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Two Industry Department staff fired after internal fraud investigation
Updated September 25 2024
Three staff members from the Industry Department have had findings of fraudagainst them in the last 12 months, with two fired after investigations.
The Industry Department's fraud response team has conducted two investigations in the past 12 months, making findings against three staff members.
Questions were sent to the department about the nature of the fraud uncovered. However, the department was unable to comment further.
Two staff were fired as a result of the investigation and two were also sent warning letters. The department is pursuing one staff member to recover lost funds.
The department would not comment on whether these staff members were referred to the National Anti-Corruption Commission (NACC), however said investigators liaised with the Commonwealth Director of Public Prosecutions, the AFP and the NACC and had sought legal advice for the investigations.
Two fraud investigations have made findings against three Industry Department employees. Picture by Keegan Carroll
In addition to the findings against the individuals, the department has also moved to strengthen internal controls for information management, procurement and contract management, onboarding, offboarding and mandatory training.
Questions remain unanswered
The findings were revealed as senators continue to pursue the department over a bungled procurement procedure for a business development program, for which the department had to pay an estimated $1 million in compensation.
The department would not clarify whether the latest findings were following investigations into the procurement of the Entrepreneurs' Program in 2022, however The Canberra Times understands the matters are separate.
Greens senator Barbara Pocock, who has been questioning the department about its handling of the Entrepreneurs' Program, said the lack of information was a cause for concern.
"Any finding of fraud against a public servant is cause for concern and every department has a duty to be as open and transparent as possible about such cases," Senator Pocock said.
"While it's worrying to find out that two people were sacked recently by the Department of Industry, what's more concerning is the lack of information about these and other cases.
"The public needs to have confidence that they can rely on our public service and that any shortcomings will be rectified and anyone who has crossed ethical or legal boundaries will face appropriate consequences."
The recent fraud investigations were revealed after questions were asked in Senate estimates about allegations that one of the potential bidders in the Entrepreneurs' Program paid $900,000 to a contractor working in the department as a "success fee".
Questions are being asked of the Industry Department following the revelations. Picture by Keegan Carroll
The bidder was i4 Connect, a company that did not exist prior to the procurement process but was ultimately successful and awarded a $31 million contract, $10 million higher than the next highest bidder.
The recipient of the success fee, Northgate Australia, was working for the Department of Industry and had worked on the i4 Connect tender.
This allegation of corruption was first raised by one of the unsuccessful tenderers.
In June, DISR deputy secretary Neal Mason said an independent investigation had not found evidence of corruption in this matter as success fees were not covered by the contract at the time.
Senator Pocock said questions about these allegations remained unanswered.
"The key question in this whole saga revolves around the alleged $900,000 payment from i4 Connect to a department employee. So far, the department has refused to examine i4 Connect's books to confirm whether the payment was made and has given no sensible reason why it has not taken this step."
After failings with the procurement process came to light, unsuccessful tenderers have pursued the department for compensation.
Reports suggested the department is expecting to pay around $1 million in compensation, and has paid law firm MinterEllison $819,851.42 to settle these claims.
A scathing Audit Office report found significant issues with the way the procurement process had been run under the former Coalition government.
The procurement process for the $163 million program, which sourced business advisory services to assist startups and small businesses, did not follow Commonwealth procurement rules and contracts were not managed properly, according to the Audit Office.
Former auditor-general Grant Hehir said the department failed to demonstrate value for money.
The department later apologised to unsuccessful tenderers.