Investigation reveals shocking NDIS business sales on Facebook, Gumtree

Vulnerable Australians are at risk as NDIS businesses are traded like commodities online, with some sellers guaranteeing ways to bypass crucial safety checks. SEE THE VIDEO.

Exclusive: Ready-made NDIS businesses are being flogged for as little as $45,000 on Facebook Marketplace and Gumtree – spruiked as a way to make mega profits off the $1 billon-a-week system designed to care for the most vulnerable Australians.

A cottage industry has also developed to help beat the troubled system’s audit process with whistleblowers revealing that some auditors are being paid to give passes to businesses.

Scores of NDIS companies are being peddled as turnkey-ready with no black marks, no bad reviews. They are sold with registrations, documentation and regulatory requirements to start trading immediately.

Just one seller of ten contacted by this masthead was concerned about whether or not a buyer had any experience in disability services.

NDIS businesses for sale on Facebook.

Questioned about background checks, one private seller hawking his cleanskin business for $100,000 said “I don’t need anything. If you are interested, you can buy it”.

Just 14,000 out of the more than 190,000 providers in the NDIS are registered, so buyers of a Gumtree cleanskin business get a veneer of superior credibility.

They also have access to an extra slice of the market: the 30 per cent of NDIS participants whose packages are managed by the National Disability Insurance Agency. Taxpayers fund these agency-managed segments to the tune of more than $1 billion a month.

Additionally, registration puts the buyer of a cleanskin business on the path to providing some of the most expensive scheme offerings, such as specialist disability accommodation.

Insiders say that if buyers cut corners and run the business incorrectly prior to the initial audit after 18 months of operating, they can either engage a consultant to ensure they pass, or find an auditor willing to give a false clean bill of health.

The NDIS was established 12 years ago as a social service to fund life-changing support for people living with permanent disabilities. Businesses and individuals became providers, receiving funding to deliver those supports, such as therapies, personal care, and assisted living arrangements.

However, the amount of money available in the NDIS – $52bn a year and rising – has also attracted some unethical operators.

Buying a pre-registered business is a way for NDIS providers to dodge lodging hundreds of documents to the government and the standard waiting 18 months for approval.

Anyone looking to buy an NDIS cleanskin company does not need any qualifications or experience.

Last Monday, there were 22 cleanskin NDIS businesses for sale on Facebook Marketplace in the Sydney region, an additional 15 in Melbourne, and three each in Adelaide and Brisbane. A further 43 businesses were up for sale Australia-wide on Gumtree.

And according to a number of these online ads, the more disabled the client, the higher the profit margin.

One Sydney-based seller said: “If you’ve got a client with a $200,000 plan, you’re making about $60,000 to $70,000 per client.

“If you’ve got a $2m client, you’re making a lot more. [The profit margin] depends how many services you are providing.”

National Disability Services CEO Michael Perusco said quality providers usually make negative margins.

But that doesn’t stop some brokers and private sellers from boasting NDIS registrations to care for the “highest-paid groups”. These comprise severely disabled clients with large plans that include lodging allowances, such as specialised disability accommodation and supported independent living.

Of the 10 inquiries to social media sellers by this masthead, only one emphasised the importance of providing quality care to disabled people, and no one asked who the prospective buyer was or whether they had any experience in the disability sector.

And while auditing should safeguard against bad behaviour, some businesses hire consultants to ensure they pass the audit, while others get a clean report from auditors who for a fee are willing to turn a blind eye.

NDIS businesses listed for sale on Gumtree.

Angela Harvey, a former NDIS auditor who now works as a consultant helping providers improve services, said some consultants offer pass guarantees.

In some cases they will rewrite policies, add dummy information, create a folder for the auditor with perfect documentation, and offer a cheat sheet of likely questions and appropriate answers.

Ms Harvey said some auditors allow the provider to pick which participants are part of the official assessment.

“The practice standards are that loose and paper based that it’s not hard to offer a 100 per cent guarantee,” she said.

Another auditor said they were aware of groups of auditors, providers, immigration agents, training colleges and accountants working together to cheat the system.

One online seller told this masthead “you have to be very stupid” to fail an audit.

Even if a provider does get caught in the audit process, there’s nothing to stop them from buying a new cleanskin company and starting all over again.

Mr Perusco said the situation is an “example of the need to have better stewardship”.

A spokesman from the NDIS Quality and Safeguards commission said that providers who register businesses and do not actively provide services are closely monitored.

“Any NDIS providers advertising their business in contravention of the NDIS code of conduct can expect to face compliance action,” they said.

“The [Commission] will take firm action against providers and auditors who do the wrong thing.”