Australia’s biggest fraud? NDIS employee blows the whistle

Added: 2026-05-08

[00:00:00]You know, it's fugitive Australian journalist, Shane Dowling, from the website and YouTube channel, Kangaroo Court of Australia. Now, I've just published an article and I've embedded a video in the article, and I'm going to do a reaction video in a second. And the article's titled, "Australia's Biggest Fraud NDIS Theft Forecast to Reach $6 billion under the Labor Party in 2027-2028."

[00:00:23]But in that article, I got a video embedded from Parliament, the Joint Committee of Public Accounts and Audit Inquiry into the NDIS, which was held at Parliament House on Thursday, the 23rd of April, 2026.

[00:00:34]And I'll do a reaction video of that video now.

[00:00:37]Morning, everyone. I declare open this meeting and public hearing of the Joint Committee of Public Accounts and Audit for the inquiry into the administration of the National Disability Insurance Scheme, and I thank witnesses for being here today.

[00:00:49]I'm John Dardo, Deputy CEO, looking after integrity and technology. What I'd like to start uh Now, the person on screen now is Josh Burns. He's a federal MP from Victoria, and he's a chairperson of the committee.

[00:01:04]Um which is uh a focus of uh the Auditor-General's work was around claim compatibility and compliance, especially around fraud and um incorrect claims.

[00:01:17]So, I guess maybe it might be useful for the purposes of of our inquiry is to sort of outline how how that sort of how that work is um to to get on top of that has sort of been done, [snorts] uh what the you know, what the scale of that looks like now, um and where you think the gaps are.

[00:01:36]Look, I'll probably just >> yes, certainly. Yeah.

[00:01:38]>> important one is the the the um uh elements of fraud within our system through our auditing risk subcommittee led by former disability discrimination uh commissioner Graeme Innes.

[00:01:49]Uh Now, that's Kurt Fearnley. He's the chairperson.

[00:01:53]And as he said, the board has oversight or of the fraud within the NDIS, and they failed badly.

[00:02:00]So, any sort of private organization if the board had failed that badly with massive fraud, they'd all be sacked.

[00:02:08]For more detail, I'll hand it over to John. The the um I I I should I should note there's a couple of ANAO reports that have been done in relation Now, the person on screen now is NDIS Deputy CEO, Integrity, Transformation, and Technology Services, John Dardo.

[00:02:25]And he's the main one who deals with the fraud.

[00:02:28]to um claims and payments in um the uh NDIS um or in relation to fraud in NDIS.

[00:02:37]Uh and I um I can talk about this journey from about the end of 2022 till now. Um Now, the end of 2022 is important because federal Labor won government in May 2022.

[00:02:51]The coalition had been in power since 2013 until 2022.

[00:02:57]And Labor just took over in May 2022.

[00:03:00]Uh at at at the end of 2022, um or um you know, before September 2022, uh government announced that it would make a significant investment in the Fraud Fusion Taskforce. Um and uh and as we were setting up that taskforce, one of the things that we did was we looked very closely at previous reports that had been done, including a previous ANAO report that had been done on the treatment of fraud within the NDIS. But we also looked at and and within that taskforce, we had a lot of competence from across the Commonwealth and across states. And so, we looked at um what um best practice looks like for intelligence, for operations, and for prevention.

[00:03:44]And this is the most critical thing to understand. The taskforce is not just doing intelligence and operational work, it's imagining how you build prevention so we can actually stop, detect and stop any integrity risks before they arise or before they proceed.

[00:04:00]Cuz you know, our end state view is that you know, while there will always be a need for things like audits or prosecutions, they really are indicators of failure in a system. We should be minimizing the need for audits or prosecutions.

[00:04:15]That taskforce was established uh in at the end of 2022. It laid out very very quickly, and the ANAO report details this, um the sort of prevention capabilities that you would expect to see in a well-functioning scheme.

[00:04:30]Um and we started to imagine how you invest to build those preventative capabilities.

[00:04:36]Um and and we laid out a program of work that was consistent with the learnings or observations of the taskforce.

[00:04:44]And we went back to government and sought some additional funding, and that funding was to build um the system uplifts within the scheme to start to enable detection and prevention. You know, how you invest to make sure the systems can actually make it easier for people to get it right and harder for them to get it wrong.

[00:05:03]Um So, so that was a second large investment by government called the crackdown on fraud system uplift. That that program of work commenced in 2024, at the beginning of 2024.

[00:05:16]So, what were they doing from May 2022 when the federal Labor won government?

[00:05:23]And one of the key selling points or policies, if you want to call it that, they claimed they were going to sort out the fraud and the theft in the NDIS. So, from May 2022, it wasn't till 2024 that they started this new scheme he just spoke about, the crackdown on fraud.

[00:05:44]Um um and in parallel with that, we were also making significant investments in the ability to do payment integrity treatments closer to real time. So, instead of doing them after a payment, trying to do them before a payment.

[00:05:58]We articulated all of the layers of work um in a program of work. We loosely refer to that program of work as the rainbow diagram cuz it has different layers of work with different colors.

[00:06:10]And the layers describe um the range of um capabilities that you would want a mature program to have at every level.

[00:06:20]Um and again, we've we've we shared that with the ANAO as part of the audit report. Um and that program of work um um reflected the shortcomings that had been identified in previous ANAO work, which included that there's no point just focusing on fraud. What you need is a range of treatment capabilities, including how you deal with um sharp practices or errors or opportunistic high-volume uh mischief.

[00:06:53]High-volume mischief.

[00:06:56]High-volume fraud and theft is what it is. Calling it high-volume mischief is under underplaying what it really is.

[00:07:06]Um that program of work has um at the very top, Fraud Fusion Taskforce, multi-agency stuff. We've now got 24 agencies in that taskforce at the Commonwealth level, but we also have every state police force, and within state states, we also have crime commissions.

[00:07:24]It is probably the most powerful taskforce ever assembled in addressing non-compliance or fraud.

[00:07:32]So, hear that.

[00:07:34]The most impressive taskforce ever assembled uh to deal with fraud. Well, let's see what they achieved at the end of this video.

[00:07:43]You're going to realize they haven't achieved very much at all, and you have to ask why.

[00:07:48]Um the that taskforce now shares intelligence that was not imaginable three or four years ago.

[00:07:56]Um in our operational cases, it is now quite common for us to have federal police working alongside state police and tax office and Services Australia digital forensics and us in a raid or in an operational matter.

[00:08:12]Um the the level of support we've had from federal police, state police, um Commonwealth Director of Public Prosecutions in that taskforce is beyond anything I'd ever would have imagined.

[00:08:22]Um and I just need to compliment all the agencies that have lent in, including agencies that were not originally funded for that taskforce.

[00:08:30]Once again, he's saying what great work they've done.

[00:08:33]Well, it's end results that count. What are the results they've ever achieved?

[00:08:38]We're going to find out in a minute.

[00:08:40]Uh but I needed to highlight that again how he's saying what great work they've been doing.

[00:08:47]So, that's the taskforce level. So, then let's go into sort of what it's found and how it's going. Um So, the the leakage um in 2022-23 for non-compliant, fraudulent, or incorrect claims was between two and 3.5 billion. Is that some that that sounds Yeah, right.

[00:09:10]>> and and So, in the year after Bill Shorten took over as NDIS minister, Labor won power in May 2022, 2022, uh the 2022-2023 financial year, the NDIS fraud and theft was somewhere between 2 billion and 3.5 billion. And as you're going to hear, they can't put an exact number on it because there's a lot of fraud and theft they can't identify or haven't identified for whatever reason.

[00:09:37]And I and I should and I should highlight the um uh when you have immature systems, those metrics, by definition, are imperfect or incomplete.

[00:09:49]So, he said the metrics are imperfect or incomplete. So, what he's really saying is there's a lot more fraud there they just haven't identified yet.

[00:09:58]And so that was the detected payment error rate. Um and and that those those that leakage is that's not completely measurable because there were a whole bunch of things that were invisible to the agency.

[00:10:14]So so so yes, that that was a measured level of leakage, but that is not the complete level of leakage cuz the rest was not measurable. So so how how does how does that um range get calculated?

[00:10:26]Yeah. So so um there are there are some as we've been building maturity in the system, there are some things that we've been able to improve the metric of and and those metrics we increase the statistical validity of the measure like we're quite confident in quoting a number.

[00:10:45]And so the sort of number that we currently have as a as a statistically valid measure is approximately eight eight percent 8.2 8.3% it varies slightly by months.

[00:10:56]Um and that includes um a number of components. So one is where um and I'll refer to it as um a light touch um uh um error detection. So that is where um we've identified that a claim has been made, we've reached out to validate that claim and um for various reasons that claim was unable to be validated.

[00:11:21]Um it might have been that the the the amounts being claimed were inconsistent with the invoice or might be that there was no evidence of payment of it being made or service being received. Uh might be that it was a a a duplicate claim, but there's a range of reasons why those errors may be there.

[00:11:37]That that is a relatively easy thing to statistically calculate cuz you do samples.

[00:11:42]Um there is another component of the metric which is associated with entities that we have identified have significant problematic claiming and so we attribute a a percentage to the claims that have been made by those entities. You know, so there are some metrics that you know, there's another metric associated with wrong day claiming. You know, somebody's claiming from us uh at a weekend rate at $200 plus rate.

[00:12:09]But they that work could not have been delivered on a weekend or was not delivered on a weekday during normal business hours at a $70 rate. So they're the sorts of things that you can statistically validate. So so um for the purposes of the committee, can you um break down the how much of the non-compliance or the the total amount of leakage is you know, stuff that happens when you've got such a big uh program like you know, slightly off invoices or incorrect invoicing or duplicate invoicing or whatever um versus the persistent um or or Yeah, I would the word you just described was sort of um you know, organizations that are clearly doing the wrong thing consistently. Yeah. I Doing the wrong thing consistently, why don't you use the word fraud and theft?

[00:13:04]He's downplaying it.

[00:13:06]Uh which is disgraceful. He shouldn't be doing that.

[00:13:10]So before I do that, I might describe the things that we cannot statistically calculate yet and include in the measure.

[00:13:18]So what we cannot statistically calculate yet and give it and include in the measure as an as a as a a metric that would apply to the whole scheme spend is where somebody has used the where somebody's identity has been stolen and used to create a false identity to claim or where um or where um somebody has falsified their evidence to get into the scheme. So they've turned up with fake evidence to get into the scheme and then claimed against the scheme.

[00:13:47]Um or where there is um significant organized collusion. So what I mean by that is you go and test with a participant that they've received the service and they say yes.

[00:13:58]Um um and you test with the worker whether they've delivered the service, they say yes. You test with the provider whether the worker delivered the service, they say yes. If they're all colluding, we we may detect that in other ways, but statistically we can't detect it in a way that we can attribute to the whole scheme. So there are So what they're saying to large degree is there's a lot of fraud out there, we we just don't know about.

[00:14:23]for examples that are not in that metric.

[00:14:26]Um that metric that 8% it would be impossible to tell you how much of that is deliberate significant organized crime versus how much of that would be opportunistic um um or simple error. But Opportunistic?

[00:14:47]Well, that's fraud again. Doesn't matter whether it's organized fraud or it's opportunistic.

[00:14:52]Uh it doesn't matter how you term it.

[00:14:55]It's fraud and theft. They got no clue.

[00:14:57]That's just an estimate 8%.

[00:14:59]Now it's meant to hit 50 billion this year I think NDIS spending. 8% of that what's that 10% is 5 billion, so 8% is what 4 billion or something like that.

[00:15:09]So that's a truckload of money and that's just their estimate.

[00:15:13]There are some other metrics that give you an indication >> that forgive me for interrupting? What why is that impossible to measure?

[00:15:20]If you're measuring the the sort of range of um how many invoices uh fall into one particular category and creating a a forecast of what the total amount would be, why is it impossible to break that down? Yeah, I think I'll give you a really simple example of a case that would show the difficulty in it. You know, you you you have you have some claiming that comes in and on the surface of that claiming it looks like duplicate invoices.

[00:15:47]So you you would count that as a duplicate invoice error rate.

[00:15:51]Um it later emerges through other processes that actually that's a really deliberate process like it's a systematic industrialized process by that provider to create duplicate invoices at scale to try and um defraud the scheme.

[00:16:08]Um or you have claims um that are coming in where the hours are incorrect you know, hours you know, daily versus weekend and they claim it's a administrative error. You later through other processes determine that actually no, within that entity there were instructions given to give weekend rates on a weekday.

[00:16:27]I think what we can classify as the error type, the intent behind it and trying to break down that and apply that statistically to all of the claims is a very difficult thing to do.

[00:16:39]But there are some other measures that help you understand the scale of them in the the maliciousness.

[00:16:45]Um we've identified over 2,500 ABNs providers where we have made decisions to put um payment holds on them until they evidence every single claim.

[00:16:59]So instead of paying their claims automatically, we've we've put a mechanism in place which didn't exist at scale years ago.

[00:17:07]We've built that in the last 2 years and that allows us to say for that provider when they come in, we do not pay automatically. We actually hold the the claim until we verify in a much more detailed way and sometimes a much more audited way the claim.

[00:17:24]For those 2,500 providers, the vast majority have ceased claiming and will never claim again.

[00:17:31]Means for 2 and 1/2 thousand providers, soon as they got asked to show some proof of them providing the service, they just stopped claiming.

[00:17:41]Which is basically an admission they'd been committing fraud up until that point.

[00:17:46]Number of them we've sent off to prosecutions, executed warrants and prosecutions um and those 2,500 providers historically between them have claimed over 5 billion dollars.

[00:17:59]So how much fraud is there? 2 and 1/2 thousand providers.

[00:18:03]5 and 1/2 billion dollars that build up to that stage. Maybe four or four and 1/2 five billion was out and out fraud.

[00:18:11]And they've only sent a few to prosecution, a few to be investigated, not the full 2 and 1/2 thousand. The full 2 and 1/2 thousand should be investigated.

[00:18:21]And as you'll find out, hasn't achieved much anyhow.

[00:18:24]Now we can't say that all of that was pure fraud, but what we can say is that frankly we should never have paid those low quality um in They can't say it's all fraud, but it certainly sounds like it as soon as they started asking for uh proof of providing services, they just stopped invoicing.

[00:18:46]Cuz how it worked before is they just send in an invoice and just automatically gets paid, no proof needed.

[00:18:53]In many cases quite um deliberately manipulative providers that money that money really should have gone to high quality genuine providers.

[00:19:02]Um and it should have gone to um to genuine services.

[00:19:07]Uh uh uh You know, you really don't want to have a scheme where within a couple of years we can identify 2 and 1/2 thousand providers that shouldn't receive money at all. That that that's just not a great place to be.

[00:19:20]And how many more providers are on the system that shouldn't be there?

[00:19:24]Um let's come back to that 2 and 1/2 thousand providers. Um but um So so the 2022 to 23 figure of two to 3.5 billion for leakage is still forecast to increase to 3.6 to 6 billion by 2027-28 of that same leakage. So I guess the question like the obvious question is sounds like there's been some exceptional work going on to identify a large number of providers that the vast majority of which are no longer involved in the scheme. Uh but what like how much is still out there? How many are still out there? Uh and and it doesn't sound like the measures that are being taken are are at like while while those those uh suppliers are not you know the majority are no longer in the scheme, what why is it still getting worse?

[00:20:17]I I That's the bottom line.

[00:20:20]They've kicked 2 and 1/2 thousand providers off the system who historically billed 5 and 1/2 billion dollars and the vast majority have not billed again. That's what John Dardo is telling us.

[00:20:32]Yet the fraud is getting worse. It's estimated to hit 6 billion by 2027-2028 financial year. So that probably means some of those 2 and 1/2 thousand providers who had ABNs, who were providing services, probably just went and re-badged under a new ABN, registered a new ABN, which is easy to do, or they got their friends and family to register new ABN, or if they didn't come back under new ABNs or new people, uh the people providing services currently who are committing fraud obviously increased their fraud or new criminals have joined the NDIS fraud bandwagon.

[00:21:10]I I I and I've I'm on public record in saying you can never audit or prosecute your way out of the dilemma that we have in the NDIS today.

[00:21:18]You you you we can't. We we actually need reform.

[00:21:22]Um because Now he needs reform, he says. Well, reform could have happened under the Labor Party over the last 4 years. Yes, fraud and theft under the coalition from 2013 till 2000 22 was bad, but it's gotten worse under the Labor Party. They haven't fixed anything.

[00:21:43]The um I I to to date um the majority of those providers have had very little you know it's almost been a I I you know I think a a previous very distinguished person um in the disability sector described it as a letter rip type mentality in the market, which is that almost any person could become a provider and provide a whole bunch of services with very little controls and almost zero evidence.

[00:22:11]You've got to remember in the current scheme today the NDIS does not see full claims through a plan manager or direct from a provider a single piece of evidence before they're paid.

[00:22:24]Now as I just said, the Labor Party could have changed that in 2022 when they came to power to make sure people are providing evidence of of supplying the services they claim to be providing. But now the Labor Party haven't done that, not even till today.

[00:22:41]Which is an extraordinary position to be in. That is the that is the current system design and the settings that have been inherited.

[00:22:49]That's the system design.

[00:22:51]And the Labor Party could have changed that. Bill Shorten could have changed that. He was at NDIS minister from 2022 until I think he resigned February 2025, something like that.

[00:23:03]That has to change. We've got to move to a world by design where we're very confident about who the provider is, we're very confident about where the money is going, we see evidence before we pay the claims, and we have mechanisms that allow us to data match and detect before we're making those claims.

[00:23:22]Now federal Labor MP Jenny McAllister, she's the current NDIS minister, and she reports to Mark Butler, who's the health minister. He has ultimate oversight of the NDIS. And what have they done in the last 12 months? Absolutely nothing. They could have changed the processes so a lot of that fraud stopped, but they've failed to do so.

[00:23:42]And you just heard the person on screen now, John Dardo, say they need reform, but they don't need new legislation.

[00:23:50]Mark Butler and Jenny McAllister could have reformed it, stopped a lot of the fraud at the NDIS, but they've refused to do so, and they need to explain why.

[00:23:57]um payments. So so while we've done an enormous amount of work in the current settings and with current policy settings, um it is not possible with current policy settings to get to the level of integrity that really this scheme deserves and that people with disability deserve.

[00:24:17]He said it's not possible in the current policy settings. One of those policies is providers just send an invoice in and they get paid straight away without any proof.

[00:24:27]Unless they suspect them of fraud, then they might ask for a bit of proof, but that's rare from what John Dardo just said. And Prime Minister Anthony Albanese needs to take responsibility too, because everyone knows the massive amount of fraud in the NDIS.

[00:24:40]You heard John Dardo say they just need reform under the current policy settings. Well, Mark Butler and Jenny McAllister, they need to change the policies real fast.

[00:24:50]I want to come back to the 2 and 1/2 thousand providers in a second. Um but I guess my question for the um Auditor-General's office is around uh the um implementation of the the the work or the work going on to detect inconsistent or fraudulent claims and um maybe if you can sort of reiterate to the committee the recommendations or the gaps that you thought that were um important and what was the sort of evidence behind that?

[00:25:22]Thank you, Chair. I'm happy to uh to start and others may wish to uh contribute as well. So our Auditor-General report number 48, which was tabled in uh June last year in 2025, aimed to assess the effectiveness of NDIS claims management. And we asked two questions, whether the NDIS developed and implemented effective frameworks and processes to manage compliance, uh and whether the NDIS implemented effective arrangements to oversee, monitor, continuously improve claim compliance.

[00:25:54]Uh we concluded that the NDI was partly effective in its management of claim compliance. We observed that um prior to 2024, as Mr. Dardo has indicated consistent with his comments, the NDIS lacked even basic prevention controls for uh fraud and non-compliance.

[00:26:15]So that's before 2024, she said.

[00:26:19]They lacked even basic checks for fraud.

[00:26:23]But Labor came to power in May 2022. So they had the rest of 2022 from May and 2023. Seems like they did nothing for over 18 months.

[00:26:35]They were self-assessed as catastrophically weak and if They were self-assessed as catastrophically weak when it came to fraud.

[00:26:46]and basic checks like verifying invoices and identity were absent. Uh measures to detect non-compliance were also very rarely used. When they were used, there was uh significant success, more than 50% uh uh success. Um So when they did check for fraud, they had over 50% success.

[00:27:07]They should be checking every invoice for fraud.

[00:27:12]When they when uh manual pre-payment reviews were uh employed. Um at the time of the audit, so late 2024 and early 2025, the NDI was undertaking work to crack down on fraud as Mr. Dardo has uh uh outlined, and we did conclude that if it was delivered and planned as intended, uh had the potential to improve financial sustainability of the NDIS and and and um achieve the goals of reducing fraud. At that time, the uh estimate of um fraudulent and uh non-compliant incorrect claims was between 6 and 10% of uh NDIS claims, which at that time was about 42 billion dollars. So again, consistent with Mr. Mr. Dardo's comments, I think he mentioned it at 8.2 uh now as the uh uh latest estimate, recognizing the uncertainties um around around that.

[00:28:04]Uh we made four recommendations, which the NDIS had uh agreed to, and they were relating to establishing a fit for purpose uh compliance framework, um updating risk assessments at the fraud and the operational levels um to help inform the design of more effective controls, uh improving payment assurance processes um by expanding the scope to include more complex fraud and non-compliance, and also establishing processes to um monitor implementation of recommendations from some of the assurance testing that was taking place, uh and then finally improving reporting on uh compliance initiatives including savings, benefits, and performance measures so that there can be uh continuous learning. So the NDIS had uh agreed to all of um the recommendations, and we're keen to hear about progress in implementation of that um this this morning.

[00:29:00]So the Auditor-General is keen to hear about the progress the NDIS have had in relation to their fraud strategy, dealing with fraud strategy. Why hadn't the NDIS notified the Auditor-General in the first place before today?

[00:29:15]Uh Auditor-General. Um Chair, if I can just may make a comment on the rationale behind the words of expanding the scope of payment assurance along the lines of what Mr. Dardo is speaking of. Uh at the time of the audit, there were 0.4% of uh NDIS claims that were subject to type of assurance that uh Mr. Dardo has mentioned, so manual pre-payment reviews.

[00:29:40]Um so those checks that the money is going to the right person, that there is evidence to support the claim, happened in less than 1/2 of 1% of our claims.

[00:29:52]So, they checked 0.4% of their claims.

[00:29:56]Uh the NDIS did. So, it's less than half a percent, 0.4% and what happened?

[00:30:02]But when those checks were done, uh 53.7% of the claims um were cancelled due to non-compliance.

[00:30:11]So, they checked 0.4% of the claims and out of that 0.4% of the claims they checked, over 53%, 53.7% were not paid because they were rejected.

[00:30:23]So, they found more than half of those claims that they did check were non-compliant, but it was only uh a very small proportion of claims that had those checks in place. So, our recommendations are about expanding the scope of that um assurance and other uh So, what she's saying is they need to expand the number of uh checks they're doing from 0.4% to a lot bigger number.

[00:30:44]And I'm saying they should go to 100%.

[00:30:46]Check them all.

[00:30:47]Like most companies do.

[00:30:49]Most organizations. Even more so when there's so much fraud going on.

[00:30:54]Now, Bill Shorten was the minister from 2022 when Labor come to power until into 2024, beginning of 2025 when he resigned from parliament.

[00:31:03]And he failed to achieve anything, didn't he? At the end of the day, fraud is growing. It's estimated to grow to $6 billion by by 2027 to 2028. It's so it's growing.

[00:31:15]Um But Mark Butler and Jenny Macklinster who have oversight of the NDIS now have responsibility for it have also failed.

[00:31:24]You see Mark Butler going on TV saying, "Oh, we've got, you know, 90% of providers aren't registered." Well, whose fault is that, you clown? You've been in control for over 12 months of the NDIS and you've achieved nothing.

[00:31:37]You've got John Dardo who works at the NDIS, which you just seen telling people, anyone and everyone, the government that unless his policy changes, the fraud's going to continue.

[00:31:47]And who's responsible for policy? Well, Mark Butler and Jenny Macklinster, Anthony Albanese, ultimately the Prime Minister.

[00:31:55]If you didn't know any better, if you see Mark Butler speaking on the issue, you'd think he was a victim.

[00:32:00]He implies he can't do anything.

[00:32:03]He was saying in the middle of last year that the fact that uh 90% of providers are unregistered. Well, why hasn't he done anything? He's saying the same thing in the last week or two as well.

[00:32:14]Nothing has stopped him from doing anything. He just needs to change policy.

[00:32:17]They don't need new legislation.

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