INPS: Our fight and synergy against corruption
INPS Regional Management ( National Institute of Social Welfare), Apulia, Bari

The Problem

The Italian Constitution and laws protect disadvantaged groups, and INPS (National Institute of Social Security) is the country’s main institute providing social security and welfare. In the south of Italy there is a higher concentration of economic and social problems which the global crisis of recent years has exacerbated. In this context INPS Puglia has made enormous efforts to improve the services it provides to the general public and currently pays pensions and benefits within 30 days from the date on which the application was made for them, and determines applications on the part of companies within 15 days. INPS is paying 1,136,246 retired people, 340,000 unemployment benefits every year - half of which to farmers - and 232,477 economic benefits to civil disabled. The need to pay strict attention to the expenditure cycle, recurrent news items about inappropriate use of public money and the awareness of operating in a sector which is at risk of corruption as a result of the amount of money that it manages have led to the adoption of a series of measures in order to bring the issue of the legality of administrative action back into focus. Process engineering, upgrading ICT technologies, prompt reporting and a well-established corporate culture of transparency and impartiality have made it possible to set up a modern management control system that can operate in support of efficiency and legality.
Management control reports showed phenomena that were out of control: too many workers were employed by agricultural enterprises with small areas of cultivable land: taking into account the fact that agricultural workers enjoy particularly favourable levels of social security protection, it should be considered that modest contributions entitle them to advantageous economic benefits, such as unemployment, sickness benefit, maternity allowance and family allowances, to name only the main ones.
In addition, immigration, which brings tens of thousands of foreigners to Italy from the Mediterranean, has further increased unemployment in Puglia.
The number of agricultural workers as a percentage of the resident population was too high, especially in proportion to the total land area on which these workers were employed. Unemployment benefit, sickness benefit, maternity allowance and family allowances were paid to agricultural workers every year. When employment relations thus declared were or are not legally recognised as such, there has been a growing tendency over the years to appeal to the legal system in order to have the status of agricultural worker – and therefore the benefits accrued – recognised. Over this legal issue, Italian law primarily protected workers, considered as the "weak side", and subsequently judges sentenced INPS to pay the performances and services, to which legal annual stakes and lawyers' legal expenses were added. As of 31.12.2011 pending appeals in Puglia accounted for around 35.3% of the national total, while four INPS branches in Puglia still figure among the ten most critical branches in terms of numbers of appeals brought in Italy.
The issue was fomented also by missing health requirements that entitle to being paid as civil disabled.

Solution and Key Benefits

 What is the initiative about? (the solution)
In order to realize our aim we needed a new organization in all our regional headquarters, by complying with the National Management Team's dispositions. The new organization has divided office work into front and back office: front office has to provide quick information and services to the citizen, back office is in charge of monitoring administrative and accounting legality. In its various departmental guises, the back office area ensures that benefits are received only by those who are actually entitled to them, progressively reduces personnel and facility costs in the region, is responsible for reducing the enormous costs relating to legal appeals by every means and using advanced strategies specifically structured for the purpose; it must effectively implement procedures for recovering money owed by companies and citizens.
In 2011 it became compulsory to submit administrative appeals to INPS online before judicial appeals are brought: it has thus become possible to manage administrative appeals in a thorough manner with a procedure that prepares for and facilitates the management of the subsequent judicial appeal.
Training programmes have been implemented for employees and inspectors, while joint initiatives between INPS lawyers and executives have been promoted in order to establish consistent procedures in all of the region’s branches.
Guidelines for improving inspection activities have been drawn up: that is, for personnel who carry out inspections at companies and check that accounting records are kept regularly and that employees are actually employed in the workplace. This has made it possible to uncover fictitious employment relationships. A huge number of appeals followed: with careful management of each appeal it has been possible to increase efficiency and cost effectiveness, while at the same time bringing to light examples of fraud and abuse.
Severe national regulations forbid to INPS employees, activities that can create conflict of interest. Conflicts can be relevant for inspectors, doctors, lawyers. Referring to this issue, disciplinary actions are being applied to the case of an INPS medical doctor and two officers in Foggia, arrested and suspended for undeserved payment of sickness allowance, 8,000,000 euros in total. While, four employees in Taranto have been arrested and fired, because of illicit concession of contributory benefits to local companies.
The relationship with the regional corporation is particularly active through the subscription of an agreement protocol and we are trying to cooperate in order to find false disabled people. Regarding this issue, INPS has realized between 2007 and 2013 a new data transmission system that involves doctors, employees and lawyers, both working for INPS and from the outside. What has been realized, has resulted into many rewards like the last “Smart City 2012” event in Bologna, for the partnership realized with private bodies and public administration. Referring to the money wrongly paid to retired people, in 2011 has been formulated a procedure of rescue of payments that had been collected after the holder’s death. This operation brought to the rescue of 3,000,000 euros. Also a training initiative has been organized in order to sensitize people.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
INPS Puglia management has identified the phenomenon and conducted initial inspections. We have sent reports to the judicial authorities, after a large-scale monitoring operation carried out by our inspectors, verified offences by inspecting the companies concerned and ascertaining the authenticity of documentation. Frauds were uncovered which resulted in the elimination of 16,000 fictitious employment contracts in the agricultural sector. Thousands of appeals had been falsified in relation to the original, duplicated according to individual and period, submitted by lawyers, often without the knowledge of the workers themselves, which led to the courts demanding documents which were impossible to appeal against on the grounds of their origin or content before the application was received, allowing INPS to recover any unpaid contributions from employers.
Through the work of INPS inspectors, the public prosecutor’s office, the tax police (Guardia di Finanza) and the tribunal for labour disputes, fraudulent claims were uncovered and fictitious employment relationships in agriculture were removed from the records. Several thousand claims subsequently submitted by lawyers were turned down by the judge, who, reversing the previous tendency, also required the claimant to pay legal costs. Pursuant to evidence provided by citizens involved in different ways and handwriting examinations conducted upon the request of investigating magistrates, four lawyers from the Puglia region were charged with serious, ongoing fraud against INPS and the Ministry of Justice, interrupting a public service (for aggravating and disturbing the work of the judicial administration), intentionally false statements made by a public official in public documents (as the result of deceit by others), forgery and intentionally false statements committed by persons providing public services.
There was also a radical change in the behaviour of external lawyers, who previously undertook clearly hasty legal judgments, confident in the fact that the large numbers of outstanding appeals would prevent effective monitoring and enforcement actions from being implemented.
Cooperation between INPS and the Guardia di Finanza (Italian tax police) also revealed fraud involving invalid patients admitted to hospital at the state’s expense and social allowances paid to holders of illegal residence permits.
Dialogue with the Patronati (state-funded organisations which help citizens with procedures relating to social security and welfare), holding of workshops, information videoconferences and monthly consultation committees have all marked the beginning of a process which will see us committed also in the future to involving and building dialogue with all stakeholders. Relations remain active with regional government, with which cooperation has begun concerning the signing of a memorandum of understanding on Professional Farmers and work is being conducted to uncover disability benefit fraudsters.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
Over the course of 2011 and 2012, training of newly employed inspectors was completed and an additional 9 units were deployed, taking the number of regional inspectors to 92.
In addition, a regional project was begun with the aim of harmonising inspection activities across the region, which has led to guidelines being drawn up regarding the management of inspection reports containing notifications of administrative offences and the organisation of a specific training programme at the regional level.
The Puglia regional directorate planned a series of measures on the basis of specific aspects of the region, with the collaboration of other government agencies (Direzioni Territoriali del Lavoro, Regional Labour Departments): in order to prevent measures from being duplicated or overlapping, regular exchange of information relating to the companies inspected was instituted with the relevant departments of the Direzioni Territoriali del Lavoro.
An inspection task force for countering the phenomenon of fictitious employment in agriculture has been operational in the region, and has also conducted inspections regarding self-employed agricultural workers not registered with INPS and regarding compliance with national pay settlements in the agricultural sector.
A request was made and granted by the judge to merge separate proceedings under one single magistrate, who reviewed as many as 437 verdicts in a single session, and issued cumulative verdicts for over 250 and up to 400 claimants. As a matter of fact lawyers would receive between 400 and 600 euros per case. However, as a result of delays in court proceedings, they received additional sums for verdicts issued in violation of the law concerning the reasonableness of the length of time required for trial proceedings.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
The initiative started from the inspection activity which began at the end of 2009, which brought to light false, duplicate claims made by individuals whose employment relationships had already been refuted.
Reports were filed with judicial authorities concerning any criminal offences ascertained, in February and April 2010.
Specific organisational provisions were issued within INPS departments, all of which took part in training and refresher courses. Since that time, until the present day, the team of INPS lawyers, inspectors and employees has been strengthened, including necessary responses to situations of lis alibi pendens (disputes elsewhere pending) and previous proceedings, in order to pursue efficacious, decisive lines of defence.
In 2011 personnel dealing with contentious were 152: compared to the previous year they had been increased of the 200%.
The magistrature has worked closely with institutions and has responded to and helped to correct anomalies in the system in a timely manner.
In 2010 Puglia will total 304,126 verdicts; in one year a reduction of 13.36% in the number of pending procedures was achieved, while the number of cases taken up by lawyers on the part of the adverse party was 123,303 in 2010 and 51,748 in 2011, with a reduction of 58.03%; approximately 30,000 proceedings were withdrawn by independent lawyers in the Foggia area and in all of the region’s courts a considerable decrease in the number of ordinary first- and second-instance proceedings. 27,000 cases were withdrawn in a single week.
In the year 2012 claim of unemployment benefit, sickness benefit, maternity allowance and family allowances fell by 59.4%. With the Deliberation 91/2012 the Court of Auditors, national organization controlling public spending, in its report on INPS spending review, widely appreciated the results achieved. In 2012 INPS Apulia has published results achieved in its social balance sheet.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The major critical point consisted in the huge number of claims requiring to be processed and managed in order to implement the necessary lines of defence in a timely fashion, guarantee transparency and traceability through the acquisition of all appeals, and reduce legal expenses. It was needed to entrust legal services of records office to tribunals in order to allow information exchange: it has been signed an agreement with an external society for the collection of judiciary documents from tribunals of the region and fill in the informatics procedure the overcome of pending rulings.
Lawyers also have requested consolidation of personnel structure and reorganisation of work methods, so that they can provide an adequate defence under abnormal workloads. External lawyers and substitutes in audiences have been agreed upon, for a total of 414 lawyers.
The strong push towards computerisation within INPS has facilitated the adoption of measures based on office automation of all formalities, including scanning of appeals in the courts.
In addition, difficulties with companies have been encountered, as has hostility on the part of lawyers and certain clerk of the court’s offices, who are sometimes accomplices of the organisers of the frauds against INPS.
Another factor which has further complicated verifications is the disappearance from the public prosecutors’ offices of the “fascicoli di parte” (documents attesting to the motives of the claimant) which could only be acquired after the verdict, with the authorisation of the judge. This has highlighted a failure of due diligence on the part of clerks of the court, against whom action has been taken in the form of both criminal proceedings and organisational measures aimed at eliminating the anomalous behaviour of the parties concerned. In order to solve the problem a computer station in the tribunal records office, has been requested and obtained. The external society takes the records, elaborates them and insert them in the informatics system.
Finally, another aspect to be noted is the threats received by INPS lawyers and managers, who have sometimes been obliged to travel under escort.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
With the hiring of personnel on temporary employment contracts during 2010-2011 (125 employees worked for six months), all claims were entered in a specific database (76,000 pending in Foggia alone as of 03/2010, plus 43,000 pending and processed up until 2010, in addition to 5,000 submitted on average each month), thus making it possible to monitor the phenomenon and report abuses and duplications. In total n claims were entered in Puglia. Some INPS branches which were less affected by the phenomenon worked on behalf of those for which the situation was more critical. Inspectors, who were organised into an agriculture task force, organised their inspections on the basis of the largest in terms of numbers of employees involved in the judicial procedures.
Guidelines were drawn up with regard to improving procedures for handling ordinary disputes, civil disability and seizure of goods, in order to foster efficiency and effectiveness and to minimise the costs of all procedures connected with judicial disputes/appeals.
Training programmes have been organised and joint initiatives between all legal officials have been encouraged with the aim of establishing uniform conduct in all of the region’s branches.
All activities have been conducted using ordinary financial resources, without any additional costs being incurred, apart from the hiring of temporary staff. All of the other resources – human, ICT and financial – used were ordinarily funded resources. Notwithstanding the results achieved, an incremental reduction in the costs of all items has been achieved, with the sole exception of the item regarding the missions of inspection personnel.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
After their implementation in Puglia, most of the initiatives undertaken have been replicated on a national scale, as a result both of the effectiveness of the measures adopted and the results achieved in one of Italy’s most critical regions: indeed, it has been possible to prevent and suppress corruption and illegality while achieving economies of scale. Local guidelines have been transcribed in national INPS memoranda and rendered operational across Italy.
The sustainability of these measures is implicit in the reduction of public expenditure achieved and in the improvements of the service.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
As a matter of fact, the acting of a public administrative organism is not merely giving attention and taking care of the services for the single citizen, but must be concentrated with same constancy and intensity on the fight against abuse and corruption, inside and outside its structures. Winning strategies that must be implemented are mainly due to dialogue an continuous exchange with stakeholders, now systematic and periodic; on the other side, training and updating the personnel. Latest reports on the control of the administration give us good validation, as well as the success of INPS Apulia initiatives – that in the last four years obtained awards such as “Premiamo I risultati” in 2009, “Premio qualità della Pubblica Amministrazione” in 2011 on the total quality of services offered, and “Smart City” 2012 regarding transparency and traceability that allowed our region to enhance services, prevent and fight against corruption. The major reward has been the one by the Court of Auditors, that in the Deliberation 91/2012 has recognized the results achieved by INPS in the reduction of legal controversies and in the efficiency of actions aimed to contain the phenomenon in Apulia, Calabria and Lazio.

Contact Information

Institution Name:   INPS Regional Management ( National Institute of Social Welfare), Apulia, Bari
Institution Type:   Public Organization  
Contact Person:   Giovanni Di Monde
Title:   Superior executive  
Telephone/ Fax:   00390805410641
Institution's / Project's Website:
Address:   Via Putignani 108
Postal Code:   70122
City:   Bari
State/Province:   BA
Country:   Italy

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