Nepotism, cronyism and fraud: NACC reveals top corruption patterns in Treasury

The National Anti Corruption Commission (NACC)’s 2024 Commonwealth Integrity Survey for the Department of Treasury, released last Friday (28 November) under FOI, found that Treasury employees largely had faith in their agency’s integrity but gaps remained.

Twenty-eight respondents (4 per cent) reported having specific knowledge of corrupt conduct in the Treasury. Of these incidents, nepotism was the most commonly-reported descriptor of corruption (48 per cent), followed by cronyism (41 per cent), fraud (33 per cent) and undisclosed conflicts of interest (30 per cent).

Of the 28 fraud reports, 11 per cent reported the corrupt conduct was ongoing, 46 per cent occurred in the last 12 months and 36 per cent happened over a year ago. After encountering corruption, 27 per cent of respondents said they spoke to fellow employees about their concerns, 15 per cent spoke to their manager and 15 per cent made a formal report.

Over a third (38 per cent) reported that they took no action once becoming aware of the corrupt conduct. Almost half of those (40 per cent) were concerned that they would be subject to adverse action if they made a report, while 30 per cent believed they did not have adequate proof and 20 per cent didn’t know what action to take.

Most Treasury employees said they would react supportively (49 per cent) or very supportively (20 per cent) to a colleague who reported corrupt conduct. The top reasons for not reporting corrupt conduct included insufficient proof (72 per cent), worries it could affect their career (42 per cent) and fear of retaliation (35 per cent).

When presented with five scenarios and asked to evaluate whether conduct was corrupt or not, 83 per cent of respondents gave the ‘best’ answer to at least three of the scenarios. However, only 18 per cent of respondents gave the ‘best’ answer to all five.

Employees performed the worst when presented with a scenario in which a worker regularly accessed records they had no reason to access, which contained sensitive personal information.

Just over half (53 per cent) of Treasury respondents correctly identified this as corrupt conduct, while 45 per cent believed it was not good practice, but not corrupt.

Another scenario outlined a case where an employee was part of a procurement process involving their friend’s business, but didn’t declare it. The employee’s friend won the contract and went on to provide good-quality services to the Treasury.

In this case, 59 per cent of respondents correctly identified the conduct as corrupt, while 36 per cent believed it was not good practice, but not corrupt.

Based on employee answers to component questions, the NACC found that the Treasury scored 74 per cent for their organisational controls, 90 per cent for their employee comprehension of corruption and 72 per cent for their likelihood to report corruption.

On the whole, the NACC concluded that Treasury employees had faith in the integrity of the agency, but there was room for improvement in closing opportunities for corruption and empowering employees to report incidents.