CSG Services, Oracle named in Victoria’s Ultranet corruption probe

CSG Services, Oracle named in Victoria’s Ultranet corruption probe

Investigation leads to allegations of corruption in Victoria’s Ultranet procurement process

Ultimately, IBAC claims that Operation Dunham exposed a range of alleged improper actions and behaviours by senior departmental staff, including Fraser, that effectively corrupted the tender process.

“These included the receipt of gifts and travel; improper communications during the tender process intended to influence the tender process; and a likely attempt to influence the tender evaluation outcome by ‘stacking’ an assessment team with like-minded colleagues,” the report said.

Additionally, IBAC said it found that decisions were made contrary to proper procurement process, in particular, the “unreasoned and inexplicable decision to give singular preference to CSG, despite serious concerns about its commercial credentials in the relevant area”.

“Of particular concern was the fact that these decisions were made in the face of strong expert advice to do otherwise,” the report stated.

Further, IBAC alleges that, after experiencing difficulties with the Ultranet project, Fraser set up the Learning Technologies Quality Assurance Project (LTQAP), which he described as “the little project”.

“In fact, Operation Dunham found evidence to suggest the 'little project' was a one million dollar sham,” the report said. “Payments were made to Alliance Recruitment from departmental funds to corruptly inject funds into CSG to ensure it had sufficient cash flow to properly deliver the Ultranet project.

“The process used to appoint Alliance Recruitment was in clear breach of departmental protocols and was intended to mask CSG’s involvement,” it said.

IBAC also claims that, during the course of Operation Dunham, it found evidence that some senior departmental officers allegedly used confidential information about CSG’s appointment as contractor on the Ultranet project, obtained as a result of their positions, to gain personal advantage through the purchase of CSG shares.

“Some did not declare their shares to the department at all or in a timely way, as they were obliged to do as senior departmental officers,” the report stated. “Nor were some fully truthful with the department and its investigators when questioned about their shareholdings.”

CSG denies any wrongdoing on its part in relation to the findings of the investigation and the procurement of services for the Ultranet project.

“These works commenced in excess of seven years ago. The Ultranet agreement was signed in June 2009," the company, which is publicly-listed on the Australian Securities Exchange (ASX), said in a statement. "Services under the consulting project were provided in 2011.

"After reviewing the IBAC report, CSG denies that it and its officers have done anything wrong. CSG responded to the adverse statements against it and CSG Services through the appropriate channels.

“CSG understands that shareholders and the broader community have particular expectations about the way in which CSG operates. In accordance with its code of conduct, in all its dealings, CSG and its officers will act in compliance with the law and the company continues to commit to continuous compliance training,” it said.

The company also pointed out that the business examined in the investigation, CSG Services, was owned by CSG until 2012, and is no longer associated with the publicly-listed entity.

Now that IBAC has released its report of the investigation, it is in the process of compiling a brief of evidence for advice by the Office of Public Prosecutions. It has not yet disclosed any further details about potential prosecutions arising from the investigation.

However, IBAC has since made a number of recommendations directed at addressing the vulnerabilities identified during the investigation.

“These recommendations are designed to strengthen the culture and systems not just within the Department but across the Victorian public sector to prevent corruption,” IBAC said.

IBAC has recommended that the Victorian Department of Education and Training review current arrangements governing how schools and other work areas pursue and respond to commercial opportunities; and strengthen internal procurement and governance arrangements for major projects.

The Department has advised it supports these recommendations, IBAC indicated.

Additionally, IBAC recommended the Victorian Public Sector Commission consider banning public sector employees receiving any gift, benefit or hospitality from a current or prospective supplier.

“IBAC has also recommended the Department of Treasury and Finance consider improvements to reviews of high value and/or high risk projects,” IBAC said.

Oracle had not responded to ARN's queries at the time of writing.

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Oraclecsgvictorian governmentVictoria

Show Comments