DHS contractors face fraud probe

Denham Sadler
Senior Reporter

More than 50 tech subcontractors to the Department of Human Services are being investigated for fraud, with the Opposition saying this justifies the upcoming Senate inquiry into the Commonwealth’s digital transformation efforts.

Fairfax Media reported this morning that over 50 subcontractors completing ICT work for the DHS have been accused of submitting fake invoices, CVs and qualifications to gain contracts for taxpayer’s money.

A spokesperson for the department has confirmed that an investigation is underway, which will also be looking at a public servant.

“The DHS is conducting an internal investigation into allegations of potential fraudulent behaviour involving a small number of former contractors and an APS employee,” the spokesperson told InnovationAus.com in a statement.

“The department is being provided support and assistance by the Australian Federal Police.

“As this investigation is ongoing, it would not be appropriate to provide any further comment at this time

DHS is said to be currently considering whether to begin formal legal action against the tech subcontractors.

It comes just a week after digital transformation minister Angus Taylor announced a series of big changes to the government’s IT procurement process, with projects to be capped at $100 million.

The Opposition has jumped on the report of fraud, using it as justification for its calls for a Senate inquiry into the government’s digital transformation spending.

Shadow minister for the digital economy Ed Husic said the reports were extremely concerning.

“Just one week ago the Turnbull government admitted it needed to improve its ICT procurement process and made changes to the way it manages its contracts,” Mr Husic said.

“Now it is clear this is a bigger problem than first imagined – today’s revelations are further proof the Turnbull government has lost its grip on managing its ICT projects,” he said.

Labor successfully passed a motion two weeks ago for a Senate inquiry into the government’s ICT spending, focusing on the big increases of late and the series of recent tech debacles, including last year’s census and robo-debt.

Mr Husic hinted that the inquiry would now also investigate these fraud claims.

“[This] highlights that Labor was right to push for a Senate inquiry into the management of digital transformation projects under the Turnbull government’s watch,” he said.

“It’s hoped the Senate inquiry into the government’s failing digital transformation program can shed light on how such huge tech contractor fraud could have occurred,” he said.

A new report last week found that the government’s ICT spending has jumped to nearly $10 billion across its agencies, up from $5.9 billion in 2012-13. Mr Taylor says the increased spending was to make up for an under-investment in technology under the previous Labor government.

He said the reforms to procurement aimed to redirect $650 million of IT spending to smaller local companies.

“These are exciting changes that will throw open the door for SMEs and allow government agencies to bring in new and innovative services. If we are to reward the entrepreneurial spirit, a new procurement culture is necessary,” Mr Taylor said.

The Senate inquiry will investigate whether programs are able to digitally deliver services, the whole of government digital transformation strategies, a review of procurement and the adequacy of internal public service delivery capability.

“With so much money being spent on digital transformation it is vital to be transparent and get value for money, but this government has only delivered tech wrecks and criminal investigations,” Mr Husic said.


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