Governance breakdowns– insights from ICAC

Stephen Wood MBA

Senior Corruption Prevention Officer

6A

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Scale and breadth of corruption

• What is the level of public sector corruption?

• Is it going up or down

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Key trends

• Change in public sector approaches

• Blurring of lines

• Organisational change

• Constrained capability

• Gig economy

• Technology and cybercrime

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NSW Snapshot

• NSW public sector exceeds $100B in revenue, $110B in expenditure and manages over $550B in assets1

• 24% witnessed misconduct – 66% reported it2

• 44% of surveyed agencies reported 1077 frauds averaging $21K• Average for procurement related was $225K3

1 Calculated from NSW Budget Statements 2018-19 together with 2017 financial statements of universities and local councils

2 People Matter Survey Main Findings Report 2018

3 NSW Audit Office Fraud Survey for period 1 July 2012 to 30 June 2015

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Systemic issues

• Three main categories• Individuals

• Management of business units or organisations

• Organisational processes

• Opportunity rarely created – predominantly violation of procedure/policy/regulation

• Inter-related systemic risk areas

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Common governance failings

A few recent and past examples:

• Tarlo

• Yarrow

• Ricco

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Building better processes and controls• Performance measures

• Complaint management

• Conflicts of interest

• Human resource management

• Procurement

• Regulatory activity

• Non-government organisations

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Summary

• ability to exercise unilateral control over key decisions

• use of discretion and existence of potentially inappropriate relationships

• supplier due diligence

• analytics

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Further information

• www.icac.nsw.gov.au

• icac@icac.nsw.gov.au

• swood@icac.nsw.gov.au

• +61 2 8281 5999

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Questions

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