The Department for Work and Pension's (DWP) Work Programme, which launched in the middle of last year, was exposed to significant risk of fraud and error because it was not supported by an appropriate IT system, according to a National Audit Office report.
DWP's Work Programme, which replaced all previous welfare to work schemes, offers support to unemployed people who have been claiming Jobseeker's Allowance to help them get, and keep, jobs.
The report reads: "At the time the programme went live across the UK [the IT systems] had not been upgraded to incorporate the programme's requirements.
"The pace at which the department introduced IT for the programme was out of step with the introduction of the rest of the programme. The department decided not to have all of the IT in place for the programme's start because it considered that waiting would have negated the benefits of the programme's early adoption."
The DWP had intended to start work on upgrading its IT systems to support the programme in December 2010, to complete by January 2012, but this was delayed by four months and instructions were not issued to suppliers until April 2011.
Consequently, the delivery of a complete system has been pushed back until autumn 2012, despite the programme going live in July 2011.
The report indicates that because the programme launched before the appropriate IT systems were in place, DWP "could not complete an automatic check against other records that somebody was in work and off benefits, and could not make a payment for a successful job or sustainment outcome; nor could it generate complete management information".
The delay has also exposed DWP to fraud and error as it does not have the ability to verify the figures claimed by contractors who are attempting to place and keep people in work. The systems needed to check these figures will not be in place until March 2012, by which time the NOA estimates that the DWP will have paid out £60m to contractors.
"The department plans to complete retrospective checks on all job outcome and sustainment payments, and to adjust subsequent payments to prime contractors," reads the report.
Finally, DWP has also failed to achieve its targets for implementing IT to support the collection of management information relating to the Work Programme.
DWP has had to nearly double its spend on introducing this system. "The department's budget for introducing the management system was £4.6m. However, it underestimated the complexity of the project, and the budget now stands at £8.6m."