Vic government departments have ‘well-designed’ employment screening policies, but are still at risk of hiring corrupt workers, audit finds

By Shannon Jenkins

Thursday May 21, 2020


Victorian government entities must have effective personnel security measures to reduce corruption risks posed by internal staff, contractors, and consultants, according to the state auditor general’s latest report.

The Victorian Auditor General’s Office recently investigated whether all eight state government departments have adequate fraud and corruption controls regarding personnel security. It specifically looked into practices at the Victorian Public Sector Commission, the Department of Health and Human Services, the Department of Premier and Cabinet, and the Department of Treasury and Finance.

The audit found agencies have “well-designed policies and procedures” that lower the risk of hiring ill-suited workers, including ex-VPS staff who have a history of undisclosed misconduct, and external candidates.

However, VAGO identified several weaknesses which “unnecessarily expose the VPS to fraud and corruption risks” and increase the chance of hiring unsuitable people. For example, controls were not in place for contractors or consultants, and weren’t operating effectively for candidates who were existing VPS employees. There were also gaps in how agencies identify and reduce the risk of conflicts of interest during recruitment.

The VPSC released its pre-employment screening policy in December 2019. While the policy was a “positive first step towards a consistent, better practice approach to employment screening” in the public service, the policy failed to cover all key areas. VAGO noted the policy primarily focuses on a candidate’s misconduct history, and commission failed to integrate other guidance material to “provide comprehensive instruction for agencies on employment screening”.

All audited agencies have adequate policies and processes for completing police checks for external candidates, the audit found. However, none of them periodically recheck the criminal history of existing employees to assess ongoing suitability for their role.

VAGO noted only the Department of Education and Training required a mandatory police check for internal candidates, with the Department of Justice and Community Safety only doing so for employees working directly with offenders.

“This means the ongoing suitability of VPS employees, who may have access to sensitive information or work in high-risk roles supporting vulnerable people, is not checked,” the report said.

“This practice is not consistent with the [employment screening] Standard, which recommends a risk-based approach to employment screening for both external and internal candidates.”

The audit found all agencies have policies and procedures that require mandatory reference checks for external candidates, but there were inconsistencies regarding questions about past misconduct and performance concerns, and a lack of reference checks for internal candidates.

The low compliance rates were likely caused by poor record keeping practices rather than the reference checks not being done, VAGO said.

On a more positive note, the audit found only 4% of VPS employees who were terminated or resigned over misconduct were re-employed in the agencies.

All agencies, aside from the Environment and Justice departments, and the VPSC, tended to consider conflicts of interest at the end of the recruitment phase rather than during, “which is too late”.

The audit also identified issues with whole-of-Victorian-government purchasing agreements and other procurement processes.

For example, VAGO looked at a sample of 299 staffing services state purchase contract engagements from July 1 2017 to June 30 2019. It found that 60% didn’t have a police check, and analysis showed up to 3430 contractors worked in the VPS without being checked for a criminal history during that period.

The audit also found record keeping policies and employment screening practices were inconsistent and not always compliant with the Public Record Office Victoria standards.

“Many agencies use a combination of the VPS online recruitment system and their own record management systems, spreadsheets and paper files,” the report noted.

“This creates the risk that agencies cannot find an employment screening record that demonstrates a candidate’s suitability. If a recruitment decision is challenged, agencies would not be able to provide evidence to support their decision.”

VAGO made 13 recommendations to all audited agencies, specifically the VPSC, Treasury and Finance, and the Department of Premier and Cabinet.

The recommendations covered areas including updating policies, contractual obligations for suppliers and contractors, procurement practices, and conflicts of interest procedures.

The VPSC was also directed to continue working with Human Capital Management — a shared human resources system for all departments and Victoria Police — project team to ensure the system incorporates VPS-wide employment screening practices.

All entities accepted the recommendations .

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