Peter Connelly Deputy Secretary, Organisational Performance and … · 2017. 5. 18. · Peter Connelly Deputy Secretary, Organisational Performance and Operations 10 November 2016

Organisational Response to Major Investigations Peter Connelly

Deputy Secretary, Organisational Performance and Operations 10 November 2016

Department of Justice

Our context Creating a single Department of Justice

• Department of Justice established after various machinery of government changes.

• Formerly separate agencies brought together.

• Back office systems being consolidated - 7 ERP systems.

• 16/17 Budget $6.8 bil • 14,000 FTE

Organisational Responses to Major Investigations 2

Attorney General’s

Corrective Services

Juvenile Justice

MPES

OLGR/ ILGA

Arts NSW

Justice corporate functions

2011 2015

Department of Justice 3 Organisational Responses to Major Investigations


Fatima Hammoud

Shadi Chacra (Saff Projects/Triton)

Anthony Andjic

Key characters

4 $1.3m

Hunter Courthouse

Gunnedah Courthouse

Tamworth Courthouse

Organisational Responses to Major Investigations

Fay Rouze a.k.a. Fayrouz

Hammoud/ Chacra


Operation “Yancey”

5

The Public Inquiry




6 Organisational Responses to Major Investigations



7

The Public Inquiry




8

The Public Inquiry



Time line Illustrative dates


2012 2014 2015 2013

Note: ICAC is yet to release the final report on Operation Yancey

Projects managed by Andjic (December 2012 – September 2013)

Andjic Resignation (9 October 2014)

Hammoud Resignation

(17 March 2014) Initial Public

Works Review (September 2013)

First ICAC Notification

(31 October 2013)

Second ICAC Notification

(25 March 2014)

ICAC Inquiry (June-July

2015)

Andjic Suspended (7 March 2014)

Yancey Steering Committee

(6 November 2014)

ICAC Activity

Suspension

Resignation

Improvement Action

Public Works and PwC Reviews (November 2014 –

May 2015)

Key

2016

Dawson Review (March 2015 – September 2015)


Operation “Yancey” Prior to the commencement of the Public Inquiry

External agency referrals • Referral to ICAC and liaison regarding scope of investigations. • Referral to NSW Police Force and Auditor-General of NSW. • Respond to ICAC’s requests for information.

Initial investigations and assessments • NSW Public Works engaged to conduct an initial review of the processes and

governance arrangements. • External investigator conducts preliminary investigation of allegations. • Concerns identified in relation to

• Breach of Departmental policy and procedures • Failure to maintain appropriate records • Failure to minimise risk profile for the Department.



Immediate tasks Internal taskforce to manage investigations and responses • Taskforce, chaired by the Secretary, established • Asset Management Services, Strategic HR, Office of the General Counsel,

and Organisational Performance and Operations Division. • Provide oversight management of allegations of corrupt conduct • Develop strategy for mitigating risk relating to fraud and unethical practices • Coordinated external investigations.

Initial tasks • Established a secure room in a restricted area • Preservation of evidence (copy drives and email accounts) • Secure all hard/ soft copy files • Data retention strategy • Defining the review population • Develop a risk profile matrix to inform further investigation and sampling • Review of files (sample basis)



How extensive was the problem? How do we know?


A = Known matters referred to ICAC

B = Known matters being internally investigated

D = No File, Known Officers (Known unknowns)

C = Other files assessed (sample based) (Potentially known)

E = No File, Officers unknown (Unknown unknowns)

Examine all projects between January 2011 – December 2012 (number ~ 430)


Assessing other projects NSW Public Works undertook a further assessment

Develop a sampling/verification approach to include: • Compliance with policy and procedures • Procurement selection process

• Tender Selection • Tendering Procedures • Delegations and approvals

• Extensions and variations • Completion of works (to specification) • Value of works undertaken • Matching with approvals – scope and expenditure • Compliance with contract terms • Value for money



Due diligence Forensic accountants

Fraud focussed data analysis/ risk profiling (via internal audit partner):

• Payment profiling by vendor / project

• Analytics eg payments within delegations, duplicate payments

• Data mining across population, eg, suppliers, contractors, ABN, GST details

• Review of prior audit and investigation reports



How did we respond to the challenges 1. Addressing the ICAC information requests/ inquiry

2. Developing Governance processes

3. Preparing a 20 Point plan • Ethical Behaviour

• Enterprise risk

• Fraud Control

• Financial and procurement delegations

• Consolidation of corporate functions

• Asset Management Service Review

4. Providing support to staff

5. Developing a communication strategy



Developing organisational resilience 20-Point Plan


Issue Actions

Department-wide Initiative

1. Fraud Control

Remediation Process

• A Department-wide Fraud Control Remediation Process was

approved January 2015.

• A Fraud Control Steering Group to oversee the Fraud Control

Remediation Process.

• A fraud risk questionnaire distributed to all Division heads, to assess

‘as is’ state of Fraud Control within the Department.

2. Fraud Control Policy • A ‘Secretary’s Directive’ on Fraud Control released.

• Re-issued the Fraud Control Policy reminding all staff of their

responsibilities under the Department of Justice Fraud Control

Policy (which was originally released in June 2013).




Issue Action

3. Behaving Ethically

• Implemented Behaving Ethically guidelines issued by PSC.

• A new code of conduct and relevant policies developed and

implemented

• Education strategy promote awareness of new and existing staff.

4. Enterprise Risk

Framework

• An Enterprise Risk Framework developed

• Senior Executives nominated as ‘risk champions’

• Enterprise risk champions developing risk mitigation plans for each

enterprise risk.

5. Delegations • Financial and Procurement Delegations reviewed

• Single, consolidated delegations instrument for whole department




Issue Actions

6. Procurement • Review to standardise procurement processes.

• Provision of training to staff on procurement processes.

7. Governance

Framework

• A framework for the Department developed.

8. Development of

consolidated corporate

service functions

• Restructure of DJ consolidated key corporate service functions.

• Consolidation and standardisation of corporate policies and systems

• Improve the control environment across the department.

9. Internal Audit and Risk

• Single Audit and Risk function established.

• Regular fraud risk reporting to Audit and Risk Committee and

Executive.




Issue Actions

10. Legislative Policy and Compliance

• Compliance with legislative and policy requirements part of the Internal Audit Program.

11. Single Enterprise Resource Planning System

• SAP as a service – is being rolled out • Reducing 7 ERP systems to a target state of 1 ERP. • Significantly improve the control environment.

12. ICT Infrastructure • ICT CORE program is establishing common platforms for key business systems eg email, electronic records management.

• Improve the control environment.

13. Enterprise-wide Business Analytics and Reporting System

• Enterprise-wide business analytics and reporting system to be integrated with the new SAP system.

• Management and Project reporting at Departmental and Divisional/branch level.

• Improve the control environment




Issue Actions

Asset Management Services Initiatives

14. Governance and

Structure

• Review governance and structure of Asset Management Branch.

• Recruitment action underway, consistent with Government Sector

Employment Act.

15. Project Governance

strengthened in AMS

• Project Governance oversight group involving relevant senior

executives to review all projects.


16. Delegations • Revised delegations relating to Asset Management instituted.

• Delegations removed from junior staff with accountability at an

executive level.





Issue Actions

17. Review of Capital Procurement Compliance

• A review of compliance with NSW Government Capital/Construction

Procurement requirements was undertaken

18. Processes and Systems

• Institute project and contract management processes compliant with

Construction Procurement/ PFAA requirements.


19. Review of Accounting Practices

• Review of financial records over the period 2011-14 to identify any

aberrant accounting practices.

20. Planning and Environment Compliance Review

• Review compliance with Planning and Environment legislation and

related requirements.


Operation “Yancey” After announcement of the Public Inquiry

Public Inquiry Public inquiry announced 12 June 2015 under section 31 of the Independent Commission Against Corruption Act 1988. Action • Briefing of legal representatives • Preparation of witness statements • Issue of media statements and management of media enquiries • Internal staff briefings, advice and assistance in relation to:

o What to do if summoned to the ICAC; o Access to legal representation; and o Access to the Employee Assistance Program.



Operation “Yancey” 7 Lessons 1. Tone from the top: Strong leadership to signify the identified issues were

being taken seriously. 2. Multi-faceted approach: Rapidly mobilising an integrated response –

addressing the immediate issues, undertaking due diligence, independent expert reviews, responding to investigations, supporting staff, legal advice.

3. Open book approach: Work openly with investigators and legal teams. 4. Maintaining business as usual: Instituting new expectations, processes

and systems while continuing to deliver services. 5. Creating a corruption resistant culture: Visibility to prevention and

detection of fraud, procurement processes and record keeping; staff ‘town halls’ to reinforce expectations and departmental Values

6. Investment in systems: Creating common policies, processes and systems (ERP, email, EDRMS).

7. Creating the future structure: Developing new structure and recruiting executive and staff positions. 23 Organisational Responses to Major Investigations

Organisational Response to Major Investigations� Our context Slide Number 3Key charactersOperation “Yancey”Operation “Yancey”Operation “Yancey”Operation “Yancey”Time line Operation “Yancey”Immediate tasksHow extensive was the problem?Assessing other projectsDue diligenceHow did we respond to the challengesDeveloping organisational resilienceDeveloping organisational resilienceDeveloping organisational resilienceDeveloping organisational resilienceDeveloping organisational resilienceDeveloping organisational resilienceOperation “Yancey”Operation “Yancey”

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Peter Connelly Deputy Secretary, Organisational Performance and … · 2017. 5. 18. · Peter Connelly Deputy Secretary, Organisational Performance and Operations 10 November 2016