The IGT’s review into the ATO’s fraud control management follows after the Senate Standing References Committee on Economics called for a review last year, following revelations of Operation Elbrus and the allegations that former ATO deputy commissioner Michael Cranston abused his position as a public official in the tax fraud case.
In its report released yesterday, the IGT has not found any evidence of systemic internal fraud or corruption within the ATO, with sound systems in place for managing risk of internal fraud.
Further, the IGT has made a total of 13 recommendations to the ATO, who have agreed with all of them in whole or in part.
“One of the areas identified for improvement concerns the ATO controls to appropriately identify and manage conflicts of interest, as inadequate management of such conflicts can lead to risk of corruption. In this regard, following Operation Elbrus, the ATO has made significant improvements to its staff instructions and guidance; however, further improvements are required,” the report said.
“Another area identified as requiring improvement relates to senior ATO officer intervention in individual cases. A recommendation has been made to improve the transparency of such interventions by clearly specifying when they may occur, requiring appropriate documentation of all resulting actions in an accessible form and periodically reviewing compliance with such policies.”
The IGT report also examined the ATO’s management of risks posed by external fraud, including the Tax Office’s tax evasion referral (TER) process which involves receiving and acting on intelligence provided by the community.
While TERs have been subject to complaints by dissatisfied taxpayers who made referrals to the ATO, the IGT has concluded that TERs are a valuable source of information for detecting external fraud and has called for the ATO to formalise and document consistent processes, as well as better inform the public on resulting outcomes to “enhance public confidence and thereby improve the quality and quantity of TERs”.
The Institute of Public Accountant general manager of technical policy, Tony Greco had earlier told Accountants Daily that he suspects the review is a ploy to regain the public trust in the ATO.
“Even if it comes out that everything is fine, I think from a public trust point of view, given the profile of the characters involved, it’s probably something the government just wants to do to reassure the community they can have trust in a major agency like the ATO,” Mr Greco said.