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ICAC finds UNE officer corrupt after dinners, deals and dollars

Thursday 30 August 2012

The Independent Commission Against Corruption (ICAC) has found that University of New England (UNE) campus services manager Colin McCallum engaged in corrupt conduct by accepting free hospitality and other benefits from UNE contractors in return for favouring them in the exercise of his official functions. He also arranged the approval of false invoices that allowed the contractors to be paid money from the university to which they were not entitled.

In its report on the Investigation into the conduct of a University of New England (UNE) procurement officer and UNE contractors, released today, the Commission finds that Mr McCallum's dealings with suppliers included his receiving hospitality such as meals, raceday and rugby match attendance, and hotel accommodation, but not disclosing the hospitality to anyone at the university. Mr McCallum knew he should not accept the contractor's hospitality and that his acceptance was contrary to the UNE code of conduct and the gifts and benefits policy.

The Commission has made five corruption prevention recommendations to UNE to address weaknesses in its procurement process that were highlighted by this investigation. These include that the management team of Facilities Management Services (FMS) at the university enforces a zero tolerance on gifts and benefits from FMS suppliers. The ICAC also recommends that UNE re-designs its procurement processes by taking into account opportunities for corruption and formalises the processes in policy.

In his dealings with Quad Services Pty Ltd, a contractor that had a cleaning services contract with UNE worth around $1.2 million annually, Mr McCallum was found to have acted corruptly by: accepting free hospitality; arranging to have Quad Services issue invoices to UNE that came to approximately $29,000. These invoices falsely described the costs associated with the van used by the company and a five per cent administration fee as "external cleaning". This enabled Quad Services to be paid by the university monies to which it was not entitled. Mr McCallum was found to have deliberately failed to disclose his conflict of interest arising from accepting the free hospitality. Quad Services' Dobrilla Cutler engaged in corrupt conduct in causing the company to issue invoices to UNE that she knew falsely described the costs associated with the van used by Quad Services and the five per cent administration fee.

In relation to Sydney Night Patrol and Inquiry Services (SNP) Pty Ltd, Mr McCallum engaged in corrupt conduct by accepting free hospitality and arranging to have SNP issue invoices to UNE totalling about $19,400 that falsely described the costs associated with a vehicle as "alarm service" work so that SNP could obtain money from UNE that he knew UNE would not otherwise pay. Mr McCallum approved payment of those invoices. SNP's Martin McLean engaged in corrupt conduct by causing SNP to issue invoices to UNE, which he knew falsely described the costs associated with the vehicle as "alarm service" work to obtain money for SNP.

At the same time he was employed by UNE, Mr McCallum was executive officer of New England Rugby Union (NERU). He approved payment of SNP invoices for the provision of security guards at NERU matches, thereby falsely representing that the approximately $5,700 in charges in the invoices had been incurred for the benefit of UNE. He also dishonestly arranged for a NERU debt of approximately $2,000 owed to UNE Hockey to be paid by Sport UNE in return for UNE not billing Sport UNE for two months' cleaning in 2008, and dishonestly arranged for Sport UNE to waive payment by NERU of venue hire fees of $9,635 in return for UNE not billing Sport UNE for two months' cleaning in 2010.

Mr McCallum also accepted free meals and alcohol from Prosys Services Pty Ltd, a contractor that received approximately $2.4 million from UNE between 2004 and 2012 for security access system work.

He also entered into an agreement with Prosys Services whereby he engaged the company to undertake work for UNE, for which the university would pay Prosys Services $7,000, in return for the company contributing $7,000 towards a private NERU function. Mr McCallum approved payment of an invoice in furtherance of the agreement. Corrupt conduct findings are made against Neville Magi of Prosys Services for entering into the agreement with Mr McCallum and for causing Prosys Services to send a quote and invoice to UNE in furtherance of that agreement.

The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions with respect to the prosecution of Mr McCallum and Mr McLean for various offences.

The ICAC held a public inquiry over five days, between 23 January 2012 and 2 February 2012. Assistant Commissioner Theresa Hamilton presided at the public inquiry, at which 14 witnesses gave evidence. Mr McCallum was suspended from his employment in March 2011 as a result of the ICAC investigation and resigned on 8 February 2012.

Investigation Report   Fact Sheet

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