Dorita Yiannakou
Cyprus paid Guaranteed Minimum Income benefits for years in some cases while applications were still awaiting a final decision, the Audit Office found. Its special report also found that exceptions to bank deposit and property ownership rules were approved without adequate documentation and that officials did too little to monitor recipients’ finances and assets. Serious gaps in checks, data cross-referencing, recordkeeping and the use of consistent procedures put the proper payment of benefits and the protection of public funds at risk.
The audit examined how the Welfare Benefits Administration Service manages and pays the benefit. It found persistent weaknesses in how the service reviews applications, verifies that applicants meet the legal criteria and checks whether recipients remain eligible. The gaps in administrative controls and internal oversight make it harder for the service to ensure that payments go only to people who qualify under the law.
The findings point to a risk that substantial sums were paid without checks to establish whether recipients still met the legal requirements.
The Audit Office found that in a large number of cases, payments continued for extended periods under provisional approval while applications remained under review and final decisions were delayed. Provisional approval lasted more than two years in several cases. In individual cases examined by auditors, payments continued for up to 129 months, or 10 years and nine months. The service did not systematically track outstanding cases, enforce deadlines for submitting supporting documents or send reminders to applicants. In some cases, it did not adequately document why provisional approval had been granted or why payments continued. Later checks led to cases being closed after officials found that information provided was false or that applicants did not meet the eligibility requirements.
The findings point to a risk that substantial sums were paid without the service establishing whether recipients continued to qualify throughout the period they received the benefit.
Auditors also found weaknesses in how the service assessed bank deposits and applied exceptions allowed by law. In cases where applicants held deposits well above the standard €5,000 limit, records did not adequately explain where the money came from, how much was involved, what it was for or why the applicant qualified for an exception. Auditors found similar problems in assessments of real estate, particularly when properties were subject to legal charges or when someone held the right to use or draw income from them. They also found gaps in cases involving applicants who had been declared bankrupt. The service had no standard procedure for determining whether such properties could be put to use and did not systematically obtain and use information from other authorities. The benefit’s computer system also failed to flag applications approved under exceptions, making them harder to track and review later.
The service also fell short in tracking changes in recipients’ finances, assets and family circumstances. In some cases, it did not promptly investigate changes in property values, indications that recipients might not have lived continuously in the Republic of Cyprus or questions about how their assets could be used. It did not always make adequate use of information available from licensed credit institutions and other authorities. Auditors also found problems identifying bank accounts and linking them to the relevant cases. Some applicants were referred late for disability assessments, and the service did not consistently follow up on social welfare interventions or check whether recipients had registered with the Public Employment Service.
Auditors found significant gaps in electronic case files and in the information recorded in the Guaranteed Minimum Income system. Some files were missing required documents, while others contained misfiled records or incomplete or unclear entries about an application’s history, decisions and outstanding issues. The system also lacked adequate tools to remind staff about pending matters and link case notes to the relevant documents. That made it harder to track cases and check whether decisions were correct.
The Audit Office found that the service lacked a comprehensive set of standard written procedures for every stage of the application process, including how to handle legal exceptions and complaints about possible unlawful receipt of benefits. The service had set up a team to carry out checks and created a complaints register, but limited staffing prevented the team from operating at full capacity. The service also lacked an internal audit unit, making it harder to assess whether its safeguards were working and to identify weaknesses in administrative and computer systems.
Overall, the Audit Office found that the service’s controls did not always ensure that the law was applied promptly and consistently, that decisions were properly documented or that changes affecting eligibility were identified in time. It recommended stronger administrative oversight, regular reviews of recipients’ eligibility, full documentation of decisions, better computer systems and standard written procedures. It also called for closer cooperation with other authorities and stronger internal auditing to reduce the risk of payments to people who do not qualify, protect public funds and ensure that those entitled to support receive it promptly and fairly.
