Opposition accuses Labor of interfering in independent audit of IBAC

The Labor chair of a parliamentary subcommittee told independent auditors reviewing Victoria’s integrity agencies to remove any references to the Andrews government underfunding or under-resourcing the state’s anti-corruption body in their final report.

The opposition has accused government MPs of gagging the Independent Broad-based Anti-corruption Commission and interfering with the work of independent auditors from Canberra-based Callida Consulting.

Dustin Halse “instructed” independent auditors to delete references to the Andrews government underfunding IBAC.

In an email to Callida Consulting in early October, the chair of the integrity and oversight subcommittee, Dustin Halse, “instructed” the firm to delete references to funding in its recommendations, as well as references to the government underfunding IBAC.

He said the independent performance auditor must comply with directions given by the committee under the IBAC Act, and listed its “red flag feedback”, which included deleting the sentences:

• “It was noted that IBAC did not receive any increase to its recurrent funding throughout the audit period.”
• “This has been exacerbated by the short-term nature of some of IBAC’s funding.”
• “... due to a lack of resources and an increasing workload.”

Callida Consulting appears to have abided by Halse’s instructions because the sentences do not appear in the final report, which was tabled in parliament on Monday.

The email was published in a minority report by Liberal members of the parliamentary committee Kim Wells and Brad Rowswell, who accused Halse of “interfering” in the independent process.

“This level of assistance, which was maintained during the course of the performance audit, legitimately calls into question the independence of the audit,” the pair said.

The Age’s Victoria’s Agenda project has established that integrity in politics is at the top of voters’ concerns in the state election. When this masthead asked readers what issue they wanted more coverage of in the campaign, integrity in politics and governance came first, for all age groups.

One voter from regional Victoria, Robyn Flagan, told The Age that while health, education and climate were priorities, “above all [it is] integrity ... People saying what they mean.” Another reader said: “Lobbyist access and advertising rules need tighter regulation, and IBAC funding is a scandal. [freedom of information], the ombudsman, etc, need more funding and clout, as does the auditor-general.”

Shadow attorney-general Michael O’Brien accused Labor MPs of gagging IBAC and independent auditors. Credit: Justin McManus

Two years ago, the integrity and oversight committee, made up of four Labor MPs, two Liberal MPs and one crossbench MP, commissioned an inaugural performance audit of IBAC and the Victorian Inspectorate, which monitors IBAC, to determine whether the agencies were achieving their objectives effectively, economically and efficiently.

The auditor said that while IBAC’s recurrent base funding had increased in this year’s budget for the first time since it was established a decade ago, the commission was struggling to recruit and retain enough staff, hampering its ability to conduct more investigations.

“IBAC vacancies have existed within the investigations branch for several years since a fourth investigation team was established in November 2017,” the audit report says. “While [the fourth team] helped drive a 26 per cent increase in the number of allegations investigated by IBAC in 2018-19 ... underspends in the investigations branch have totalled $1.1 million (13 per cent), $1.6 million (17 per cent) and $1.4 million (15 per cent) over the past three financial years.”

The parliamentary committee expressed frustration with the integrity agencies, which refused to hand over key documents to the auditors, citing secrecy provisions.

The committee received legal advice that the IBAC Act did not prohibit the agency from releasing information to independent auditors.

Despite that advice, Callida Consulting did not receive all the documents it asked for and, therefore, did not produce an auditor’s opinion, which usually accompanies reports of this nature.

IBAC declined to comment on Monday, but in an email to Callida Consulting last week the agency’s chief executive, Marlo Baragwanath, said it agreed with the auditors that the IBAC legislation should be amended to “unequivocally empower the auditor to obtain and utilise operational and related information to the extent necessary to conduct the audits”.

Shadow attorney-general Michael O’Brien said Labor MPs had again been “exposed as running a protection racket for Daniel Andrews and his Labor government which has been embroiled in corruption inquiries”, referencing the former chair of the integrity committee, Harriet Shing, cutting off the live broadcast of a hearing after IBAC Commissioner Robert Redlich was asked a question about the premier.

“Labor MPs have been caught out trying to gag IBAC and its auditor from disclosing the effect of Labor’s budget cuts on integrity agencies,” O’Brien added. “No Victorian who cares about cleaning up corruption in this state can afford another four years of an Andrews Labor government.”

A Victorian government spokeswoman said: “The report is a matter for the integrity and oversight committee. The committee is independent from the government.”

Callida Consulting and Halse were contacted for comment.

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