Japan’s municipal oversight of disability service providers falls short, with only just over 10% meeting inspection targets in FY2024; fraudulent claims exceed ¥3.2 billion

From The Yomiuri Shimbun via Yahoo! Japan

July 5 2026

TOKYO – The rate at which local governments conduct operational inspections (unei shidō) of disability welfare service providers to ensure they are being properly run remains low. Among the municipalities responsible for overseeing such providers, only just over 10% met the national target in fiscal 2024 for the proportion of facilities inspected. Some municipalities conducted no inspections at all, raising concerns that improper practices may be going undetected.

The findings come from data compiled by the Ministry of Health, Labour and Welfare (MHLW) on the inspection rates of individual municipalities. This is the first time that a complete breakdown of inspection rates by municipality has been made public. The ministry has introduced measures such as drafting an inspection manual to encourage local governments to carry out operational inspections.

A total of 129 local authorities—including prefectures, government ordinance-designated cities, and core cities, all of which have the authority to designate disability welfare service providers—are responsible for conducting operational inspections under the Comprehensive Support for Persons with Disabilities Act and related legislation.

During an inspection, officials spend anywhere from half a day to several days reviewing documents and interviewing staff to determine whether staffing levels, service provision, reimbursement claims, and other aspects of operations comply with legal requirements.

The MHLW has instructed local governments to inspect at least 33% of providers within their jurisdiction each year so that every provider is inspected at least once every three years. However, according to ministry data compiled through March this year, only 17 of the 129 municipalities reached the 33% benchmark in fiscal 2024. The highest inspection rate was 46.3% in Gifu City, while the national average stood at just 16.3%.

Twenty-four prefectures and municipalities inspected fewer than 10% of providers. Niigata City conducted no inspections at all, while Kanagawa Prefecture inspected just 0.3% of providers and Tokyo only 0.8%.

Niigata City said it had been forced to prioritize investigations into providers suspected of fraud, leaving insufficient capacity to conduct routine operational inspections.

According to the MHLW and other sources, there are approximately 178,000 disability welfare service facilities nationwide, an increase of around 20% over the past five years. Some corporations have entered the sector primarily to obtain government reimbursements, and cases of fraudulent claims—including inflating the number of service users—have continued to emerge. The total amount of fraudulent claims identified in fiscal 2024 exceeded ¥3.2 billion.

One reason routine inspections have lagged is that municipal staffing and administrative capacity have failed to keep pace with the rapid growth in the number of service providers. This is especially problematic in jurisdictions with large numbers of facilities, such as Tokyo, where local governments have struggled to conduct sufficient oversight.

Because operational inspections have uncovered fraudulent practices at some providers, an MHLW official said, “We want local governments to ensure that operational inspections are carried out reliably.”

Professor Taiji Taniguchi of Kansai University of Social Welfare, an expert on disability welfare, warned that without regular government inspections, oversight of service providers becomes inadequate and fraudulent practices may be left unchecked.

“If local governments are to establish systems capable of inspecting every provider at least once every three years, they should also consider placing limits on the number of providers,” he said.

Disability welfare service providers are facilities that support the employment and daily lives of people with disabilities. They include continuous employment support centres and after-school day services for children with disabilities. Most are operated by private organisations and are designated by prefectural governments or other authorities following an application process. They receive government reimbursement payments from the national and local governments for the services they provide.