NSW Department of Family and Community Services - allegations concerning a headlease coordinator (Operation Cygnet)

Year: 2020 Status: Completed

The ICAC investigated an allegation that Chanse Baynham, while employed as a headlease coordinator at the then NSW Department of Family and Community Services, between 1 January 2015 and 31 December 2017, awarded work to his own company to gain a financial benefit.

The Commission also examined an allegation that Mr Baynham authorised the payment of public funds for private work undertaken at his residence.

In its report on the investigation, made public on 27 August 2020, the Commission makes findings of serious corrupt conduct against Mr Baynham.

The ICAC is of the opinion that the advice of the Director of Public Prosecutions should be obtained with respect to the prosecution of Mr Baynham for offences of misconduct in public office and fraud.

The Commission also makes 14 corruption prevention recommendations to assist the Department of Communities and Justice to improve its systems and help prevent the recurrence of the conduct exposed in the investigation.

After taking into account matters set out in section 31 of the Independent Commission Against Corruption Act 1988, the Commission was not satisfied that it was in the public interest to conduct a public inquiry as part of this investigation. Instead, the Commission was satisfied that the matters raised in the investigation could be addressed satisfactorily by way of a public report pursuant to section 74(1) of the ICAC Act.

Findings of corrupt conduct

The ICAC found that Chase Baynham engaged in serious corrupt conduct by:

  • between August 2015 and February 2018, improperly exercising his official functions as a headlease coordinator to obtain $1,673,330 for his company, Sardonyx Project Management Pty Ltd, by authorising payments himself, or arranging for the authorisation of payments, to real estate agents/owners for work on properties leased by the NSW Land and Housing Corporation, knowing that the real estate agents/owners would then pay Sardonyx Project Management
  • misusing information or material acquired in relation to properties at 62 Mason Street, Maroubra, and 1 First Avenue, Maroubra, and, as a consequence, securing work for Sardonyx Project Management at the two properties
  • authorising the payment by the Department of Family and Community Services of two invoices dated 2 February 2017 and 10 March 2017 purportedly from contractor AJ Frankfort for work carried out at 23 Centennial Street, Marrickville, which he knew to be false in order to obtain the invoiced amounts totalling $16,970.80 for the benefit of Sardonyx Project Management.

Recommendations for prosecutions

The Commission must seek the advice of the Director of Public Prosecutions (DPP) on whether any prosecution should be commenced. The DPP determines whether any criminal charges can be laid, and conducts all prosecutions. The Commission provides information on this website in relation to the status of prosecution recommendations and outcomes as advised by the DPP. The progress of matters is generally within the hands of the DPP. Accordingly, the Commission does not directly notify persons affected of advice received from the DPP or the progress of their matters generally.

The ICAC is satisfied that there is sufficient admissible evidence to seek the advice of the DPP with respect to the prosecution of Chanse Baynham for the following offences:

  • misconduct in public office in relation to his involvement in the works carried out on headleased properties, including the authorisation of payments totalling $1,673,330 ultimately received by his company, Sardonyx Project Management Pty Ltd, and the misuse of information or material he acquired in the course of his official functions
  • fraud pursuant to section 192E of the Crimes Act 1900 in relation to obtaining a financial benefit through the creation of two invoices dated 2 February 2017 and 10 March 2017 purportedly from contractor AJ Frankfort, which he knew to be false.

Recommendations for disciplinary action

Chanse Baynham’s employment at the Department of Family and Community Services was terminated on 23 January 2019. The question of disciplinary action or terminating his employment therefore does not arise.

Recommendations for corruption prevention

The Commission makes the following 14 corruption prevention recommendations to assist the Department of Communities and Justice (DCJ) to improve its systems and help prevent the recurrence of the conduct exposed in the investigation:

Recommendation 1

That the DCJ reviews the design of its headleasing repairs process so that responsibilities for key activities are clarified and sufficiently segregated.

Recommendation 2

That the DCJ develops and enforces a clear and comprehensive set of policies and procedures governing the headleasing process. The policies and procedures should include:

  • assessing and negotiating the scope of repair work
  • recordkeeping requirements
  • sourcing and assessing quotations
  • extending rental payments.

Recommendation 3

That the DCJ develops and provides guidelines to real estate agents/owners of headlease properties concerning the headleasing process, including information about each party’s responsibilities regarding the repair process.

Recommendation 4

That the DCJ provides real estate agents/owners with a copy of its statement of business ethics.

Recommendation 5

That the DCJ changes its system for repair work to provide visibility over who is undertaking repair work, at what cost, for what property, and whether the work was performed.

Recommendation 6

That the DCJ develops systems to record, monitor and analyse expenditure patterns on its headleased properties.

Recommendation 7

That the DCJ develops a set of benchmarks, taking into account regional variations, related to the time and cost of different categories of repair work.

Recommendation 8

That the DCJ develops a system to ensure that rental payments cannot continue without senior authorisation after a headleased property is vacated. Any decision to extend rental payments should be subject to ongoing management review at set intervals.

Recommendation 9

That the DCJ develops a comprehensive position description for headlease coordinators that reflects the key skills and capabilities required for the role.

Recommendation 10

That the DCJ develops and periodically delivers training for all staff (including managers) involved in the headleasing process to equip them with the skills and knowledge required for the role.

Recommendation 11

That the DCJ considers proactive measures to help identify conflicts of interest and influence staff behaviour, such as requiring all headleasing staff to regularly complete declarations related to private work and conflicts of interest.

Recommendation 12

That the DCJ reviews its policies and procedures relating to secondary employment and private work to ensure they require managers to actively monitor compliance with requirements.

Recommendation 13

That the DCJ informs managers of existing employee secondary employment and private work approvals, including when reporting lines change.

Recommendation 14

That the DCJ reviews its internal investigations processes to ensure:

  • allegations are investigated by officers with sufficient skills and capabilities
  • matters are not closed inappropriately and are followed up when referred to other areas
  • investigation recommendations are implemented.

Responses to ICAC recommendations

The action plan posted below have been provided by the Department of Communities and Justice in response to the ICAC’s recommendations. Their publication here is to show the status of the responses. It does not constitute approval or endorsement by the Commission.

Plan of Action - Department of Communities and Justice

Media Releases
Witness

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Download the Witness List (PDF)

Transcripts

View all transcripts associated with this investigation. The Commission makes every effort to post the daily transcripts of its public inquiries on its website by 8:00 pm each day when possible. If the Commission sits later than 4:00 pm, the daily transcripts, particularly the afternoon session, may not be available until the next working day.

 

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