The National Anti-Corruption Commission’s main focus will be on public servants and government procurement contracts, rather than politicians, when it begins operations mid-year if the experience of state integrity bodies is repeated at the federal level.
ArcBlue, a leading procurement and supply chain consultancy, is advising public servants to get ready now for the new body which will expose them to increased personal risk.
Justin Sara, ArcBlue’s Public Sector Director, said procurement would be front and centre in the NACC’s investigations, and he urged public service leaders to ensure contemporary corruption prevention strategies are in place across all public sector agencies.
It is essential that these prevention strategies contain specific measures for procurement and contracting.
In Western Australia 54 per cent of investigations undertaken by its Corruption and Crime Commission related to procurement, while New South Wales’ Independent Commission Against Corruption received a new complaint about procurement every 1.4 days. In Queensland, 7830 public servants identified procurement as highly vulnerable to corruption.
The Federal Parliament passed legislation to introduce the NACC last year, giving the body the power to detect, investigate and report on serious or systemic corrupt conduct in the Commonwealth public sector.
Mr Sara said most public servants underestimated the personal career risk they now faced with the introduction of the NACC, particularly if they were a delegate or decision-maker in a procurement process.
“We are saying to public servants and agencies, don’t wait and react; that there is a significant benefit in proactively managing and addressing your compliance risk’’
Risk need to be addressed head on, not only to protect the public from avoidable loss, but because once an investigation is commenced by an integrity body, it can have significant and disruptive effects on the careers and lives of those involved.
ArcBlue, after operating across Australia for 10 years, opened a Canberra office in January 2023, headed by Adam O’Brien, who has held roles as head of legal, risk and procurement within the APS.
Mr O’Brien said there were compelling reasons to prepare fraud and corruption prevention strategies early. Apart from satisfying requirements in the Public Governance, Performance and Accountability Act, plans to prevent corruption in compliance could help arrest the decline in public trust essential to public sector administration, reduce the misuse of public funds and lower the risk of professional and personal reputational damage.
“In our view there is a need for the Commonwealth public sector to set up specific procurement and contracting corruption prevention strategies that can respond to the risks that are present,’’ Mr O’Brien said.
Key elements involved becoming familiar with interstate case studies and global best practice in procurement, then educating leaders and teams to build the case for investment in a corruption prevention strategy.
The existing risk profile of the organisation should then be assessed, along with its preparedness to combat corruption, before moving on to designing and implementing the corruption prevention strategy.
“We are saying to public servants and agencies, don’t wait and react; there is a significant benefit in proactively managing and addressing your compliance risk,’’ Mr Sara said.
The effects of a corruption finding could be long-lasting for organisations and individuals
Take the impact on a Queensland government agency of the so-called Tahitian Prince case.
This involved a finance manager who tried to explain his wealth by telling colleagues he was a Tahitian Prince. He pursued the ruse to the extent that he had ‘HRH’ (His Royal Highness) engraved on a black American Express Card he used at Brisbane nightclubs.
It emerged that instead of being a Tahitian Prince, he was a fraudster from New Zealand who stole around $16m. He was jailed in 2013 and deported to New Zealand on his release in 2020.
“That’s obviously an example of where things do go wrong but the point is that the conduct went unchecked for over two years and during that time caused significant damage.
“Even a decade later, everyone knows, certainly when it comes to fraud and corruption about the Tahitian Prince case.’’
In May 2019 a former Public Officer for an emergency services agency was jailed for three years, to serve six months, after pleading guilty to four counts of official corruption.
At the time of the offences, the Officer managed a unit that handled a significant amount of procurement, including sourcing uniforms, cleaning and decontamination of uniforms, and warehousing of inventory.
The Officer arranged secondary employment at two companies that were tendering for work at this place of employment and assisted them in preparing tenders for work worth more than $10m. His assistance included releasing confidential tender information before it was publicly available, providing technical knowledge and feedback and making recommendations to selection panels in their favour.
Mr Sara said it was important to keep meticulous records of meetings and communications during the procurement and contract management process and for public servants to be aware that complaints could come from unexpected sources.
With the NACC’s commencement fast approaching, now is the time for public sector procurement teams to take action
First and foremost, public servants should review and develop their corruption prevention strategies to ensure both structural and cultural measures are implemented to combat corruption risk.
Further, involving probity advisers early in higher-risk procurement and contracting activities is another effective and immediate measure procurement officials can take to mitigate risk.
“One of the challenges we see as probity advisers is we get engaged late. By that stage a lot of things are already locked in and I suppose our simple message is what we can’t see, we can’t provide assurance on. You wouldn’t ask your mechanic to say your car was okay without them looking at it,’’ Mr Sara said.
ArcBlue is hosting a free breakfast seminar How Public Sector Procurement Teams can prepare for the introduction of the NACC at East Hotel, Kingston on Tuesday, May 2.
