A former Department of Education and Training project manager in the information technology division misused their position and sourced IT contractors from a company they owned, for personal benefit, according to Victoria’s corruption watchdog.
The Independent Broad-based Anti-corruption Commission’s latest report found the employee failed to manage a conflict of interest when his company provided almost $14 million in contracted staffing resources to the department between 2003 and 2016.
The project manager and his company’s account manager had “actively fostered relationships with key managers within the department to gain access to information and favourable treatment” for the company, IBAC found, and there were “significant failings” in how the employee identified, declared, and managed the conflict of interest produced by his roles at the department and as the director of the company.
The investigation highlighted the high risk of key decisions being compromised when conflicts of interest are not handled appropriately, according to commissioner Robert Redlich.
“IBAC’s Operation Betka investigation found the failure of Department of Education and Training supervisors to properly manage the conflict of interest enabled this project manager to misuse departmental information to improperly influence processes for procuring contracted staffing services,” he said.
“The manager was able to bypass proper processes in order to obtain an unfair advantage for his company, which disadvantaged competing IT suppliers but benefited him.”
The employee had misused departmental information, influenced processes for procuring contracted staffing services, and circumvented those processes to obtain the unfair advantage, the report found.
The project manager’s supervisors had also “displayed a concerning lack of awareness of departmental procurement procedures and policies”, according to the report. Redlich described the failures of the supervisors as “striking”.
“Managers were aware of the project manager’s conflict of interest yet they failed to take meaningful steps to remove that conflict or to effectively manage his conduct,” he said.
“The project manager was able to improperly influence the department’s procurement processes for his own benefit over an extended period. This could have been avoided had his supervisors implemented and enforced a plan to manage his conflict of interest, as they should have done.”
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IBAC also identified issues with the department’s policies, systems and controls in several areas, and found cultural issues within the department – including a “high-pressure culture” within the information technology division that relied on contractors to meet project and budget deadlines – that “may have contributed to a failure to question the project manager’s conduct”.
However, the watchdog noted that since 2016, the department has worked to improve awareness of conflicts of interest among its staff, has refreshed its conflict of interest framework, and has resources in place to support the identification, management and monitoring of conflicts of interest, including a central electronic register and an online declaration form. IBAC described the changes as “good practice”.
Despite this, IBAC has made a number of recommendations regarding procurement processes, employees and contractors, and the department has been asked to report on the implementation of IBAC’s recommendations by November 30.
Redlich urged other agencies across the state government to take note of the investigation’s findings.
“The vulnerabilities highlighted in this investigation are not unique to the Department of Education and Training, so I encourage all public sector agencies to read this report and review their internal systems, processes and controls around managing conflicts of interest, and particularly around appointing contractors,” he said.