The NSW Independent Commission Against Corruption (ICAC) has found a former Department of Finance, Services and Innovation (DFSI) project manager corrupt after uncovering a $500,000 scheme.
In what ICAC called an "elaborate" scheme, former ICT project manager Steven Prestage arranged for a company controlled by him to be paid $569,800 by the DFSI for system development work performed by a number of ICT contractors.
In order for that to happen, the project manager 'hijacked' the name of a friend's company to deceive the department.
Prestage recommended the DFSI worked with Petite Software Systems, a business registered with the Australian Securities and Investments Commission in November 2013 for the purpose of its director's, Michael Turner, superannuation.
However the business never operated.
ICAC alleges that Prestage had his mother-in-law register a business with a similar name, Petite Solutions, on his behalf.
According to the report, Prestage also had his mother-in-law to open a bank account in the name of the company with the Commonwealth Bank, into which DFSI made payments.
From 15 June to 19 October 2016, Petite Solutions received $569,800 from DFSI. According to ICAC investigations, after payments from this account to a number of ICT contractors, the balance of $523,450 was transferred from Petite Solutions’ account into other accounts controlled by Prestage.
"The money was then used to make mortgage payments and to meet other expenses," stated the report.
During the same period, Prestage also received $101,980 for his services as project manager.
"The ICAC is of the opinion that the advice of the Director of Public Prosecutions should be obtained with respect to the prosecution of Mr Prestage for various offences," it said in a statement.
"The report notes that Mr Prestage used the names Petite Software Systems, Petite Solutions, and “Petite” interchangeably in his dealings with DFSI and the ICT contractors.
“This created uncertainty as to the identity of the supplier of ICT contractors to the Clarity Project and the identity of the party receiving payments from DFSI," stated the report.
"The Commission is satisfied that this consequence was intended by Mr Prestage. It facilitated his dishonest scheme."
The investigations started after the DFSI secretary made a report to the ICAC on 20 February 2017.
The report stated that it had been brought to the secretary’s attention that Prestage may have misused his position as a DFSI contractor in his dealings with a supplier, Petite Software Systems, including that he may have had a conflict of interest that was not disclosed when recommending Petite Software Systems for a substantial project, among other concerns.
ICAC has also made 15 recommendations to the DFSI, including that DFSI develops a framework to ensure that the employment screening checks conducted on contractors are commensurate with the level of risk posed by their respective engagements.
It also recommended that DFSI provides guidance to its staff who hold a financial delegation about red flags on quotations that indicate that a supplier may not be genuine. DFSI has indicated that it is implementing, or intends to implement, the recommendations.