How poor management of complaints can result in major problems: Learnings from a recent ICAC investigation

In mid-November 2021, the NSW Independent Commission Against Corruption (the ICAC) made public the report on its investigation into the sourcing of software systems for the Western Sydney Institute of TAFE (WSI).

This investigation concerned allegations that the WSI Finance Manager and another Finance Officer accepted payments totalling approximately $449,000. The Finance Manager also accepted gifts including a laptop computer, a cordless telephone, and installation of built-in cupboards at his home as inducements to show favour to the provider of budgeting and planning software known as iPlan.

Inadequate investigation of complaints

Complaints and enquiries into the Finance Manager’s behaviour and procurement processes stretched across multiple years:

• September 2014: Peers of the Finance Manager periodically raised concerns about procurement processes.
  
• Early 2015: An informal complaint about procurement non-compliance resulted in the then-WSI Director making some enquiries with the Finance Manager and his immediate supervisor. The enquiries relied on the information provided solely by the Finance Manager, without any independent verification of that information. During his compulsory examination, the Finance Manager admitted that he falsified records when responding to the enquiries made at that time
  
• July 2016: A public interest disclosure (PID) verbally received alleged an association between the Finance Manager and the provider, and raised concerns with overcharging, among other things. It was not investigated because the discloser withdrew the PID when asked to put it in writing.
  
• May 2017: TAFE engaged an external investigator to investigate allegations received concerning the iPlan software procurement and reported the matter to the ICAC.
  
• November 2017: TAFE advised the ICAC that it had concluded its investigation.
  
• April 2018: TAFE advised that ‘the matter was investigated by an independent service provider and [sic] concluded the matter was unsubstantiated’.

The ICAC investigation revealed scant records of any investigations of the matter.

ICAC Findings

The final report found that the Finance Manager may not have complied with TAFE procurement rules, exceeded their delegation, and may have breached the TAFE code of conduct.

The report also recommended putting four allegations to the Finance Manager, but NSW TAFE decided that there was insufficient evidence to do that. The Finance Manager’s supervisor and that supervisor’s manager were closely involved in that decision-making. The ICAC report found this was ‘less than ideal’ because both of these people were involved in the procurement strategy involving the selection of the provider of the software, and the supervisor had approved seven purchase orders exceeding $500,000 in that year.

The ICAC was satisfied that a more robust complaint handling and investigative process would have resulted in a formal disciplinary process being instituted at that time and that the corrupt conduct could have been prevented or at least identified earlier.

What we can learn

The report, which you can read here, includes 14 recommendations of a range of measures to prevent future similar corrupt activity.

The immediate learnings relating to ensuring agencies have effective complaint handling and investigations protocols in place are:

• encourage complaints about possible corruption and make timely and careful assessments of them
• when there is a reasonable suspicion that there may be substance to a complaint, make a timely report of the matter to the ICAC in accordance with section 11 of the Act
• if the ICAC determines that your agency is to conduct further enquiries, engage an independent external provider to investigate the matter
• keep the matter strictly confidential and delay advising the subjects of complaint until evidence has been gathered, assessed, and secured
• do not accept respondents’ denials of wrongdoing or information they provide on face value
• ensure decision makers were not involved in any matters related to the complaint
• support and protect whistle blowers
• document all action taken and decisions made at every stage

Ensuring quality, independent and confidential investigation services

Ineffective management of complaints or conduct issues can easily result in wrongdoers not being held accountable for their actions. It also leaves organisations open to considerable reputational damage.

Incidents like the one above emphasise the importance of following up all complaints and undertaking independent investigations to ensure reports are thorough and there is potential for subsequent accusations of lack of impartiality or bias.  

Centium provides investigation services to more than 100 organisations and has conducted more than 2,000 workplace and code of conduct investigations over the last two decades. Our Ethical Conduct & Investigations specialists are committed to assisting our clients to achieve and maintain a robust governance framework and an ethical workplace culture. We can investigate misconduct, review reports and provide practical advice to improve complaint handling systems and processes.

To learn how we can assist your organisation, please contact Peter Mulhall, Director, Ethical Conduct & Investigations on peter.mulhall@centium.com.au or 0416 161 819 or browse Centium's Ethical Conduct & Investigations services.