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ICAC finds former Education Department IT contractor corrupt

Wednesday 18 January 2012

The Independent Commission Against Corruption (ICAC) has found that a former information technology (IT) contract project manager at the then Department of Education and Training engaged in corrupt conduct by manipulating the recruitment and payment processes at the department so that he could financially benefit personally in the order of more than $400,000.

In its report on the Investigation into alleged fraud on the former NSW Department of Education and Training, released today, the Commission finds that David Johnson engaged in corrupt conduct by preparing and presenting contractor assessment forms containing false representations to the department to obtain approval to engage five people associated with Mr Johnson's own private company, Ogawie Pty Ltd, as contractors so that he could benefit financially from those appointments.

Between March 2008 and January 2009, Mr Johnson earned $293,934.32 (plus GST) through Ogawie from the services performed by the five contractors. Most of the contractors were not aware of the margin received by Ogawie for their services, which ranged from $32.90 to $57.90 per hour, until the Commission's investigation took place.

The ICAC finds that Mr Johnson also engaged in corrupt conduct by falsely representing that two of those Ogawie contractors had performed services for, and on behalf of, the department, when they had not, again so he could benefit financially. To facilitate this, Mr Johnson signed timesheets for the contractors to falsely represent that they had performed the services. The total benefit received by Ogawie, and ultimately Mr Johnson, in this instance was $84,765.60 (plus GST).

Mr Johnson further engaged in corrupt conduct by falsely representing that another IT company, Catalina IT, was an approved contractor and by purporting to authorise payment of two invoices received from the company so he could benefit financially from its engagement to provide services. In this case the total benefit to Mr Johnson was $82,000 (plus GST).

Since this investigation, the newly created Department of Education and Communities (DEC) has taken steps to address a number of the problems that had occurred due to the lack of safeguards within the department that enabled Mr Johnson's corrupt conduct.

The ICAC has made seven corruption prevention recommendations to address outstanding issues including that the DEC's Information Technology Directorate (ITD) reviews its use of contract staff, and that the ITD takes measures to verify the arrangements surrounding the contracting of individual personnel including personnel pay rates, how contracted personnel were sourced and to whom personnel are contracted.

The Commission is of the opinion that the advice of the Director of Public Prosecutions should be sought with respect to the prosecution of Mr Johnson for offences of obtaining money by false or misleading statements, contrary to section 178BB of the Crimes Act 1900.

The ICAC held a public inquiry over three days in August 2011. Assistant Commissioner Theresa Hamilton presided at the public inquiry, at which 15 witnesses gave evidence.

Investigation Report   Fact Sheet

Media enquiries: ICAC Manager Communications & Media Nicole Thomas 02 8281 5799 / 0417 467 801