In April 2021 the Commission finalised a corruption investigation into a Registered Training Organisation’s manipulation of its contract with the then Department for Innovation and Skills.

While no charges were recommended, the investigation established that the organisation had manipulated its receipt of subsidies from the Department in circumstances where they were not providing the training outcomes their contract stipulated. Using false reporting codes the organisation was able to trigger the release of payments while the department remained unaware they were not receiving the training services they were paying for.

In response to observations about the improper and manipulative conduct of this contractor, and awareness of similar dishonest contractor conduct discovered during previous investigations, on 16 June 2022 the Commission released its report Received or Deceived? Managing and monitoring the conduct of government contractors.

The report examines the administrative and governance failures which provides opportunity for suppliers and contractors to government to defraud public money through the manipulation of their contracts. Improper supplier behaviour of this sort is often stimulated by poor processes in contract design, management and monitoring at government agencies.

Corruption prevention insights gained from the investigation and discussed in the report include:

  • Do not rely on a ‘system of trust’ with regard to contractors fulfilling their contracted goods and service obligations. As far as possible, verify the receipt of the goods or services.
  • When contract management is done through complex administrative arrangements, software systems, reporting methods or processing codes, effort must be made to streamline processes to avoid unnecessary confusion. Administrative confusion is a breeding ground for corruption, because opaque systems lack integration, ownership and accountability.
  • Make sure staff are aware of their specific roles and responsibilities, especially in procurement, contract management, monitoring and auditing. Overlapping or diffuse accountabilities create conditions where staff are unsure who has ultimate responsibility for things. In such circumstances, dishonest or manipulative behaviour is often overlooked.
  • Ensure that your contracts with suppliers are designed in such a way as not to incentivise improper behaviour.
  • Ensure your agency has the necessary resources, capabilities and procedures in place to monitor and audit suppliers’ compliance with contracts.

In the particular matter outlined in ‘Received or Deceived’ the agency took action to address the identified deficiencies. The Commission encourages all public authorities to consider the report and reflect on how their processes of contract development, management and monitoring can potentially improve in by considering these matters.

Read the full report here.