Victorian corruption scandal: govt wants $7.5m returned

The Victorian Department of Education is trying to claw back $7.5 million tied up in technical support contracts awarded as part of an alleged favours-for-mates corruption scandal, an inquiry heard yesterday.

The IT support deals are part of an investigation by the Independent Broad-based Anti-corruption Commission (IBAC) into claims of nepotism and fraudulent dealing within Education's ranks, centring on allegations funds were transferred into so-called 'banker schools' to be spent away from government oversight.

The state's Education secretary Gill Callister fronted an IBAC hearing yesterday, describing an "unhealthy network" of internal staff who behaved in a "strikingly appalling" manner with procurement.

She said around $12.5 million wa still being held in the so-called banker schools, while around $7.5 million is tied up in tech support contracts, which the department is now attempting to retrieve.

The $7.5 million was paid to various private partners to pay for technology support for end user devices in schools, Callister said.

She said the department was in the process of retrieving the money except in instances where it had to honour contractual obligations.

"It is now clear the department suffered from serious structural problems," Callister said yesterday.

"The behaviour of some of these people with the level of responsibility they had is strikingly appalling."

IBAC counsel Ian Hill questioned whether the admin and finance software used in Victorian schools, the Oracle head office accounting package, and the Ariba procurement system were to blame for the alleged wrongdoing going undetected.

"One of the difficulties here is that no-one picked up the fact that there were multiple invoices from the same small organisation going and being paid by different schools," Hill said.

"Is that a fault within the computer system that the Education Department operates under, that it doesn’t seem that the material can be read easily?"

Callister said the systems were not currently equipped to pick up on these sorts on patterns, but said the department was looking at ways to address the issue.

"I understand that we are looking at ways of migrating data from CASES21 [admin and finance software] into Oracle so that we can do that," she told the hearing.

"And we’ve also got some new software in audit that can start to electronically ... from an audit point of view, look for these sorts of transactions and patterns."

She said the department could look at moving every school to the Oracle platform, but warned there would be a large cost involved.

During the hearing, Callister promised to introduce stricter rules for procurement, hospitality and school grants. She said executives would now be rotated through the department to "break down unhealthy networks", and called for greater powers to sack allegedly corrupt principals more quickly.

The public examinations wrapped up yesterday. IBAC is now expected to delve more deeply into the cancelled Ultranet project, which has been linked to allegedly dubious shareholdings by Education staff.

The commission will release a full report once its investigation is complete next year.