Labour and Social Security Ministry disbursed over $700 million without eligibility criteria, says auditor general report

The Ministry of Labour and Social Security (MLSS) has presided over a financial assistance programme that disbursed over $700 million to persons without any funding limits or eligibility criteria for beneficiaries, the Auditor General's Department (AuGD) has uncovered.

The Short-Term Poverty Alleviation Project was originally approved as a four-month intervention in December 2013 to address rising poverty levels.

It was to provide financial assistance through entrepreneurial and compassionate grants to vulnerable groups.

However, it continued without Cabinet approval and unchecked, disbursing $726.4 million between 2017 and 2024, according to the auditor general's report performance audit of the government's social welfare regime.

The report was released on Tuesday.

The auditors revealed significant lapses in oversight, with no established eligibility criteria, benefit limits, or mandatory social assessments to validate the needs of beneficiaries under the project.

“The lack of established eligibility criteria, benefit limits, and social worker assessment created an environment of little or no transparency,” the audit report stated, adding that the problem exposed the project to persons who were not in need, undermining the project's impact.

It added: "The absence of these basic guidelines also heightened the risk of misuse of funds and potential mismanagement.

This underscores the need for prompt remediation, by MLSS, to ensure responsible stewardship of resources and targeted support to only genuinely vulnerable individuals."

Between 2017 and 2024, ministry records showed payments to 32,399 beneficiaries.

The number of beneficiaries skyrocketed by 160.5 per cent, moving from 3,345 in 2017–18 to 8,717 in 2023–24.

The audit found repeated payments to 867 individuals totalling $54 million, with some beneficiaries receiving as much as $1.5 million.

In one instance in 2021, it said an individual received three separate payments of $500,000 on the same day.

Another beneficiary was paid $907,500 across five transactions between 2020 and 2024.

Despite these large disbursements, the AuGD said the ministry failed to validate the recipients’ needs or verify whether funds reached genuinely vulnerable individuals.

“The absence of these basic guidelines heightened the risk of misuse of funds and potential mismanagement,” the report warned.

The report also criticised the project for duplicating efforts already covered by the ministry's Rehabilitation Programme, which provides similar financial assistance through a more structured process.

Both initiatives offer compassionate, emergency relief, and entrepreneurial grants, among others.

“This duplication of efforts created inefficiencies and added unnecessary costs,” the report noted, while calling for a consolidation of overlapping programmes.

In response, the ministry admitted shortcomings in the administration of the project.

“The MLSS accepts that the mechanisms for the administration of the STPA need to be strengthened,” the ministry said, adding that it has since implemented mandatory needs assessment forms as part of a new procedural document.

However, the ministry cited resource constraints.

“The MLSS does not have the Social Worker capacity to verify an additional over 30,000 grants,” it noted.

It said there are plans to consolidate its grants programmes by the 2025- 2026 financial year, which will end in March 2026.

The audit report underscored the urgent need for robust monitoring systems and clear operational guidelines to prevent further misuse of public funds.

It criticised the MLSS’s failure to conduct any review of the STPA’s effectiveness over its decade-long operation.

“Significant sums were disbursed under this programme without any monitoring to determine the impact,” the report stated.

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