Education department IT manager directed $14m work to his own company

A senior project manager in Victoria’s Department of Education and Training misused his position for more than a decade to direct almost $14 million-worth of work to a company he owned, the state’s anti-corruption watchdog says.

The long-serving IT project manager had a reputation within the department as an exceptional performer and “go-to guy”, but was alleged to have corruptly used his position to sub-contract work to a company he was the sole director of for 13 years.

The Independent Broad-based Anti-corruption Commission said its investigation had also uncovered serious failures of supervision in the department's senior ranks, which allowed the project manager to improperly benefit from his position for many years.

"The manager was able to bypass proper processes in order to obtain an unfair advantage for his company, which disadvantaged competing IT suppliers but benefited him," the watchdog said on Wednesday.

The project manager had openly declared his connection with the company he funnelled work to some colleagues, however the connection was not widely known across the rest of the department, IBAC found.

IBAC held private examinations with seven witnesses in late 2017 as part of its investigation.

The project manager repeatedly claimed when interviewed by IBAC that he had told people he was the director of the company. However, he failed to declare his conflict of interest in writing.

The available evidence was not sufficient to support criminal charges, IBAC said.

IBAC’s report on Operation Betka was tabled in State Parliament on Wednesday.

"Operation Betka found the failures of those supervising this project manager were striking”, the watchdog said in a statement.

“Managers were aware of the project manager’s conflict of interest yet they failed to take meaningful steps to remove that conflict or to effectively manage his conduct.”

Another contractor who worked in supporting roles with the manager raised concerns about his conflict of interest on several occasions to no avail, the report states.

The manager also used his position within the department numerous times to inform his company's staff of upcoming roles.

The department terminated all contracts with the IT project manager in July 2016, following an audit by its integrity and assurance division.

The internal audit examined the Edugate Extension Project over concerns of excessive expenditure, but found that staff at the project manager's company had been contracted in breach of Victorian public sector rules.

Following termination, the project manager withheld payment of salaries to some of his company's contractors. Some staff were eventually paid what they were owed but others were not.

The project manager argued that the non-payments were legitimate because those staff had signed a non-compete clause.

"Under examination by IBAC, the project manager failed to acknowledge the conflicts of interest between his public duties as a departmental contractor and his private interests," the report states.

Despite having worked for the department for more than a decade, the project manager did not appear to understand it was inappropriate and unethical to be involved in procuring his own staff, IBAC said.

IBAC has recommended the Department of Education and Training "address the corruption vulnerabilities identified in Operation Betka", and advise the watchdog how it will ensure that employees fully declare any conflict of interest.

The department has been asked to report to IBAC on the implementation of these recommendations by November 30.

It is not the first time IBAC has unearthed failings by the same department to prevent its staff or contractors misusing their positions for financial gain.

Last week former department executive Nino Napoli pleaded guilty to conspiracy to defraud the state government and perverting the course of justice for misappropriating school funds.

The plea followed an IBAC investigation into a rort of the department's "banker school" system.

The Department of Education and Training has been contacted for comment.