Two senior managers overseeing the $50 billion National Disability Insurance Scheme are on leave while the agency reviews findings from a Victorian integrity probe that found three senior public servants withheld or provided misleading information about COVID-19 business grants to ineligible applicants, which the watchdog estimated cost taxpayers almost $260 million, NDIA chief executive Graeme Head confirmed to Senate estimates on Thursday.
Head told Senate estimates that “neither officer is on duty” and that he was considering what action to take after the Independent Broad-based Anti-corruption Commission (IBAC) found three senior Victorian public servants withheld or provided misleading information about the payment of COVID-19 business grants to ineligible applicants. The two most senior of those three later secured management positions at the National Disability Insurance Agency (NDIA), which administers the scheme supporting 782,000 people and has been beset with fraud and waste.
Head acknowledged “legitimate community interest in this matter, particularly given the importance of integrity and public confidence in the National Disability Insurance Agency and the administration of the National Disability Insurance Scheme”. He said the agency was working through a process to examine everything relevant around the officers’ time at the agency, but would not identify them.
IBAC identified the two public servants by their positions, “associate secretary” and the “deputy secretary”, and this masthead also chose not to name them. The investigation found widespread rorting of the Victorian government’s Business Costs Assistance Program, intended to help businesses affected by pandemic lockdowns. Businesses had to be registered for GST to claim grants worth up to $97,200 each.
In November 2021, the department’s integrity services unit estimated almost $285 million had been paid to businesses that were ineligible but had claimed the grants by legally backdating their GST registration. IBAC found the deputy secretary directed that this information be deleted from a report brief intended for the then-minister, Martin Pakula, and the state auditor-general, after discussing it with the associate secretary, who also failed to disclose the suspected significant loss of public money to department secretary Simon Phemister.
IBAC called this “a clear failure to act in line with the high integrity standards expected of Victoria’s public officers”. The two public servants disputed the adverse findings. The deputy secretary told IBAC he was simply following instructions from his boss, the associate secretary. The associate secretary said she did not escalate the suspected grant fraud because she disputed the department’s integrity team’s analysis.
Liberal senator Anne Ruston asked whether the NDIA knew about the IBAC investigation when the pair were hired. Head noted that individuals subject to investigations were generally gagged from speaking about them, and said the timeline of the investigation was being worked through as part of the process.
Analysis
Why This Matters
- The NDIS, a scheme supporting hundreds of thousands of Australians, is already under scrutiny for fraud and waste; the involvement of senior managers linked to a major cover-up erodes public trust.
- The case raises questions about the integrity checks applied when state public servants move into federal roles managing large budgets.
- The outcome of Head's review may set a precedent for how federal agencies handle adverse findings against employees from state integrity bodies.
Background
The NDIA administers the National Disability Insurance Scheme, a $50 billion program that provides support to 782,000 people with disabilities. IBAC is Victoria's independent anti-corruption commission; its Operation Harmonia investigation examined the rorting of the state's Business Costs Assistance Program during the COVID-19 pandemic.
Key Perspectives
- NDIA chief executive Graeme Head: Acknowledged the community's concern and said the agency is taking all steps to consider the IBAC findings carefully, with both officers off duty while a process is under way. He said he could not identify them or comment further without compromising that process.
- The two officers (via their disputes with IBAC): The deputy secretary argued he was acting on instructions from his superior, the associate secretary. The associate secretary said she did not escalate because she questioned the integrity team's estimate of $285 million in ineligible payments.
What to Watch
- The NDIA's internal review and any disciplinary action Head may take against the two managers.
- Whether the agency adjusts its hiring practices to vet state integrity findings more thoroughly.
- Any further fallout from IBAC's Operation Harmonia, which could lead to additional referrals or prosecutions.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedTwo NDIS managers are on leave after IBAC’s COVID grant findings.Sydney Morning Herald - Latest News: “Two senior managers overseeing the $50 billion National Disability Insurance Scheme are on leave while the agency reviews damning findings made against them in a Victorian integrity investigation into COVID-19 business grant rorts.”
- SupportedHead said “neither officer is on duty”.Sydney Morning Herald - Latest News: ““Neither officer is on duty, and we’re going through a process to examine everything that’s relevant around the officers’ time in the agency.””
- SupportedHead acknowledged a “legitimate community interest in this matter”.Sydney Morning Herald - Latest News: ““I acknowledge that there is legitimate community interest in this matter, particularly given the importance of integrity and public confidence in the National Disability Insurance Agency and the administration of the National Disability Insurance Scheme,” he said.”
- SupportedIBAC estimated the grant payments to ineligible applicants cost taxpayers almost $260 million.Sydney Morning Herald - Latest News: “a report by IBAC released earlier this month found that three senior Victorian public servants withheld or provided misleading information about the payment of COVID-19 business grants to ineligible applicants, which the watchdog estimated cost taxpayers almost $260 million.”
- SupportedIBAC found three senior Victorian public servants withheld or provided misleading information about COVID-19 business grants paid to ineligible applicants.Sydney Morning Herald - Latest News: “a report by IBAC released earlier this month found that three senior Victorian public servants withheld or provided misleading information about the payment of COVID-19 business grants to ineligible applicants”
- SupportedThe two most senior of the three later secured management positions at the NDIA.Sydney Morning Herald - Latest News: “This masthead revealed on Wednesday that the two most senior of the three went on to secure management positions at the NDIA”
- SupportedThe NDIA administers a $50 billion scheme.Sydney Morning Herald - Latest News: “the NDIA, which administers a $50 billion scheme supporting 782,000 people”
- SupportedThe scheme supports 782,000 people.Sydney Morning Herald - Latest News: “the NDIA, which administers a $50 billion scheme supporting 782,000 people”
- SupportedThe grants were worth up to $97,200 each.Sydney Morning Herald - Latest News: “Businesses had to be registered for GST to claim the grants, worth up to $97,200 each.”
- SupportedIn November 2021, the department’s integrity services unit estimated almost $285 million had been paid to ineligible businesses that claimed grants by legally backdating GST registration.Sydney Morning Herald - Latest News: “in November 2021, the department’s integrity services unit estimated almost $285 million had been paid to businesses that were ineligible but had claimed the grants by legally backdating their GST registration.”
- SupportedIBAC found the deputy secretary directed that information about the ineligible payments be deleted from the report after discussing it with the associate secretary.Sydney Morning Herald - Latest News: “IBAC found the deputy secretary directed that the information be deleted from the report after discussing it with the associate secretary”
- SupportedIBAC called the conduct “a clear failure to act in line with the high integrity standards expected of Victoria’s public officers”.Sydney Morning Herald - Latest News: “IBAC found this was a “a clear failure to act in line with the high integrity standards expected of Victoria’s public officers”.”