WA Govt exposes dodgy IT deals

news An investigation by Western Australia’s Corruption and Crime Commission investigation has found that more than $1.2 million of IT software was purchased by a former council CEO without going to tender or getting quotes — over a period in which they received gifts and benefits from the supplier.

In a report tabled in State Parliament in December, the Commission urged the Government to amend the Local Government Act to significantly tighten rules surrounding
the receipt of gifts by public officers. The receipt of gifts is permitted under current WA legislation. It appears this story was first reported in the technology press by iTNews.

“A legislative regime that endorses the receipt of gifts and contributions to travel in circumstances where a public officer is engaged in commercial dealings with the gift-giver requires rigorous review,” the Commission said in a statement. “The receipt of gifts such as corporate box football tickets by public officers while conducting public business should be prohibited rather than be authorised by the applicable legislation.”

The report recommends that the Department of Local Government consider prosecuting an executive who was CEO of Kalamunda Shire from 2008 until his dismissal in 2012, and CEO of Augusta-Margaret River Shire for more than four years before that – for failing to declare all the gifts they received in their annual return, as required by the Local Government Act. The Commission also made three Opinions of Misconduct against the executive for breaching the trust placed in them as a public officer, including the obligation on public officers to act impartially, without bias or favour.

The investigation tracked the procurement of IT software for both Kalamunda and
Augusta-Margaret River Shires from CA Technology Pty Ltd, trading as CAMMS.

It found the Augusta-Margaret River Shire spent $230,947 in one year buying IT software
(including licensing fees, training and implementation) from CAMMS, despite the Council only approving a single purchase for $60,000. Each contract with CAMMS was signed by the executive on behalf of the Shire. The procurement did not go to tender and no other companies were asked to quote.

At Kalamunda Shire the expenditure on CAMMS products continued with the Council
spending just over $1 million from late 2008 to September 2012 despite only a single Council approval being sought for around $200,000. All of the contracts were signed by the executive on behalf of Kalamunda Shire. The procurement again did not go to tender and no other companies were asked to quote.

From 2006 to 2012 the executive received gifts from CAMMS including interstate and overseas travel, tickets to football and cricket matches in Australia and overseas, including cricket at Lords, and payment for golf played by the executive in Dubai and the UK.

As well as examining the executive’s activities, the Commission’s investigation and report is intended to assist all government entities to identify critical risks and issues that can arise with the purchase of IT software. The WA public sector spends about $4 billion a year on goods and services and about $800 million of that – or one dollar in every five – is spent on IT goods and services.

opinion/analysis
I recently wrote an extensive article on Delimiter 2.0 (paywalled) about the fact that corruption is on the rise in Australia’s technology sector. The article, published in late October, stated:

“It’s something which nobody wants to talk about, but which everybody knows is going on. A number of very high profile cases have starkly demonstrated over the past several years that dishonest and unethical behaviour in some cases extending as far as corrupt practice is on the rise in Australia’s technology sector.

… what we’re seeing here is that the IT industry has the motivation to engage in unethical practices in major IT contracts, because of the vast sums of money involved. It has the opportunity, because the controls around such contracts weaken due to the inherently innovative nature of the projects. And often there are a small number of individuals or firms with specialist knowledge that can actually do the work. Couple this with the historically poor project governance we’ve so often seen in the IT industry in Australia, particularly in the public sector, and bingo: You’ve got unethical practices potentially leading towards out and out corruption.”