised changes” and redirect the money elsewhere, it said.

Of the money paid out, $71.7m has already been paid back.

The estimate of Jobs Support Loads that would not be repaid was $96.4m, with $1.6m deemed irrecoverable in 2020-21.

It said temporary employees were rapidly recruited and trained to meet program demands, with staff numbers jumping from 118 in June 2019 to 201 full-time workers a year later.

But training policies weren’t always adhered to and internal controls were not adapted to guard the significant amounts of money being paid out compared to in the past.

The auditor-general said QRIDA had implemented 8 of 10 recommendations made for improvement and was working on the other two.

The report also confirmed people were recruited to the QRIDA who were “closely related to existing employees”.

A probe by the Crime and Corruption Commission into these appointments has been previously dropped, finding no evidence of corrupt conduct.