Victorian education IT procurement practices centralised in wake of Ultranet

A conflict of interest and an IT procurement register will be introduced by the Victorian Department of Education following the failed and corrupted Ultranet project.

Victoria's Independent Broad-based Anti-corruption Commission (IBAC) has published the response of the Department of Education to Operation Dunham, which IBAC found was corrupted by improper influence over its tender process.

Released early last year, IBAC's report said it had found "process corruption, improper diversion of funds, conflict of interest, and mismanagement at senior levels".

This included receiving hospitality and travel inappropriately; improper communications intended to influence the tender process; a likely attempt to stack an evaluation panel with "like-minded colleagues" to influence the tender outcome; and decisions "contrary to proper procurement process, in particular singular preference for a particular bidder, despite serious concerns about its credentials".

Announced in 2006, Ultranet was slated to be a AU$60 million network for connecting students, teachers, and parents with learning materials and student information. But it rarely worked, and the cost was eventually pinned at somewhere between AU$127 million and AU$240 million.

In its response, the department said it had already made progress on the issues raised by IBAC.

"In December 2017, the department launched the Corporate Procurement Portal, a single stop for employees to access information, resources, and support," it said.

"The new operating model incorporates a move from a devolved procurement model to a centre-led model where an expanded team of procurement professionals will lead end-to-end strategic procurement activities on behalf of the department."

All purchases over AU$150,000 now need to be "discussed" with the departmental procurement division, and approved by the chief procurement officer, the procurement and probity committee, or a procurement manager.

For IT purchases made by schools, a register will be established of suppliers that have passed a privacy and security assessment.

By June, the department said it will roll out a new conflict of interest register to all staff, and extend its current gifts, benefits, and hospitality register from corporate staff to include school staff as well.

The department also said it had created intellectual property guidelines, and will be training corporate and school staff by the end of next year.

"Creation and communication of specific guidelines will make it clearer to staff that products they create during their employment are the intellectual property of the department," it said. "Central oversight of employees pursuing commercial opportunities unrelated to their employment which create a conflict of interest will also be improved through the new Conflict of Interest Register.

"Once completed, these actions will provide a transparent and consistent approach to the management of commercial opportunities arising through employment with the department."

Operation Dunham had focused on Darrell Fraser, then principal of Waverley Secondary College.

"This investigation found that from a position of power as a senior executive responsible for the allocation of significant funds, Mr Fraser was instrumental in manipulating procurement processes to ensure the Ultranet contract was awarded to the CSG/Oracle consortium -- companies with whom he had a long-standing relationship," IBAC wrote.

"So remarkable was this behaviour that one witness in evidence remarked that Mr Fraser's 'blatant and visceral' disregard for his advice meant: 'I couldn't arrive at an explanation other than corruption that made all the things hang together'."

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