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Spending Public Money: An Investigation into How Certain Government Grants and Contracts Were Awarded to a Commercial Company

NCJ Number
Date Published
November 2002
56 pages
This document discusses an investigation on how certain Australian Government grants and contracts were awarded to a commercial company.
In May 2002, concerns were raised of favoritism in the awarding of contracts and grants to a Brisbane-based commercial company, Cutting Edge. The company was said to have too close a relationship with the Queensland branch of the Australian Labor Party (ALP) and an officer in the Department of State Development. A thorough Crime and Misconduct Commission (CMC) investigation found no evidence of official misconduct. The investigation did reveal evidence of noncompliance with State Government Purchasing Policies on the part of the Corporate Communications Unit of the Department of State Development. This noncompliance may have given rise to the perception of favoritism towards Cutting Edge even though it did not amount to official misconduct and was not restricted to dealings with Cutting Edge. The CMC, which has a statutory function to help prevent misconduct, has made five procedural recommendations designed to prevent a recurrence of the events that led to these complaints. The first recommendation was that the Department of State Development should conduct a probity assessment of some or all of the directors and office holders of companies seeking grants (or an individual if the applicant is not a company). The second recommendation is that procedures be introduced to enable officers administering a grant scheme to make a decision with knowledge of the nature and extent of other grants recently received by the applicant. The third recommendation is that the department implement appropriate measures to ensure that staff are aware of, and comply with, departmental purchasing policy requirements. The fourth recommendation is that the department implement appropriate risk-management processes so as to enable it to identify any future instances of noncompliance with the requirements of its purchasing policies. The fifth recommendation is that, after a 12-month period, the department review internal compliance with purchasing policy requirements to ensure that effective remedial action has been taken. 1 footnote