ICAC’s first report on state of corruption in NSW warns of evolving risks

Tuesday 4 December 2018

The first NSW Independent Commission Against Corruption (ICAC) report on current trends in corruption and integrity in the NSW public sector warns the public sector to be wary of risks associated with blurred lines between government and non-government sectors, badly-managed organisational change, and rules that unintentionally can encourage corrupt conduct.

Corruption and integrity in the NSW public sector: an assessment of current trends and events, released today, takes stock after nearly 30 years of ICAC operations of the nature of corruption and integrity in the NSW public sector.

The report examines not only the types of corruption that are a regular source of complaints to the Commission, such as conflicts of interest, but also looks at the risks brought about by changes in the way government services are delivered.

ICAC Chief Commissioner the Hon Peter Hall QC said that while the level of public sector corruption in NSW is low by global standards, there is no room for complacency and that public sector agencies should heed the tips and advice in the report.

“The nature of corruption is that it does not stagnate,” Chief Commissioner Hall said. “As the report says, if systemic and operational weaknesses are not addressed, corruption can take hold and cause significant damage to an agency’s finances, productivity and reputation. And there are plenty of cases canvassed in this report that have been investigated by the ICAC and other agencies which demonstrate the dire consequences of being caught short by corruption.”

One of the evolving issues is the blurring of lines between public, private and not-for-profit sectors, a theme that occurs throughout the report. The report notes that the changing nature of the public service is such that relationships between these sectors have shifted so significantly that the lines between them have diminished. This has resulted in potentially high-risk situations, for example, where contractors have been issued with public sector credit cards, or where consultants or advisers are acting for both the government and a counterparty involved in a transaction.

The report also warns that the ICAC has identified a potential relationship between corrupt conduct and organisational change, with a number of investigations showing opportunities for such conduct can arise either during or after a period of organisational change. It also notes that, while often well-intentioned, key performance indicators (KPIs) can also create preconditions for corruption. Rules can have unintended consequences, for example, a policy or rule that unspent recurrent appropriations must be returned to Treasury, meant to encourage fiscal responsibility and accountability, could actually encourage breaches in procurement policy at year’s-end and paying for good services not delivered or not required.

Other topics explored in the report include whistleblowing, human resources, procurement and contract management, regulation and accreditation and non-government organisations. The report can be downloaded from the ICAC website.
 
Media contact: ICAC Manager Communications and Media, Nicole Thomas, 0417 467 801.

Corruption and integrity in the NSW public sector: an assessment of current trends and events