The short version
- Senior Victorian officials hid the extent of financial losses from pandemic support grants, with suspected errors reaching up to $285 million.
- The Independent Broad-based Anti-corruption Commission determined that misleading information was created and disseminated over an extended period rather than resulting from simple oversight.
- Whistleblowers triggered the investigation, which found that draft reports were altered to remove details about suspected losses before being presented to ministers and auditors.
A major integrity watchdog in Australia has concluded that senior public servants in the state of Victoria deliberately concealed the magnitude of financial losses stemming from flawed coronavirus support payments. The Independent Broad-based Anti-corruption Commission (IBAC) released a special report titled Operation Harmonia, which details how officials within the former Department of Jobs, Precincts and Regions covered up the extent of improper grants given to ineligible businesses during the early months of the pandemic.
The investigation determined that the government spent an estimated $257 million on support grants to approximately 9,000 businesses that did not meet eligibility criteria. As the true scale of these expenditures became apparent, suspected losses were calculated to be as high as $285 million. Rather than informing their superiors of this significant financial discrepancy, senior officers chose to withhold critical information, according to the commission’s findings.
The watchdog emphasized that these actions were not isolated incidents or accidental oversights. The report states that decisions were made to suppress data regarding the loss magnitude and that misleading information was subsequently generated and distributed over a prolonged period. This systematic concealment involved altering draft reports intended for high-level review, ensuring that the full picture of the department’s failures remained hidden from political leadership and oversight bodies.
By mid-2021, the department was aware of potential issues related to its use of goods and services tax data as a metric for determining business eligibility. Despite this knowledge, the associate secretary and deputy secretary opted to keep the severity of the situation from their managers. The deputy secretary specifically directed that all information concerning the suspected losses be removed from a draft report prepared for then-Minister for Industry Support and Recovery Martin Pakula and the Victorian Auditor General’s Office.
Further complications arose in 2022 when the auditor general initiated an audit of the grants program. At that time, the deputy secretary prepared a briefing for then-Minister Ben Carroll that contained false and misleading assertions. The document claimed that Minister Pakula had been fully aware of and had approved the department’s approach to assessing grants, and it asserted that no payments had been made in error. The commission found these claims to be disingenuous, noting that the assertion regarding Minister Pakula’s approval was not supported by the evidence.
The investigation did not make adverse findings against Ben Carroll, who currently serves as the Victorian premier. However, the report highlights serious failures by senior public officers within the departmental structure. IBAC Commissioner Victoria Elliott stated that the conduct exposed by the investigation fell significantly short of the expectations placed on senior public officials. She emphasized that informing the public about these findings is crucial for promoting transparency and accountability within the state’s public sector.
The probe was initiated after whistleblowers brought allegations of corrupt conduct within the department to the attention of the commission. The department responsible for the grants has since been replaced by the Department of Jobs, Skills, Industry and Regions in 2023. Commissioner Elliott publicly applauded the whistleblowers who came forward during Operation Harmonia, describing their bravery as critical to exposing the misconduct. She noted that these disclosures allow Victoria’s public sector to apply lessons learned to improve organizational integrity.
The release of this report marks a significant moment for accountability in Australian state governance. It underscores the importance of internal checks and balances within government departments managing large-scale financial programs. While the immediate political figures involved have not faced adverse findings, the structural failures identified by IBAC suggest a need for broader reforms to prevent similar concealment of financial irregularities in future crisis response efforts.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗Senior Victorian public servants hid loss of up to $285m from Covid grants given to ineligible businesses
