This article is more than 1 year old

This article is more than 1 year old

Allegations of fraud within the national disability insurance scheme have surged dramatically, according to a new report that also reveals 25 dodgy former childcare operators will be booted from the scheme.

New data showed a “marked increase” in reports of potential fraud, with authorities receiving 2,293 tipoffs in the eight months to February, a 48% increase on the 1,553 recorded in the entire 2017-18 financial year.

The figures were contained in a Australian National Audit Office report that found the National Disability Insurance Agency had “improved” its protection measures, after criticism the NDIS was susceptible to fraud.

But the report also said:

The NDIA has 20 active fraud investigations worth an estimated $9.3m.

Claim breaches totalled $4.6m between August and December 2018.

Of 38 providers found to have been sanctioned as childcare operators, 25 will be deregistered. Those companies had already reaped $2.3m in NDIA funds.

The NDIA prevented an additional “$2m in potentially fraudulent claims in relation to its ongoing investigations”.

It comes after a 2016 audit identified a lack of checks and balances within the $20bn scheme, while media reports had uncovered dozens of NDIS providers had chequered histories as family daycare operators.

The audit office report noted many of the “enhancement” measures had begun as the new audit got under way. That includes the NDIS fraud taskforce, which was created in July 2018 and combines NDIA and Department of Human Services staff and the federal police.

It has since accused a Victorian man of allegedly defrauding the NDIS of more than $400,000, and three NDIS providers in western Sydney of fraudulently claiming $1.1m from more than 70 participants.

“There has been an increase in tipoffs since July 2017, and a marked increase since the NDIS Fraud Taskforce was established in July 2018,” the report said.

In February authorities were receiving about 312 fraud tipoffs a month, compared with 156 at the same time in 2018. In 2016-17, there were 313 in the entire year. The data did not specify if the tipoffs related to providers or participants.

The agency had “largely appropriate fraud detection and response mechanisms”, with data analytics and data-matching capabilities “being progressively implemented”, the audit office said.

In October departmental officials admitted they had no way of knowing if newly registered providers had previously defrauded taxpayers.

The agency has since established data matching, which was used to identify the 25 providers it now intended to deregister, the audit office said.

Providers will soon register with the NDIS Quality and Safeguards Commission, which is now operating in New South Wales and South Australia and will be rolled out to all states by July 2020.

Matthew Bowden, a co-chief executive at People with Disability Australia, welcomed the work to “ensure people with disability aren’t being ripped off by dodgy providers”.

But he warned the agency needed to ensure “people with disability retain their privacy and capacity to have control over their plans” when data matching was used.

“The report raises concerns that self-managed participants may be a fraud risk,” he said. “We would caution against rushing to this conclusion. Self-management of plans is a key plank of the NDIS.”

• Sign up to receive the top stories from Guardian Australia every morning

Gemma Carey, an NDIS researcher at the University of NSW’s Centre for Social Impact, also welcomed efforts from the agency to strengthen its fraud detection efforts. “Judging by the report, strengthening [the NDIA’s] data collection and sharing seems to sit at the heart of this,” she said.

“This is a long-running concern with the NDIA who have not been transparent with their data to date – hampering the effective implementation of the NDIS.”

The NDIA accepted all six recommendations, including the need to focus on “active fraud detection methods” as a priority.

In response to the audit report, the NDIA said the agency had placed “considerable focus and effort on risk management” over the past 18 months. “The NDIA has already taken a number of steps to address the recommendations and issues raised in this audit report,” it said.

The new NDIS minister, Stuart Robert, was approached for comment.

On Tuesday Robert announced he would increase price caps for regional and rural NDIS providers in response to concerns about their financial viability.