Two senior managers overseeing the $50 billion National Disability Insurance Scheme are on leave while the agency reviews damning findings made against them in a Victorian integrity investigation into COVID-19 business grant rorts.
National Disability Insurance Agency chief executive Graeme Head confirmed to Senate estimates on Thursday that “neither officer is on duty” and that he was considering what action to take in response to the Independent Broad-based Anti-corruption Commission’s (IBAC) findings.
A report by IBAC released earlier this month found that three senior Victorian public servants withheld or provided misleading information about the payment of COVID-19 business grants to ineligible applicants, which the watchdog estimated cost taxpayers almost $260 million.
This masthead revealed on Wednesday that the two most senior of the three went on to secure management positions at the NDIA, which administers a $50 billion scheme supporting 782,000 people and has been beset with fraud and waste.
The NDIA spent two weeks refusing to answer questions from this masthead about the pair’s employment.
But on Thursday, Head confirmed to estimates that “two current NDIA employees are the subject of adverse findings by IBAC in its Operation Harmonia special report”.
“I acknowledge that there is legitimate community interest in this matter, particularly given the importance of integrity and public confidence in the National Disability Insurance Agency and the administration of the National Disability Insurance Scheme,” he said.
“As agency head, I am taking all steps available to me to ensure the matters are considered carefully and appropriately. That work is under way.
“Neither officer is on duty, and we’re going through a process to examine everything that’s relevant around the officers’ time in the agency.”
Head said he was restricted in what he could say about the two officers because he did not want to compromise the process under way to consider IBAC’s findings.
That included identifying the two officers. IBAC identified the two public servants by their positions – “associate secretary” and the “deputy secretary” – and this masthead also chose not to identify them.
Asked by Liberal senator Anne Ruston about whether the NDIA knew about the IBAC investigation when the pair were hired, Head noted that individuals subject to investigations were generally gagged from speaking about them. He said he would also have to consider the timeline of when IBAC’s investigation started.
“All of those things … are being worked through as part of the process that I need to go through, in order to be able to consider matters and take any action that I consider appropriate,” he said.
IBAC’s investigation found there was widespread rorting of the Victorian government’s Business Costs Assistance Program, intended to help businesses affected by pandemic lockdowns.
Businesses had to be registered for GST to claim the grants, worth up to $97,200 each. But in November 2021, the department’s integrity services unit estimated almost $285 million had been paid to businesses that were ineligible but had claimed the grants by legally backdating their GST registration.
That information was included in a report brief intended for the then-minister, Martin Pakula, and the state auditor-general.
However, IBAC found the deputy secretary directed that the information be deleted from the report after discussing it with the associate secretary, who also failed to disclose the suspected significant loss of public money to their boss, department secretary Simon Phemister.
IBAC found this was a “a clear failure to act in line with the high integrity standards expected of Victoria’s public officers”.
The two public servants disputed IBAC’s adverse findings. The deputy secretary told IBAC he was simply following instructions from his boss, the associate secretary.
The associate secretary said they did not escalate the suspected grant fraud because she disputed the department’s integrity team’s analysis, which suggested almost $285 million had been paid to ineligible applicants.
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