OPATIJA, June 9, 2014— To share experiences on minimizing the waste of public funds, a workshop on Reducing Error, Fraud, and Corruption in Social Protection Programs, brought together high-level policy makers and practitioners from Europe and Central Asia countries in Opatija, Croatia, June 9th – 11th.
Social protection systems are large, complex cash payment systems that deliver millions of pensions, unemployment benefits and social assistance benefits every month in all Europe and Central Asian countries. They tend to absorb about a fifth to a third of all Government spending. Although each country and social protection program aim to pay the right beneficiary, the right amount at the right time, complexity makes some level of error and fraud unavoidable. To minimize the waste of public funds, some countries in Europe and Central Asia, such as Albania, Croatia, Moldova, and Romania, have started to put in place effective systems, tools, and instruments to combat error, fraud, and corruption (EFC) in their social protection systems.
In particular, experiences from the United Kingdom, a leader in this area; Romania, who built comprehensive EFC controls over the last four years, starting almost from zero; and Croatia who is pioneering modern EFC prevention methods using modern information technologies and data matching tools were discussed in detail.
“Regardless of the level of fairness, transparency, and efficiency of a social protection system, it is only with the implementation of systematic controls and monitoring that not only remove the inefficiencies but act as a prevention from possible errors and fraud, can we be certain that we can fully protect the most vulnerable people in our societies,” said Milanka Opačić, Deputy Prime Minister and Minister of Social Policy and Youth of the Republic of Croatia, in her opening remarks.
“This topic is of increased importance in Europe and Central Asian countries, which are faced with increased pressure to balance the budgets amid timid economic recovery, and where social protection spending represents a significant amount of government spending,” said Hongjoo Hahm, World Bank Country Manager for Croatia. “Reducing error and fraud in cash payment systems is, therefore, very important to reduce waste in public spending, to help achieve fiscal balances, and maintain public confidence in the cash payment systems.”
The workshop was organized by the World Bank with the support of the Ministry of Finance of the Russian Federation through a Europe and Central Asia Public Finance Management Trust Fund.
Since joining the World Bank in 1993, Croatia has benefited from financial and technical assistance, policy advice, and analytical services provided by the global development institution. To date, the World Bank has supported 52 operations amounting to around US$3.5 billion, and approved 52 grants with a total value of US$70 million.