Report reveals ICAC’s big funding, independence, transparency problem

Funding arrangements for NSW integrity agencies threaten their independence and lack significant transparency, report finds.

Disgraced former MP Daryl Maguire, left, is currently at the centre of an ICAC investigation which has embroiled NSW Premier Gladys Berejiklian.

A report into the funding arrangements of the ICAC and other integrity agencies in NSW has identified deficiencies with how they are financed by the government, concluding that the current arrangements pose threats to their independence and lack significant transparency.

The NSW Auditor-General’s report, released on Tuesday, found that the mechanism for providing funding to the agencies — the Independent Commission Against Corruption, the NSW Ombudsman, the NSW Law Enforcement Conduct Commission and the NSW Electoral Commission — needed adjustment in order to maintain their ongoing integrity.

Currently, the funding for these bodies is determined by Cabinet, NSW Treasury and the Department of Premier and Cabinet. It is then administered by the Minister who is responsible to the parliament.

The report found that this arrangement was suitable for most government departments and agencies, but for the ICAC and others it stood to present threats to their independence.

“The role of the integrity agencies includes providing independent scrutiny of the Executive

Government,” it said.

“Work done by the integrity agencies can potentially have a negative impact on the NSW Government, or individual ministers or senior public servants. As a result, there is a risk that the previous or planned work of the integrity agencies could influence the decisions made about their funding.”

The report further noted that these agencies needed to apply to DPC in writing when they required further funding during the year, which posed additional problems, and the decisions for which were provided with “little transparency to parliament”.

“This creates a potential threat to their independence,” it said. “It is possible that DPC could be the subject of an investigation conducted by an integrity agency.”

Funding arrangements for the ICAC have been raised as a matter of concern in recent years, however they have taken on new urgency over the past week because of ongoing public hearings into the conduct of former Wagga Wagga MP Daryl Maguire.

The report noted that comparable jurisdictions give parliamentary committees a more direct role in the funding for integrity agencies, providing a “clearer distinction” between integrity agencies and other government departments.

It recommended that the government implement a funding model that “addresses potential threats to their independence while ensuring accountability”.