EMILY BOURKE: WorkSafe Victoria has signed new five-year contracts with five insurance companies despite damning new reports from the State Ombudsman that found problems with the way the agencies managed payments for injured workers.
One of the companies awarded a new contract was even caught manipulating records, cheating Worksafe out of $2.5 million.
Anna Hipsley reports from Melbourne.
ANNA HIPSLEY: The Victorian Ombudsman launched an investigation into WorkSafe agents last October after a 27 per cent rise in complaints over the past three years.
What he found was alarming - files strewn over office floors, private medical details in plain sight, instances where files were sent to a third party by mistake, lost documents, poor record keeping and an outdated IT system for managing more than 56,000 claims by injured workers.
In one instance a payment of more than $20,000 owed to an injured worker was delayed by almost four months.
Greg Tweedly is the chief executive of WorkSafe Victoria. He says he knew about the Ombudsman's investigation.
GREG TWEEDLY: Yes we've been aware for a little while, yes.
ANNA HIPSLEY: But he's defended awarding new five-year contracts to five of the six companies detailed in the report.
GREG TWEEDLY: The number of problems that were found certainly need improvement. There is absolutely no problems of needing improvement. However they are still a small percentage of the total work that is done at each of the agents.
ANNA HIPSLEY: Still some serious concerns outlined especially with CGU which the Ombudsman found manipulated the figures for the timely payment of invoices effectively cheating WorkSafe out of $2.5 million worth of incentive payments and yet you've awarded them another contract.
GREG TWEEDLY: We used the contract that we had. We took the appropriate fine for them. Three of their managers are no longer working for them.
CGU have taken some changes to the systems as have we in terms of monitoring and those were taken into account for the new tender as many, many other issues were.
ANNA HIPSLEY: Why did you not put the tender process on hold or wait to award the new contracts until the findings from the Ombudsman were handed down?
GREG TWEEDLY: We didn't need to wait at all. The issue identified in the Ombudsman's report, we identified back in November last year. We exercised our rights under the contract and that made the necessary fines of CGU because of the breaches that occurred.
That all occurred well before Christmas. The tender was let in January and the tender is applicable to a period from the first of July, 2011 and beyond. So at that stage we took appropriate action at the time.
ANNA HIPSLEY: You are confident that they are not going to repeat the same problems?
GREG TWEEDLEY: We are confident that we may learn lessons from that particular occurrence and in fact we believe that that won't occur again.
ANNA HIPSLEY: But the Australian Workers Union says WorkSafe should have been more conservative when re-issuing the contracts.
Victorian secretary Cesar Melhem:
CESAR MELHEM: It's somewhat disappointing. I would have liked probably WorkSafe being a bit more careful - instead of doing five year contracts maybe doing a shorter term contract and then review these companies.
ANNA HIPSLEY: Cesar Melhem says he's confident that WorkSafe is addressing the problems raised in the Ombudsman's report but adds the union will be watching closely.
CESAR MELHEM: Obviously the AWU will continue to monitor that. I do sit on a number of committees on WorkSafe. We will make sure that WorkSafe report to the stakeholders that these improvements have been met.
EMILY BOURKE: Cesar Melham the Victorian secretary of the Australian Workers Union ending Anna Hipsley's report.
Anna Hipsley reported this story on Friday, May 27, 2011
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