IBAC is Victoria's anti-corruption body responsible for preventing and exposing public sector corruption and police misconduct.
The following is a summary of an IBAC investigation called Operation Betka.
In August 2016, IBAC commenced an investigation into corruption allegations against a contracted project manager at the Department of Education and Training.
IBAC investigated allegations the project manager was using their position within the IT division to source IT contractors from a company they owned for personal benefit.
This company provided almost 40 million dollars in contracted staffing resources to the Department of Education and Training between 2003 and 2016.
IBAC found the project manager failed to formally declare and manage a conflict of interest posed by the project manager's role as director of the IT company and the services that company provided to the Department of Education and Training.
Because this conflict was not managed the project manager was able to misuse departmental information to influence processes for procuring contracted staff and obtain an unfair advantage over other IT contractor suppliers.
IBAC found those responsible for supervising the project manager failed to manage the conflict of interest by not documenting reporting or monitoring the conflict. The supervisors also failed to understand and apply public sector processes around the engagement of contractors.
IBAC found the actions of the project manager undermined the integrity of the Department's procurement processes. Such processes help ensure fairness for suppliers and value for money; as well as ensuring that decisions about public services and projects are made in the best interests of the public.
The Department of Education and Training ceased the project manager's engagement in July 2016 and the project manager's companies submitted an application to deregister in October 2016.
IBAC has made two recommendations to the Department of Education and Training to address issues identified in Operation Betka.
The first recommendation is for the department to strengthen controls around engaging and overseeing contractors.
The second is to ensure employees and contractors understand and comply with the department's conflict of interest framework.
Operation Betka highlights the importance of declaring and managing conflicts of interests and having strong systems practices and controls around procurement processes, including around engaging contractors.
Operation Betka demonstrates how important it is that government employees understand public sector processes such as those associated with the staffing services state purchase contract.
Operation Betka also shows that government institutions must ensure contractors, public sector employees and supervisors fulfill their obligations to act in the public interest.
All public sector agencies face corruption risks related to poorly managed conflicts of interest and procurement processes. Agencies should consider whether their existing systems processes and controls are sufficient to identify and help prevent such risks.
There may be opportunities to strengthen controls such as audits and improve staff understanding of policies and systems through training or better access to relevant information.
To download a copy of the report, visit www.ibac.vic.gov.au.