Allegations over the financial management of the Artificial Limb Service have been fired in Parliament.

New Zealand First MP Barbara Stewart asked about the Accident Compensation Corporation (ACC) and the state-owned Artificial Limb Service (NZALS).

"... why is ACC still backing a provider found to have defrauded it of at least $47,000?" Stewart said in the House this week, later calling for an investigation.

But the limb service and ACC have said the claims have been investigated and no evidence of over-charging was found.


Stewart also asked if ACC had directed its case managers to stop funding visits by amputees to private provider Orthopro.

Acting ACC Minister Nathan Guy indicated he would look into Stewart's fraud claim if she provides details.

The state-owned service is the "sole provider" for amputees covered by ACC, he said, but they could ask to visit others, "case by case".

Auckland amputee Diane Smith, who has had a long-running dispute with the Artificial Limb Service, in July raised claims of fraud at the social services select committee.

Smith lost her lower left leg following a medical misadventure in surgery on her ankle after a fall. She was never satisfied with the limbs made for her by the state-owned provider, despite scores of consultations, but is happy with the work done for her by Orthopro.

She has become an advocate for other dissatisfied clients of the Artificial Limb Service.

She told the parliamentary committee: "Last year I worked with the ACC fraud investigators over suspected misappropriated funds by the NZALS."

Chairman Alfred Ngaro, a National MP, warned her not to make such claims before the committee.


Limb Service chief executive Sean Gray told the Herald: "We confirm in December 2015, ACC contacted NZALS with queries relating to 29 invoices totalling $54,000.31 including GST. NZALS has resolved these queries to the satisfaction of ACC.

"In response to these queries, NZALS engaged an independent accountant to analyse these invoices and found: no instance of over-charging; all 29 invoices relate to confusion created by NZALS invoicing systems and processes. These administrative issues are now being rectified."

ACC said in response to questions over its investigation of alleged fraud: "Following a client complaint to ACC about invoicing practices by the NZALS, ACC's Integrity Services Unit investigated.

"It found that on eight occasions ACC had been billed for time spent on its client's administrative matters, which in the absence of an appropriate billing code, had been charged under 'limb repairs'.

"Whilst there was no evidence of overcharging on any of the disputed invoices, the investigator questioned whether there was a basis on which to bill this type of activity, and noted that ACC should have queried it.

"Similarly, the external audit, commissioned by NZALS, found no evidence of overcharging but questioned the appropriateness of billing ACC for time spent on administration. On that basis NZALS has offered to pay ACC $8079.74.

"In summary, ACC's Integrity Services Unit found the client was justified in making the complaint, and the unit was satisfied with the resulting changes being made to the invoice and checking system used by NZALS and ACC."