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Corruption inquiry finds taxpayers rorted over training subsidies

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An ICAC investigation has found a South Australian government contractor engaged in years of “subsidy manipulation” costing hundreds of thousands of dollars.

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In a report tabled in parliament on Thursday, investigators for the Independent Commissioner Against Corruption determined an unnamed registered training organisation (RTO) engaged by the Department for Innovation and Skills had been involved in the “manipulation of subsidies … for many years, undetected by the department”.

The Department for Innovation and Skills was subsidising the RTO to provide vocational education and training to students.

The training organisation was then “falsely reporting that students had achieved full competency for courses before those students had completed their courses” in order to “trigger release of subsidy payments”.

“For those students who ultimately failed or withdrew from their course (not an insignificant number) the subsidies never became payable,” the report states.

“This benefit was estimated to amount to hundreds of thousands of dollars over several years.”

The investigation also identified a “reticence amongst senior officers at the Department to report the matter to the Office for Public Integrity” and said the manipulation went undetected due to a “complex system of reporting codes” and “unwieldy administrative arrangements poorly designed to verify the truth of facts underpinning subsidy claims”.

No criminal charges were pursued, and the report emphasised there was “no evidence that any public officer of the Department had any involvement in the subsidy manipulation”.

ICAC completed the investigation into the unnamed organisation in April 2021.

Independent Commissioner Against Corruption Ann Vanstone said the Department has since undertaken reforms to improve its compliance and monitoring processes with government contractors.

“I was encouraged that the reforms appeared to intervene in the three main areas where the Commission considered improvement was needed,” she said.

However, Vanstone also wrote in her foreword that the ICAC’s ability to conduct future investigations on similar matters is limited by laws that sailed through state parliament last year curtailing her powers.

“Conduct such as this might not be investigated by the Commission in future because, whereas the contractor could previously have been charged with deception, that is no longer a ‘corruption offence’ as defined,” she said.

“This creates an imperative for public authorities to take steps to ensure they have adequate controls in place to prevent dishonest conduct on the part of contractors.

“To that end I have determined it is in the public interest that I publish a report on the nature of this recent investigation, to highlight corruption opportunities that were identified and lessons learned.”

Vanstone issued a similar warning about the effect of the new laws in a damning report about the driver licensing industry tabled last month.

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