Sector profile

Community Service Organisations 

•    Fraud or corruption within contract management (and contractual oversight) of services delivered.
•    Poor identification and management of conflicts of interest.
•    Theft of cash and small physical assets.
•    Lack of awareness about corruption and associated prevention and reporting strategies across the sector.
•    Inadequate or inexperienced board and governance structures, including the challenge of attracting board members with appropriate experience and capability.
•    Dishonesty in employment practices, such as falsification of credentials.
•    Recycling employees with histories of questionable conduct or performance across the sector.

Departments 

•    Procurement fraud, such as corrupt payments or unmanaged conflicts of interest in supplier selection.
•    Dishonesty or unmanaged conflicts of interest in employment practices, such as falsification of credentials.
•    Lack of detection of corruption risks due to complex operating environment with broad external oversight and regulatory arrangements across multiple bodies and all three levels of government.

Community service organisations 

•    False or inaccurate reporting practices about services delivered, including misreporting by funded agencies to multiple government departments.
•    Inaccurate reporting of service delivery outputs to obtain future funding.
•    Unauthorised access to sensitive personal and business information.
•    Corruption risks associated with increase in government spending.

Departments 

•    Challenges detecting issues with, or fraudulent reporting of, funding and services delivered. This can follow increased funding and crisis payments such as during a pandemic and other emergencies.

Community services organisations 

•    Social housing.
•    Fraud, for example housing maintenance.
•    Theft of assets or fraudulent asset management, including disposal.

Public housing

•    Bribery, for example related to applications such as for public housing.
•    Fraud, for example in housing maintenance.
•    Theft of assets or fraudulent asset management, including disposal.

Child protection

•    Unauthorised information access and sharing by non-government agencies for personal benefit or the benefit of an associate. 

IBAC has conducted a small number of investigations into the human services sector. The following two case studies are investigations that did not substantiate any allegations of corrupt conduct but are included to highlight potential corruption risks for the sector.

Operation Shaw 

In 2019, IBAC commenced Operation Shaw,  an investigation into the conduct of the Chief Executive Officer and directors of a community service organisation providing community and health services to Aboriginal communities in Victoria. While the investigation closed in 2021 and did not substantiate any allegations of corrupt conduct, IBAC did identify several corruption vulnerabilities including inadequate board governance, poor conflict of interest management and inappropriate financial practices. Prevention measures could include training and assessment tools for board competencies, ensuring employees and board directors understand their obligations in relation to conflicts of interest and recruitment practices that ensure transparent and merit-based employment.

Operation Budelli 

In 2017, IBAC conducted preliminary inquiries, which led to an investigation, into allegations that bribes were paid to employees of the then Department of Health and Human Services (DHHS) to obtain preferential allocation of public housing properties. The circumstances of tenants who were alleged to have paid bribes for accommodation showed legitimate pathways to housing were taken and there was no connection to the DHHS staff alleged to have received bribes. The allegations were not supported by the available evidence and the matter was discontinued.

IBAC’s reviews of public sector investigations have identified important considerations when undertaking internal investigation in the human services sector:

• Documentation/evidence to demonstrate that an investigation was conducted by a suitably qualified, experienced and impartial investigator
• Conflicts of interest should be declared on investigation files
• Procedural fairness, due process and welfare checks should be provided to the subject of an investigation. Timeliness should also be considered.
• Evidence collected and relied upon for findings and outcomes should be recorded and able to be provided to oversight agencies for review.
• Agencies should have an investigation policy able to be provided to subjects or bodies such as IBAC.

Where investigation reports make recommendations to an agency where the alleged corruption occurred:

• Evidence of improvements to the relevant systems/policies/procedures to prevent future occurrence should be recorded
• If not implemented, the reasons for this decision should be recorded by the agency
• Sometimes further investigation is recommended.