The federal government sent nearly $ 26 million in payments to bad bank accounts in the 2020-21 fiscal year, which is an increase in misdirected funds from previous years.
Volume three of the 2021 Public Accounts Report notes that money was sent to the wrong accounts in 22,170 cases, amounting to $ 25.9 million, between April 1, 2020 and March 31, 2021. Although $ 7.1 million has been recovered, $ 10.2 million is expected to be permanently misplaced.
In comparison, in the previous fiscal year, the government misdirected 9,619 payments totaling $ 6.6 million. This is the second largest amount of misdirected deposits since 2009.
Misdirected direct deposit occurs when a payment is made to an account other than that of the intended beneficiary. This often happens when a government department or agency mistakenly provides the office of the Receiver General – the department responsible for monitoring all funds entering and leaving government accounts – with an incorrect bank account number.
Common reasons for this include manual errors, the recipient entering incorrect information or not notifying the department or financial institution of the changes, or fraud.
Public Services and Procurement Canada, attributed the increase in filing errors in 2020-2021 to the surge in COVID-19 payments to individuals and businesses.
“The COVID-19 pandemic has affected Canadians in a variety of ways, and many have lost their jobs and income. In response, the government launched benefits and assistance programs. Payments were made quickly to ease economic hardship and ease economic upheaval. a statement to CTVNews.ca reads.
“Many Canadians have chosen to enroll in direct deposit rather than receiving their assistance benefits by check. As a result, current trends in payments made by the federal government and the addition of direct deposits for new assistance programs have somewhat increased the likelihood of misdirected deposits. Issuing checks is much more expensive than direct deposits and poses a greater risk of fraud. “
The ministry notes that of 440 million payments worth more than $ 1,040 billion, 99% went to the correct bank account.
“The Government of Canada continues to implement additional controls to reduce the risk of misdirected direct deposits while ensuring that the cost of these measures does not exceed potential cost reductions. The Receiver General is also working with financial institutions to further strengthen controls to reduce the number of misdirected direct deposits, ”the statement said.
Conservative Treasury Board spokesperson Kelly McCauley told CTVNews.ca this was another example of the government’s lack of respect for taxpayer dollars.
“(The Liberals) are more focused on the announcements than on delivering the goods and it is again the taxpayers who are paying the price,” he said.
McCauley pointed to Auditor General Karen Hogan’s spring reports in which she found that less rigorous eligibility screening for COVID-19 benefits led to cases of abuse.
“Here is another example of doing wrong and paying the price.”
The ministry says efforts to recover the funds are progressing well.
“As of October 31, 2021, the amount has been reduced to $ 4 million due to the continued efforts of the Receiver General in collaboration with financial institutions. The Receiver General is doing everything to recover these funds and has historically been successful in recovering the vast majority, “it said.