State departments overspend by $2.5bn amid claims of uninvestigated Health fraud
Auditor-General Martin Thompson has highlighted shocking financial mismanagement across state departments, warning debt will surge to $18,056 per Tasmanian by 2029.
State government departments have overspent by nearly $2.5bn over the last three years amid unrealistic budgets, a lack of expenditure control and alleged multimillion dollar fraud, the state’s Auditor-General says.
The Audit of State entities identified allegations of multimillion-dollar fraud within the Department of Health which were said to have not been properly investigated.
Auditor-General Martin Thompson expressed concern at runaway spending by government departments, which is contributing to the state’s worsening bottom line.
“Over just the last three years, departments spent $2.42bn more than what they had
originally budgeted,” his report said.
“The Department of Health made up the majority of the overspend in terms of dollars, overspending $1.37bn in the three-year period.”
Among the findings were allegations of two serious frauds.
“Testing by Audit Tasmania identified that the Department of Health does not have an
adequate fraud control framework in place,” the report noted.
“Two alleged frauds identified internally occurred during 2024-25.
“One fraud had an estimated cost of at least $2.73m and relates to incorrect billing, while the other relates to time sheet fraud and is still under investigation by the Department of Health. “We found that these frauds had not been investigated in either a timely or adequate manner, and at the date of drafting this report, appropriate actions are yet to be completed by the Department to address these matters.”
In a submission in response, the Department of Health denied that any fraud had occurred.
“Any claims of a lack of governance in relation to an alleged fraud or the quantification of any financial loss appear not to be supported, particularly in light of the fact that an internal review identified the issue and the Department has had no financial loss from the billing practices identified,” it said.
“I strongly request that reference to the ‘alleged frauds’ and these claims be removed from the draft report.”
The report said that across the government sector, there was “a lack of control of expenditure within budget, setting of unrealistic budgets, significant deficits over the past four years, with more deficits planned in the budgeted forward estimates.”
As a result, net debt would continue to increase “at a rapid rate over the forward estimate period to 2029.
Again, the Department of Health was singled out for special mention.
“We identified that current performance reporting is not providing a useful insight into the drivers of overspending at the Department of Health,” the report said.
And it pointed out the overspending was adding to the growing levels of debt on the state’s balance sheet.
“The current General Government Sector net debt of $5.05bn represents a debt of $8,767 for each Tasmanian, and the forecast 2029 debt level of $10.40bn represents $18,056 for each Tasmanian,” it said.
Originally published as State departments overspend by $2.5bn amid claims of uninvestigated Health fraud
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