Victoria’s anti-corruption agency has alleged that the state government’s procurement of services from Oracle and CSG Services for its failed Ultranet project was subject to process corruption, improper diversion of funds, conflict of interest, and mismanagement at senior levels.
The Operation Dunham investigation, carried out by Victoria’s Independent Broad-based Anti-Corruption Commission (IBAC), alleges that the tender process for Ultranet was improperly influenced and “therefore corrupted”.
Operation Dunham, which was launched in 2014, was set up to investigate the allegations that the tendering process in relation to the Ultranet project – in particular, the awarding of a contract CSG Services (CSG), which was at the time owned by CSG Limited – may have been compromised.
A report resulting from the investigation, tabled in Victorian parliament on January 27, alleges that improper relationships that certain senior departmental officers had with Oracle, and then with CSG, “effectively corrupted” the project’s tender process.
This corruption, the report claims, ultimately led to the “waste of millions of dollars of taxpayers’ money”.
The Ultranet project, which came under the jurisdiction of Victoria’s Department of Education and Training, was first announced in 2006. At the time, the state government made a commitment to “revolutionise learning” through the development and implementation of an online teaching and learning system for all Victorian government schools.
The online platform was to be a virtual learning portal through which schools, students and parents could access and deliver curriculum content, student reports and other information.
However, the Ultranet project was closed down seven years later, in 2013. It was described during the investigation as “a shambles in every sense of the word,” according to IBAC.
“While the exact cost is unknown, IBAC heard evidence that the Ultranet was likely to have cost somewhere between $127 million and $240 million,” the report said.
The report said that Darrell Fraser, former Deputy Secretary of the Department’s Office for School Education, is central to many of the allegations examined in the investigation.
IBAC alleges that Fraser, as a former principal at Glen Waverley Secondary College (GWSC), had played a critical role in promoting the project that would evolve into the Ultranet.
“GWSC is significant in this history as the Ultranet had its origins in the GWSC Intranet, a system developed on-site by teachers and staff at the school,” the report stated.
Later, as Deputy Secretary of the Department, Fraser had a central role in relation to the tender process for the Ultranet project, IBAC alleges.
The anti-corruption agency goes on to claim that, in July 2011, Fraser resigned from the Department to take up employment with CSG. It is understood he is no longer employed by the company.
“From the outset, and while a school principal at Glen Waverley Secondary College (GWSC), Fraser sought to exploit the commercial potential of the technology that would become known as the Ultranet; he did so in a way that was not in keeping with the standards of conduct expected of a public servant,” the report stated.
“This investigation found that, from a position of power as a senior executive responsible for the allocation of significant funds, Fraser was instrumental in manipulating procurement processes to ensure the Ultranet contract was awarded to the CSG/Oracle consortium – companies with whom he had a longstanding relationship,” it said.
Along with CSG, IBAC alleges that Oracle was “greatly advantaged” by its participation in an earlier project called, Students@Centre, which is considered a precursor to the Ultranet project.
“Having been given what an Oracle executive regarded as the ‘box seat’, Oracle was able to identify, develop and strengthen relationships with key people in the department who were in a position to influence the future tender process, particularly including Fraser,” the report said.
Meanwhile, IBAC claims it was alleged that a payment to procure Alliance Recruitment in 2011 to conduct an evaluation of the Ultranet project was a mechanism contrived by Fraser and senior CSG executives to “corruptly” inject funds into CSG to ensure it remained economically viable.