Fraud in focus: lessons learnt ahead of the Commonwealth Integrity Commission

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Prior to the Federal Government's decision to introduce a Commonwealth Integrity Commission, Lander & Rogers' Public Sector Industry team facilitated two key events on the subject of integrity within the public service.

A combination of failures led to a climate in which fraud could develop

Featuring prominent government leaders — the Honourable Robert Redlich QC, Commissioner for the Independent Broad-based Anti-corruption Commission, and Kate Rattigan, Victorian Department of Education and Training Deputy (DET) Secretary (People and Executive Services) — a common theme emerging from these events was that, when it comes to corruption in the public sector, from little things, big things grow.

Referring to the IBAC Operations Ord (Banker Schools) and Dunham (Ultranet), Deputy Secretary Kate Rattigan, speaking to nearly 100 public sector professionals at our lunch, indicated that a combination of failures contributed to a climate in which fraud of that magnitude could develop, rather than a single event or a momentary lapse of judgement. Low levels of accountability, unilateral decision making powers, an ethically neutral culture, non-existent reporting systems, and a variety of other factors helped to create an environment in which misconduct went unchallenged. If there is a silver lining for government bodies like the DET, it is that these underlying issues can be addressed.

Culture is the first line of defence

The first line of defence in guarding against improper conduct is a culture of integrity. Critically, this culture needs to be owned, lived, and communicated at the highest level within organisations. Kate indicated that part of the journey to acceptance for DET staff was in the demonstration from departmental leaders that change was not only desirable, but necessary. Only by addressing culture, would the proposed smart systems and controls recommended by IBAC be effective. In addition to demonstrative leadership, empowering people to call out or question behaviour as it happens is also key. We have seen this same dynamic within the context of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry, and Aaron Goonrey, partner at Lander & Rogers, previously outlined the risks associated with 'cultures of complicity'.

Success will be measured on positive outcomes

There is reason to suggest that the tide is slowly turning, with IBAC processing around 60 complaints per fortnight and community interest in public service integrity at historic levels. It's worth noting that the 'success' of an integrity commission like IBAC, or indeed the proposed Commonwealth Integrity Commission, should not be measured by its 'criminal catch count' or conviction record. Both IBAC and ICAC see victory as improved outcomes, including a more educated public service and a greater degree of trust in government institutions. This is where the lessons learned and new measures implemented by DET can be viewed as a significant success story over the long-term.

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