A new parliamentary report has called for major reforms to the Western Australian public sector and a range of proactive measures in a bid to prevent widespread corruption impacting the state’s procurement of goods and services.
The Joint Standing Committee on the Corruption and Crime Commission on Thursday tabled its report on the risk of corruption to public sector procurement.
The report has come just weeks after the committee refused to support the reappointment of corruption commissioner John McKechnie, angering Premier Mark McGowan and leaving the agency without a head.
The committee noted that when it began the inquiry into public sector procurement in late 2017, it had assumed that corruption was not widespread within the WA public sector. The assumption was short lived.
Since then, the state has faced several major cases of corruption, including the scandal which faced the Department of Communities and its Housing Authority last year. CCC chief executive Ray Warnes had described the case as “the most serious case of public sector corruption in Australia”, and its seriousness sparked immediate public sector reforms.
The report argued the WA public sector has been “generally reactive, rather than proactive”, in its approach to corruption.
“Reforms are often swiftly enacted which aim to ensure that weaknesses in governance and oversight are addressed. However sometimes reforms create more rules and regulation without addressing core issues,” it stated.
The committee made 62 findings and 11 recommendations regarding a range of issues including key areas for reform, agency governance and culture, conflicts of interest, and a public sector-wide response.
It has called for agencies and the entire public sector to “be on the front foot” with preventative solutions to address corruption, such as integrity strategies.
“The Public Sector Commission has released an integrity strategy for public authorities in this state which aims to embed integrity into organisational systems, controls, culture, and also in individuals’ actions. This should be implemented as a matter of priority,” the report said.
“Both a sector-wide approach, and reforms at agency level, are required. At the sector level, a useful model is the Organisation for Economic Co-operation and Development blueprint for a public integrity strategy. It shifts the focus from ad hoc policy to cultivating a culture of integrity across society.”
The WA public sector needs system-wide reform so that roles and responsibilities are clear and there are no gaps in oversight, the report noted.
“Rather than everybody thinking somebody else is doing it, there must be clarity about what is being done and by whom,” it said.
“The fragmentation, complexity and inconsistency of the current procurement legislative and policy framework creates uncertainty, which increases corruption risk. Confusion around process can enable individuals to excuse non-compliant behaviour. It may also engender a culture of ‘avoiding red tape’, where cutting corners becomes acceptable because following due process is seen as too unwieldy.”
The inquiry named four aspects of the current procurement framework which need improvement to help curb corruption, including transparency, accountability, oversight, and effective competition.
Among the 11 recommendations, the committee suggested the Public Sector Commission undertake a systemic review of all training being delivered across government around the areas of procurement, ethical decision making, and corruption prevention.
Meanwhile, all public sector employees with a remit that includes spending public money should be required to maintain a register of interests and associations, in addition to conflicts of interest declarations.
The committee called on Premier McGowan to ensure public sector authorities are required to have a management plan in place which details how to handle a conflict of interest once it is declared, as well as clear and appropriate consequences for non-compliance.
McGowan should also direct the public sector commissioner to investigate how directors general and other agency heads could be held to account for the effectiveness of internal controls, the internal audit function, and the overall financial management of their agency.
The committee also recommended the premier direct the commissioner to monitor implementation of the Integrity Strategy for WA Public Authorities 2020-2023. The quality and timeliness of implementation should be made the subject of performance agreements for all directors general, it said.
The committee noted that along with sector-wide reform, improvements must be made at an agency level. The report outlined four areas for good agency governance, from the WA auditor general, which could prevent corruption in procurement, including:
- internal control measures, such as good recordkeeping, segregation of duties and compliance with policy,
- internal oversight and monitoring of internal controls, to be reported on,
- internal audit and review,
- external audit, investigations and reviews.