WORKING WITH INTEGRITY - THE DEPARTMENT OF EDUCATION AND TRAINING'S SECOND REPORT TO THE INDEPENDENT BROAD-BASED ANTI-CORRUPTION COMMISSION - APO
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WORKING WITH INTEGRITY THE DEPARTMENT OF EDUCATION AND TRAINING’S SECOND REPORT TO THE INDEPENDENT BROAD-BASED ANTI-CORRUPTION COMMISSION
Melbourne September 2017 ©State of Victoria (Department of Education and Training) 2017 The copyright in this document is owned by the State of Victoria (Department of Education and Training), or in the case of some materials, by third parties (third party materials). No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968, the National Education Access Licence for Schools (NEALS) (see below) or with permission. An educational institution situated in Australia which is not conducted for profit, or a body responsible for administering such an institution may copy and communicate the materials, other than third party materials, for the educational purposes of the institution. Authorised by the Department of Education and Training, 2 Treasury Place, East Melbourne, Victoria, 3002 2
CONTENTS
Secretary’s foreword............................................................................................................... 4
1. Overview ................................................................................................................................. 5
1.1 IBAC’s investigations and findings....................................................................... 6
1.2 A comprehensive response to IBAC findings.................................................7
2. A culture of integrity underpins everything we do........................................ 10
2.1 The Values.............................................................................................................................11
2.2 Setting the tone from the top — ethical leadership............................ 14
2.3 Supporting a culture of integrity in our workplaces............................ 16
3. Smart systems and controls to oversee and guide our actions.............21
3.1 Corporate governance............................................................................................... 22
3.2 Risk management........................................................................................................24
3.3 Finance and funding changes.............................................................................26
3.4 Policies for purchasing or receiving goods and services.................28
3.5 Integrity framework....................................................................................................32
3.6 Compliance.......................................................................................................................32
3.7 Complaints management..................................................................................... 33
3.8 Policies and processes to support people and performance..... 33
4. Independent and robust auditing: the third line............................................38
4.1 Audit and Risk Committee..................................................................................... 39
4.2 Internal Audit Plan......................................................................................................40
4.3 School audit.....................................................................................................................42
5. Future work and next steps...................................................................................... 43
5.1 Final Dunham report in March 2018................................................................44
Appendix A: IBAC recommendations and Department response............... 45
WORKING WITH INTEGRITY | 3SECRETARY’S FOREWORD
Being an integrity leader doesn’t just mean an
absence of corruption. It means that behaving
with integrity is part of the way we do things in the
Department.
The Integrity Reform Program has entered a
new phase since my last report. Following our
immediate response to the hearings, we are now
focused on embedding integrity in our business as
usual processes and practices. We are continuing
to foster an ethical culture and encourage ethical
behaviours. For example, we have an integrity
I am pleased to provide the Independent Broad- moment as a standing agenda item at Executive
based Anti-corruption Commission (IBAC) with Board and Education State Board meetings.
this report on the Department of Education and Executives rotate in bringing a relevant issue for
Training’s Integrity Reform Program. discussion which has deepened our understanding
The achievements described here are a testament of these issues greatly. Integrity moments are also
to the determination with which the Department included in other committee meetings, leadership
has responded to the findings in IBAC’s Operation and staff forums across the Department, ensuring
Ord and Operation Dunham. that integrity is part of core business.
Integrity reform is essential to building and Victoria’s public education system is focused on
sustaining trust in the Department and its achieving excellence in outcomes for our students,
stewardship of public education. building a world-class education system and –
through addressing equity – creating opportunity
Our Integrity Reform Program strengthens our for every Victorian. This cannot be achieved
‘three lines of defence’ for risk management. without professional and empowered staff who
It is transforming our culture, strengthening our consistently work with integrity.
systems and controls, and ensuring independent
and robust auditing. As the Department of Education and Training we
are ideally positioned to model and teach ethical
We are proud of the significant steps we have behaviour and leadership as part of delivering the
taken since the Operation Ord and Dunham best possible public education for our community.
hearings. Our expectations about ethical conduct
are not only clear, they are supported, encouraged The Department’s commitment to integrity is
and enforced with robust systems, policies ongoing. It is something that will continue to
and processes. be talked about, focused on and championed
well beyond the completion of the Integrity
Our workplaces are already benefitting. We are in Reform Program.
a very different and much more optimistic place
than we were two years ago. I look forward to providing you with our final
report, on Operation Dunham, in March 2018.
Staff optimism is reflected in our 2017 People
Matter Survey results, which reflect a corporate
workforce that understands and acts according
to Public Sector Values. Respondents are now
Gill Callister
confident about raising concerns and increasingly
Secretary
see their leaders modelling ethical behaviours.
Department of Education and Training
Through the Integrity Reform Program, the
Department has not only addressed IBAC’s
recommendations, it is seizing the opportunity
to be a leader on issues of integrity in the
public sector.
4OVERVIEW 1
1. OVERVIEW
1.1 IBAC’s investigations and findings But it was ‘the collective failure of the Department’s
three lines of defence that ultimately allowed the
In Operation Ord and Operation Dunham, IBAC conduct under investigation to continue unabated’.
identified systemic failings that were exploited by
the actions of a few individuals.
1.1.1 IBAC’s recommendations
In Operation Ord, IBAC’s investigation focused on
The Department accepted IBAC’s
allegations that senior officials misappropriated
recommendations in both special reports for
funds from the Department’s budget, through false
Operation Ord and Operation Dunham.
and inflated invoicing, and arranging payment
of inappropriate expenses such as excessive An index showing the Department’s specific
hospitality, travel and personal items. These actions in response to each of IBAC’s
improper actions and behaviours were possible recommendations is provided at Appendix A.
because of inadequate systems and controls and a
culture that excused or ignored breaches of probity
IBAC’s Department
and process. recommendations actions
As with Operation Ord, Operation Dunham detailed Understanding of public First line
a prevailing culture of non-compliance among sector values, code of
conduct and DET policies
some of the most senior Department officers,
which contributed to misconduct, and hindered
A culture of integrity
opportunities to expose and address misconduct. Leadership to set ‘tone underpins everything
Operation Dunham exposed improper action from the top’ we do
and behaviour by senior staff that corrupted the
procurement process for a major IT project, the
Ultranet. These included the receipt of gifts and Whistleblower and
travel; improper communications intended to complaints management
influence the tender process; and a likely attempt
to influence the tender evaluation outcome by
‘stacking’ an assessment team with like-minded Financial management,
procurement and
Second line
colleagues.
compliance
The main findings of the two investigations were
that the Department had: School governance and
• a culture of non-compliance, bullying and financial management
entitlement arrangements
Smart systems and
• a lack of accountability, and lack of a culture of controls to oversee
Employment policies and guide our
integrity in senior leadership
and practices, including
actions
• inadequate controls around procurement exclusion and disciplinary
• inadequate governance of risk and processes
major projects
• poor controls for financial management, in the
Commercial opportunities
Department and in schools
• incompatible financial systems
• inadequate auditing.
Major project governance
In its summary of investigation and outcomes
for Operation Dunham, IBAC reported that Third line
the ‘willingness of some senior leaders in the
Department to deceive’ had caused the waste of Audit and risk Independent and
public funds. management robust assurance
61.2 A comprehensive response to 1.2.1 Integrity Reform Program and the ‘three
lines of defence’
IBAC findings
The Integrity Reform Program (IRP) is the
The Secretary’s first report to IBAC detailed the
Department’s response to IBAC findings. It goes
initial, profound changes: this report demonstrates
well beyond preventing corruption to embed a
their effectiveness.
healthy, high-performing and ethical culture in the
It also details the second phase of reforms that Department’s corporate workplaces and schools.
embed integrity in the Department’s business-
The IRP strengthens the three lines of defence.
as-usual processes and practices, as well as
its culture. The first line of defence is staff, their environment,
systems and culture. In other words, ‘functions
The Department has now acquitted all Operation that own and manage risk’. The second line
Ord recommendations. A final report on Operation oversees and supports the first line to manage
Dunham will be made in March 2018. risk. The third line is auditing: independent
It is important to stress that integrity reforms assurance of risk management.
will be ongoing. Maintaining, measuring and Following the three lines of defence model, the IRP
enhancing integrity is cemented as part of the has taken an integrated approach. Reforms to
Department’s regular work, beyond the final each line of defence are mutually reinforcing and
report to IBAC in 2018. provide grounds for confidence in their success.
Success for each line of defence means that:
First line Functions that own and manage risks
• Leaders follow correct procedures and act with integrity
• People feel supported to act with integrity and manage risks
• People have confidence to raise concerns and speak up
Second line Functions that oversee and support management of risk
• The Department has smart systems and processes that are easy to use and support good practice
• The Department has strong and clear policies
• The governance framework provides effective oversight and monitoring of accountabilities
Third line Functions that provide independent assurance over management of risk
• The Department has an independent and robust audit function
WORKING WITH INTEGRITY | 71.2.2 Integrity Reform Program: achievements These included:
and next steps
• the immediate cessation of the program
The Department’s initial response was swift, coordinator school model. Work commenced
commencing in the wake of the Operation Ord on a robust, alternative approach for providing
hearings in 2015 and closing with the conclusion targeted funding to schools
of the Operation Dunham hearings in early 2016. • the reconstitution of the Department’s
The Secretary set clear expectations for ethical standing committees to address major
conduct and took decisive actions. deficiencies with oversight, accountability and
The initial response included strong actions that transparency
addressed deficiencies in the first line: • legislative reform to ensure the Department
could deal with misconduct confidently
• all executives signed a Leadership Charter,
and swiftly. This sent a clear message that
holding them accountable to new standards
misconduct of any kind would not be tolerated
for ethical leadership
• the overhaul of the Department’s internal and
• the ‘Speak Up’ campaign and service
school audit processes to improve the rigour of
addressed one of the biggest workplace issues
audits.
— the fear of raising concerns. It sent a clear
signal that the Department’s leaders were These initial actions, reported in the Secretary’s
listening to staff, and would act appropriately first report to IBAC, reflected the deliberate and
strategic prioritisation of reforms that would
• the Department embraced the Public Sector
Values as the Department’s Values. provide rapid structural assurance and protect
public funds.
At the same time, structural changes to the
second and third lines were made as the basis for The Diagram demonstrates the themes in which
ongoing improvements. projects in the IRP are grouped. It highlights
the importance of cultural change and the
Department’s Values to the overall reform
program.
The Integrity Reform Program is about more than preventing corruption – it is about building an
ethical culture
Ord
response
Dunham
response
Good Ethical
governance leadership
Integrity
Reform
Smart systems Program Staff support
and controls and development
Underpinned by DET’s Values
8After the initial response, the IRP moved into a
second phase to position integrity reform as a key Our 2017 People Matter Survey data
contributor to system and cultural changes. demonstrates the Department’s success in
effecting cultural change since the Operation
In its second phase, the IRP has concentrated on
Ord hearings. More than embedding a culture
further cultural reform and embedding integrity
of integrity, the results show an organisational
in business as usual processes and practices.
culture that is inclusive, responsive and
Leaders continue to model values and set
collegiate. In relation to measuring our culture
expectations from the top, reinforcing the first line.
of integrity, the results paint a picture of
This phase ensures that integrity underpins all progress and good health. Engagement in the
Department work, now and in the future, and that People Matter Survey was record-breaking for
ethical standards are continually maintained, the Department.
measured and enhanced.
Percentage corporate staff participation in
The ongoing focus on integrity is imperative for People Matter Survey
the Department to meet the evolving and dynamic
needs of our Victorian education system. The
second phase seeks to effect further cultural
change to ensure that all staff embrace the
Department’s Values in their behaviour and
delivery of work.
The Department’s reform agenda has set new
standards for the public sector and has allowed
it to be a public sector leader in integrity reform. 39% 54% 71%
These reports are one of many ways it is sharing
its expertise. 2015 2016 2017
of staff were aware of the public
92% sector values
of staff agreed that earning and
sustaining a high level of public
92% trust is seen as important in the
Department
were confident to raise concerns
80% with their manager
This demonstrates high levels of engagement
in culture reform, a willingness to voice opinions
and a confidence that these opinions will inform
the shared direction.
WORKING WITH INTEGRITY | 9A CULTURE
OF INTEGRITY
UNDERPINS
EVERYTHING
WE DO
10
22. A CULTURE OF INTEGRITY
UNDERPINS EVERYTHING WE DO
IBAC’s Operation Ord and Operation Dunham 2.1 The Values
identified a culture of non-compliance and
entitlement among corporate and school The Department has adopted the Public
employees. Sector Values as the Department’s Values.
The Department has promoted the Values to
IBAC also found people did not speak up about staff by incorporating them in recruitment
suspicious or unusual activity for fear of reprisal, and induction processes and Performance
and because they did not understand their Development Plans. The Department also
obligations as public sector employees. encourages explicit consideration of the Values in
These constituted failures in the Department’s everyday work.
first line of defence. ‘Values’ packs were provided to all corporate
IBAC recommended strengthening the first line of workplaces and then schools in late 2016 and early
defence by: 2017. The packs encourage and support behaviour
and decision-making based on the Values.
• ensuring that employees are aware of and They include posters, quick reference sheets
compliant with the Public Sector Values and and guides, and conversation cards to promote
Code of Conduct, and related policies discussions about common ethical dilemmas.
• ensuring that employees are trained Many schools have reported using the cards to
in appropriate financial management, support staff induction.
procurement and school governance
An eLearning module has been available since late
• encouraging and supporting employees 2016 as another tool to improve understanding
to speak up and report misconduct about the Values.
and corruption
To reinforce the Values, the Seven Values in Seven
• ensuring leaders are accountable for
Weeks initiative (7in7) from April to May 2017
modelling integrity and Public Sector Values
and set the tone from the top. encouraged corporate staff to explore what the
Values mean for them at work. The campaign
In response, the Department is building a high- included stories from leaders on ‘living the values
performance culture by: every day’. Cards were distributed to teams to
• embedding the Public Sector Values and a acknowledge exemplary behaviour led by the
culture of integrity Values.
• improving capability for financial The Department then launched a version of 7in7
management, risk management and ethical for schools, to support school leaders to apply
leadership, particularly of corporate and the Values at their school and in their everyday
school leaders work. The school version focuses on one Value per
• ensuring people feel safe to raise concerns. month, starting with ‘Responsiveness’ in June and
ending with ‘Human Rights’ in December.
A key objective of 7in7 in schools is strengthening
the link between the IRP and positive Education
State messages, such as building pride and
confidence in our schools, and aligning each Value
to practical, system-related reform.
For each monthly Value, 7in7 delivers information
about how decision-making backed by a particular
Value can improve school and student outcomes.
The information also provides practical information
that schools can use to reform existing systems.
WORKING WITH INTEGRITY | 11For example, as part of ‘Responsiveness’ month, Deputy Secretary, People and Executive
school council governance training packs and Services Group Kate Rattigan, said the
Values guides were distributed to school council ‘7 in 7’ values initiative helps us ‘stop and
members. In July, to support ‘Integrity Month’, think about what the Department values
Conflict of Interest Quick Reference Guides look like in our day-to-day lives’.
were distributed to all principals, with a letter
International Education Division
from regional directors. For ‘Impartiality Month’
Executive Director, Joel Backwell said for
in August, the ‘Thanks is Enough’ campaign
him, the values capture ‘what it means to
accompanied the launch of the Goods, Benefits
be a public servant supporting families,
and Hospitality policy.
children and adults to learn for life.’
The sustained focus on Values is increasing
At Kallista Primary School, Principal
employees’ awareness about the Values.
Christine Finighan has posters on the
The People Matter Survey results for 2017
staffroom door describing how the school
indicated that 92 per cent of corporate employees
values sit alongside DET’s Values.
in the Department were aware of the Values and
how they apply to their work. This is a 2 per cent 'Values education is most powerfully
increase from 2016, but 22 per cent higher than learned through relationships. The
the 2017 average for the seven other Victorian values we, as a staff group, demonstrate
Government departments. in our everyday interactions – the way
we speak, listen and act – is the most
Among corporate participants in the 2016 Integrity
powerful vehicle for teaching values to
and Risk Culture Assessment, 85 per cent reported
students,' she said.
understanding the Values and knowing what
behaviour is acceptable. In the 2016 School Staff At Keilor Views Primary School, Principal
Survey, 85 per cent of school staff agreed that Charles Branciforte uses DET resources
integrity was demonstrated at their school. and conversation cards to stimulate
discussion with staff about links to school
community values of ‘Vision, Integrity
and Pride’.
‘There has been a real cross pollination:
we encourage staff to utilise both sets of
values and understand that we operate
by both.’
DET’S VALUES
122.1.1 Investing in our People Strategy 2016–2020 2.1.2 Culture of Integrity and Respect Strategy
The Investing in Our People Strategy focuses The Culture of Integrity and Respect Strategy
on the key areas for corporate employees that applies to all staff and was implemented in 2017.
have the most impact on the Department’s It provides a roadmap for cultural reform to 2020.
performance and delivery. It makes the key The strategy establishes a collaborative, cross-
objectives of the IRP’s culture reform project department approach to align and strengthen
business as usual activities. engagement on relevant initiatives.
The strategy contains five objectives, which Under the strategy, the Department is taking steps
together provide clear direction for these key to build and maintain a positive ethical culture
areas. The aim of each objective is to provide a by providing guidance to all staff about ethical
holistic and balanced approach to the way staff decision-making, and encouraging awareness
work, ensuring they have appropriate skills, can of the Values, and reflection on their use in
perform at their best, and feel empowered, valued everyday work.
and supported.
The strategy reinforces the commitment the
The objectives are: Department made to building an ethical culture,
by:
• Leading for outcomes – strengthening
leadership practice and developing our future • increasing awareness among employees about
leaders the Values and their relevance to their work
• Learning-centred organisation – developing • ensuring leaders communicate explicitly the
staff to be their best relevance of the Values to their teams
• Culture of integrity and respect – ensuring • encouraging employees to seek advice about
staff act with the highest ethical standards, acting with integrity, being accountable
and treat each other with respect for their actions and speaking up about
• Safe and inclusive workplaces, free from poor behaviour
physical or psychological harm, where • ensuring leaders act against poor behaviour
everyone’s contribution is valued and model exemplary behaviour.
• Empowered and responsible people who
deliver on commitments at every level of our
organisation.
The plan to achieve these objectives includes a
Department-wide focus, and cohesive monitoring
and reporting. This ongoing program of work
reports biannually to the Department’s Workplace
Development and Culture Committee.
WORKING WITH INTEGRITY | 132.2 Setting the tone from the top — As part of the program, executives were assessed
ethical leadership against ethical standards (including those related
to the Values, people management and financial
IBAC found the following ethical leadership management). Participants in the Development
failures: Centre completed:
• lack of accountability for decisions and • ‘360-degree’ surveys (that is, comprehensive
enforcing actions feedback from manager, colleagues, staff and
• lack of awareness of how to address concerns internal and external stakeholders)
• decisions made on trust and history, and not • a half-day development activity including
on policy or procedures role plays, presentations and group problem-
solving
• lack of connectivity between schools and
corporate • an intensive debrief and coaching session
to guide officers through their results and
• lack of mobility of senior staff, leading to the
establish a development plan.
development of unhealthy networks in some
parts of the Department. The 360-degree surveys identified behaviours
relating to leading with integrity (ethical practices
The Integrity Reform Program has raised the
and role-modelling the Values) as the second and
standard of expectation for ethical leadership
third highest-rated strengths for the executive
across the Department and supported staff at all
cohort.
levels to lead ethically.
The results have informed individual development
2.2.1 Expectations of executives plans, which leaders are now implementing to
address their professional development. Another
Department leaders are the key to fostering an
360-degree survey will be undertaken with all
environment that encourages ethical behaviour.
executive officers in late 2017.
As reported to IBAC in 2016, all senior leaders have
The Department is now participating in the whole
committed to the Leadership Charter to model
of government Victorian Leadership Academy
the Values and the behaviours the community
which supports leaders to develop the desired
expects.
capabilities for the Victorian public sector
The Department’s expectations of its leaders underpinned by the Values.
have been made clear in executive Performance
The 2016 People Matter Survey results provided
Development Plans, position descriptions,
baseline data on VPS employee perception of how
induction materials and the assessment criteria of
well leaders demonstrate the Values. Results in
the Executive Officer Development Centre.
2017 highlighted an eight per cent improvement
The Executive Officer Development Centre is a from the 2016 results across the three questions
program introduced in 2016 to support executives regarding leadership behaviours.
to demonstrate ethical leadership in practice.
In the 2016 Integrity and Risk Culture assessment,
87 per cent of corporate participants agreed that
their immediate manager communicated the
importance of professional and ethical behaviour
to staff.
142.2.2 Pathways and rotation
Chris Thompson committed to the
To strengthen cross-Department leadership and
Leadership Charter around the same
knowledge-sharing, and to identify potential
time as being appointed as one of the
leaders, the Department has established two
Department’s 17 new Area Executive
initiatives: a Pathways Program, to bring school
Directors.
leaders into corporate roles, and an Executive
The timing was no coincidence. Chris said Rotation Program.
the expansion of the regional workforce
The Pathways Program is in its second intake
demanded clear standards for authentic,
and has involved 20 school leaders. The program
effective and ethical leadership across
improves understanding of public administration
the Department.
in schools, and improves the connection between
‘The charter made it clear that we were schools and corporate areas. It also aims to
accountable not just to government increase staff transitioning from schools into
and the Department, but also to our corporate roles. Comments from participants
communities.’ in the first intake were positive. Some said the
‘It connected our daily work to the lived experience opened new potential career pathways
experiences of students and families, and provided opportunities to better connect with
reminding us why we do our jobs, and who and support their school communities. A formal
we are here to serve.’ evaluation of the Pathways Program will be
undertaken in Term 4, 2017.
Chris said the relevance of the charter
made it easy to use with his team. ‘It was The Executive Rotation Program involves
a strong motivating tool, particularly for executives taking short-term placements to areas
the many new starters to the region.’ outside their roles. The expectation is that all
executives will participate in this program and that
In mid-2016, Chris completed the it will form part of leadership development plans.
executive officer development centre, The Department has committed to implementing
which was designed to help bring the the planned rotation of senior staff who have been
leadership charter to life. in their roles for an extended period.
‘This process provided a unique As of August 2017, 68 executive rotation
opportunity for reflection, both on myself opportunities have been advertised.
and on the strengths, needs and styles of
my colleagues. It supported me to better In an evaluation of the Executive Rotation
understand them at a time when we relied Program, 79 per cent of participants said they
on strong collaboration.’ were ‘very satisfied’ with the program, and 86 per
cent said they were either ‘likely’ or ‘very likely’ to
‘By assessing my own development recommend the program to colleagues.
through a new lens, I was better able to
support my team of Senior Education
Improvement Leaders and VPS staff with
their Performance Development Plans.’
‘Six months on, we have made good
progress developing our influencing,
negotiating and partnership building
skills.’
WORKING WITH INTEGRITY | 152.2.3 Integrity Leadership Groups 2.3 Supporting a culture of integrity in
The Department’s five Integrity Leadership Groups our workplaces
are reference groups based in each region and IBAC identified systemic problems that allowed
central office. Their members are acknowledged senior officials to breach public trust, including
for their ethical leadership and capacity to perceived and actual lack of consequences,
effect change. feelings of disempowerment, and fear of
The Integrity Leadership Groups were relaunched reprisal for speaking up. IBAC also found no
by the Secretary in early 2017, with some new ethical decision-making framework, a lack of
members and a focus on ethical leadership. accountability for decisions and actions, and a
Eighty-four school and corporate leaders now lack of awareness and emphasis on managing
champion the program across the system. conflict of interest.
Since 2017, Integrity Leadership Groups have made In response, the Department has supported staff
a range of tangible contributions to the Integrity to understand their obligations through training.
Reform Program. These include developing They are also supported and encouraged to
the ‘Thanks is Enough’ awareness campaign, raise concerns.
enhancing school council governance guidance To measure progress, the Department made an
materials, preparing case studies on conflict assessment of Integrity and Risk Culture in a staff
of interest, supporting the development of the survey. The 2016 results have provided a baseline
COI Quick Guide, evaluating the 7in7 corporate measure, and the assessment will be conducted
program and contributing to training material for annually for at least the next two years to inform
business managers. further work and gauge progress.
Members have also been engaging their peers in
the Integrity Reform Program and sharing good- 2.3.1 Speak Up service
practice stories across the system through the
Within six months of the Operation Ord hearings,
7in7 schools initiative. They will also support the
the Department established Speak Up, a service
implementation of the ethical decision-making
for staff to make confidential, anonymous
model in new training opportunities and resources,
complaints and reports if something doesn’t look
including a tool to support business managers, by
or feel right.
December 2017.
Speak Up was launched by the Secretary in
The Integrity Leadership Groups are currently
December 2015 and is open to receive reports
supporting an action research project through the
24 hours a day, seven days a week. The rapid
Department’s Pathways program to identify the
establishment of the service sent a strong signal
factors and measures that contribute to ethical
to staff that the Department was listening to and
and respectful school workplaces. The findings of
supporting staff. Speak Up was promoted again
this study will inform future school initiatives from
in Term 1, 2016, and continues to be promoted in
Term 4 2017.
schools and corporate workplaces
Speak Up has received 287 calls since its launch in
December 2015. Employees also continue to raise
concerns through established avenues, including
with their managers and directly with the Integrity
and Assurance Division.
Work to improve staff confidence in speaking up
continues. By December 2017, all corporate leaders
will have received resources and direction to
reiterate the importance of raising concerns, and
how to do so in their teams.
16Survey results indicate that Speak Up and its The ILOs provided examples of how
promotion have supported employees to feel they help:
safe to raise concerns. For example, in the 2016
South West Region ILO Kelly Bull assisted
Integrity and Risk Culture Assessment, 88 per cent
a new principal to mitigate a perceived
of corporate participants said they knew how to
conflict of interest relating to the
report misconduct. The 2016 School Staff survey
employment of his wife at school.
found 84 per cent of school staff felt confident to
raise concerns without fear of reprisal. Similarly, in ‘The Principal allocated decisions about
the 2017 People Matter Survey of corporate staff, performance, progression and allocation
80 per cent of respondents said they felt confident of duties to the Assistant Principal and
approaching their manager to discuss concerns Senior Education Improvement Leader.’
and grievances —an increase from 75 per cent In the North Eastern Region, Russell
in 2016. Polson advised a principal on a staff
member’s request to pursue other
2.3.2 Integrity Liaison Officers employment. This included measures to
The Integrity Liaison Officers (ILOs) are based in manage potential conflicts of interest and
the Department’s four regions to engage staff ensure the additional work did not affect
in integrity reform and support the delivery of their school responsibilities.
key integrity initiatives in regional workplaces Nicole Fausett ran a session with 140 staff
and schools. The ILOs are also key contact at the South East Region’s Moe office to
points for advice about ethical decision-making increase their understanding of ‘Thanks
and integrity. is Enough’, a new standard for gifts,
In 2017, as engagement with schools increases, benefits and hospitality, and processes
the ILOs have led 81 presentations with for speaking up.
approximately 6000 school leaders compared to Colin Wellard, in the North West Region,
48 presentations with 1555 school leaders in 2016. supported a principal to lead discussions
Engagement has included attendance at Term 2 about the Department’s Values with staff.
Principal Regional Forums, Term 3 Area Forums
and network meetings across the state. ‘She provided feedback that the
discussions have been ongoing; that staff
The ILOs have been essential to improving the are more reflective and have greater
ability of staff to identify and manage conflict of confidence in talking about what they
interest in 2017. They are increasingly called on for expect from each other at work.’
advice and referrals, including from staff groups
with particularly complex conflicts, such as allied
health professionals.
The ILOs have contributed to the Department’s
library of case studies, based on de-identified
examples, to support ‘integrity moment’
discussions in teams. As of September 2017, 42 are
available on the dedicated Integrity Portal.
The ILOs have been critical to the reinvigoration
of Integrity Leadership Groups. Throughout 2017,
they have worked with the ILG chairs to ensure
representation across all corporate groups
and regional areas, and to develop and deliver
work plans aligned to Integrity Reform Program
priorities.
WORKING WITH INTEGRITY | 172.3.3 Integrity training and ethical decision- Ethical decision-making model
making
The ethical decision-making model has been
embedded in induction programs for corporate
staff, financial management training programs Recognise the nature of the issue
for corporate and school staff, school councillor
training, principal professional development
courses offered through the Bastow Institute of
Educational Leadership (Bastow Institute), and the
Schools Policy and Guidance resource.
Get the facts
Ethical decision-making is also used as a basis
for ‘integrity moments’, when staff and leaders
talk about integrity at the start of meetings. The
Ethical Decision Making Framework is provided as
a standalone resource which includes case studies
and online learning materials.
The 2017 People Matter Survey of corporate staff Evaluate alternative actions
showed 79 per cent of respondents agreed that
people in their work group demonstrate objectivity
in decision-making (an increase from 73 per
cent in 2016), and 80 per cent agreed that their
manager demonstrates objectivity in decision-
making (up from 72 per cent in 2016). Make a decision
Among the respondents to the Integrity and Risk
Culture Assessment, 82 per cent said they knew
the indicators for fraud or corruption, and 88 per
cent believed people in their work area were good
at recognising ethical issues. Test it
2.3.4 Training and support for school leaders
Operation Ord identified a lack of appropriate
school governance, particularly in relation to
principals and business managers, a culture of non-
compliance with financial and procurement policies, Act
and a lack of oversight by the Department’s central
or regional offices of the program coordinator
school model.
In response, the Department committed to
strengthening financial controls and compliance
in relation to school governance. This included Reflect on the outcome
strengthening the first line of defence with training to
build the capacity of school leaders, including school
councillors, to understand and comply with the
requirements of their role. This training will allow the
Department to improve the effectiveness of reforms
to the second and third lines of defence, such as the
school audit program, funding governance and the
cessation of the program coordinator school model.
18Melody Yang has two daughters in Grades 2.3.4.1 Principal training
Prep and One at Serpell Primary. In 2017,
To ensure principals, assistant principals and
she joined the school council to make a
business managers understand their finance and
difference to her school community.
procurement responsibilities, the Department
Within a matter of weeks, Melody had has developed two courses: Finance Matters and
completed face-to-face training in school Procurement Mindset.
council governance to help her feel
Finance Matters improves the financial
confident in her new role.
competence of principals, assistant principals,
‘The training was very informative and business managers and, where relevant, leading
assisted in making me an effective teachers, and provides flexible and scalable
member and active contributor to training options. To date, 1767 school leaders have
meetings.’ completed Finance Matters modules.
Melody said the training also helped The Department’s ethical decision-making model
her understand and uphold high ethical has been incorporated in Finance Matters and
standards. ‘Practices on how to handle in the Strategic Management for School Leaders
Conflict of Interest issues were shared by program, delivered by the Bastow Institute.
experienced school councillors. Having
the opportunity to discuss these issues 2.3.4.2 Business manager training
face-to-face was very valuable for
IBAC found some business managers failed in their
somebody new to council.’
financial management duty by not questioning
School Council Treasurer, Richard Turner illegitimate or inappropriate invoices.
and NEVR Integrity Leadership Group
The importance of the business manager role in
member has noticed the positive impact
schools was also noted in the 2015 Government
of the training on the council.
Schools Funding Review (Bracks Review). It
‘I definitely believe the training has recommended the compulsory accreditation of
empowered new councillors to better business managers with an appropriate course
communicate and participate in and that accreditation be supported by a
matters relating to our integrity and comprehensive framework for business managers.
accountability. For example, a new
In response to the Bracks Review and as part
councillor was confident to question the
of its response to IBAC, the Department began
approval process for upcoming school
developing a capability framework for business
camps. Councillors are also very receptive
managers. This framework is now complete. It
to hear about, and contribute to, issues
includes integrity and ethical practice as part of
raised through the Integrity Leadership
agreed professional standards. The framework
Group, including the new Conflict of
was developed with Bastow and is based on a
Interest Quick Guide, and their potential
framework developed by the United Kingdom’s
relevance to council members and
National Association of School Business
leadership staff.’
Management.
WORKING WITH INTEGRITY | 19New position descriptions for business managers 2.3.4.3 School councillor training
have also been developed. They define the
IBAC made no findings about school councils
capabilities against technical skills, people
during the Operation Ord and Operation Dunham
skills and self-mastery, which correspond to the
hearings, and they were not a key cohort targeted
Business Manager Framework. Key selection
by IRP reforms. However, the Department is now
criteria for business managers reflect the
improving the financial skills of school councillors
capability framework and the Values, and
as part of its efforts to strengthen school funding
have been included in Recruitment Online, the
governance.
Department’s online job advertisement and
recruitment management system for Victorian The Department has delivered a free school
Government school jobs. council training package, Improving School
Governance. The training clarifies the roles and
The Department has partnered with RMIT as the
responsibilities of school councillors in financial
lead TAFE to develop a program which draws
decisions, ensuring greater transparency and
on the capabilities included in the framework
oversight of program funding to schools.
in consultation with relevant stakeholders.
The Certificate IV in Business (BSB40215) will In the last financial year, this training reached 2553
be nationally recognised and develop skills participants in Victorian government schools. In
in managing teams, project management, June 2017, all school councillors yet to complete
governance, emotional intelligence, financial the training were mailed training materials.
management and human resources. Additional support and resources are also
The pilot of the training program began in Term 3, available to ensure effective governance and best
2017. The Department is funding 60 places via practice in school councils, including templates to
TAFE institutes in specific school regions. An support school council operations, reporting and
evaluation plan for this pilot is in development. oversight, and documents that detail the roles and
responsibilities of school councils. School councils
Engagement with principals to enhance
are now required to comply with the procurement
understanding of the role of business manager
thresholds in the Finance Manual for Victorian
began in August 2017.
Government Schools.
As part of the Learning Management System
(LMS), a central repository of business manager
training programs and development opportunities
will be available by December 2017. It is intended
that the majority of business managers will have
participated in the program within three years.
20SMART SYSTEMS AND CONTROLS TO OVERSEE AND GUIDE OUR ACTIONS 3
3. SMART SYSTEMS AND CONTROLS TO
OVERSEE AND GUIDE OUR ACTIONS
The IBAC investigations found that many of the In response, the Department prioritised rapid
Department’s second line of defence systems and changes to processes and systems to develop
processes were inadequate. structural protection against misuse of public
funds. These changes included:
Operation Ord found an over-reliance on internal
auditing to identify non-compliance and a failure • new or improved policies and frameworks to
to mitigate non-compliance through effective guide and support staff to work in a way that
risk management. This allowed unscrupulous results in value for money, compliance with
individuals to exploit vulnerabilities in the requirements and improved accountability
Department’s systems over an extended period. • new monitoring and reporting systems
IBAC found issues including: (including technology) to ensure the new
processes are being followed, and that staff
• a failure of controls and general lack of are held accountable
rigour around procurement, such as business
• refreshed governance bodies that use a risk-
managers failing to check goods and services
based approach to reporting.
outlined on invoices had been delivered
• poor financial management controls, including
3.1 Corporate governance
a general acceptance of informal ‘banker’
school arrangements, the maintenance The Secretary committed to implementing a
of unofficial records, and the failure of strong governance model to address:
some principals to properly fulfil financial
• lack of clarity about accountability at every
administration obligations
level, allowing people to avoid responsibility
• different financial systems in schools and
• delegation of authority not clearly
corporate areas made it difficult to oversee
documented in a holistic way
schools’ detailed financial data
• lack of oversight, compliance and monitoring
• a culture of non-compliance with important
of accountabilities and responsibilities
policies and procedures, including
those relating to procurement, financial • unclear roles and responsibilities between
management, recruitment, travel and use of schools, head office and regions
corporate credit cards. • misalignment and gaps across and between
In Operation Dunham, IBAC also found that a committees, and to the Executive Board.
failure of the second line of defence had enabled In early 2015, the Department conducted a broad-
excesses associated with the Ultranet project. based review of departmental governance. Of
In particular, IBAC identified significant failings the five stages of maturity (‘weak’, ‘developing’,
in relation to governance and procurement ‘integrated’, ‘mature’ and ‘advanced’), the
arrangements for major projects. IBAC review found the Department’s governance
recommended that the Secretary report on action arrangements were ‘developing’. It set a target of
taken to strengthen internal procurement and ‘mature’ by the end of 2017.
governance arrangements for major projects, In response, the Department reconstituted
including proper record keeping, maintenance its standing committees to address major
of conflict of interest registers, and proper deficiencies with oversight, accountability and
documentation of complaints regarding probity. transparency. Committee terms of reference,
work plans, delegations and committee review
processes were strengthened and aligned.
Independent expert members were engaged
to scrutinise and enrich decision-making and
engaged a principal governance adviser was
appointed to oversee reform.
22An assessment in April 2017 indicated that the Importantly, this extends to identifying the
Department was on course to achieve a ‘mature’ relationship between projects, the interventions
rating by the end of 2017. associated with treatments of the Department’s
Strategic Risks, and the relationship with the
The Department is confident that work to
Department’s output performance targets.
improve governance will achieve its objectives.
Ongoing work includes the development of a new
corporate policy framework and a new compliance 3.1.2 Integrity Committee
framework. These will be benchmarked for good Established in May 2016, the Integrity Committee
practice against departments of education in oversees the Integrity Reform Program.
New South Wales and Western Australia, as well
The Secretary chairs the committee, which
as universities.
includes four other members of the Department’s
Executive Board. The committee also has three
3.1.1 Enterprise Portfolio Management Office
independent members, including two subject
(EPMO)
matter experts and the independent Chair of the
To improve large-scale project management, the Department’s Audit and Risk Committee.
EPMO division was established to develop and
Apart from Executive Board and Education State
introduce a methodology for project, program and
Board, the Integrity Committee has the most
portfolio management across the Department.
senior membership of all committees in the new
Through this, the EPMO is providing a Centre of governance structure launched in 2015.
Excellence for the business life-cycle. It supports
The committee receives updates on the progress
the Department’s leaders to make decisions, by
of the Integrity Reform Program at each meeting
guiding prioritisation and investment, aligning
and makes decisions about program priorities and
activity, and creating productive connections
integrity issues across the Department.
across the Department.
The Integrity Committee offers stewardship and
The EPMO is integral to ensuring that:
advice to support integrity reform as a whole
• Education State and Department strategies and provides an important forum to debate and
are implemented, and performance discuss integrity issues at the most senior level.
requirements are realised via well planned
programs using rigorous project methods 3.1.3 Procurement and Probity Committee
• an integrated set of program benefits are
The Procurement and Probity Committee provides
measured, managed, monitored and refined
strategic oversight of procurement activities
for optimal investment and so that the
to ensure value for money, accountability and
Department’s strategic goals are achieved
probity. Its role includes ensuring compliance with
• programs and projects are invested in, Victorian Government Purchasing Board (VGPB)
designed and implemented within a framework guidelines, the Financial Management Act 1994
of transparency, accountability and integrity. and any standing orders made under the Act.
To achieve this, the EPMO has introduced a
The committee has two permanent members:
scalable, industry-standard methodology for
a chair without direct ‘line management’
project implementation. An executive dashboard
responsibility for procurement, and the Executive
has also been introduced as a monitoring tool for
Director of Procurement Division. Other members
departmental executives. It supports decisions
are drawn upon from the range of executive
about implementation of major projects,
functions across the Department.
prioritisation and future investments. The
dashboard includes key milestones and health
indicators for projects, giving executives greater
visibility over the life of a project and benefits
realisation for the Education State Board.
WORKING WITH INTEGRITY | 233.1.4 Integrity and Assurance Division 3.2 Risk management
Operation Ord found an urgent need to establish The Strategy and Performance Group (SPG)
a new division to manage and deliver integrity was created in 2016 to unite the functions of
measures cohesively. risk management with strategic planning, data
The Integrity and Assurance Division (IAD) and evidence, and program management
was established in late 2015 and is now the office functions.
Department’s central point for integrity reform SPG is now the central hub for frameworks
and oversight. IAD leads communication, and standards for data, evaluation, system
promotion and coordination of integrity reform performance and accountability. Incorporating
activities across the Department. It supports risk management with planning and strategy
delivery of the Integrity Reform Program projects emphasises how risk management should always
as well as its own projects. These include projects be part of enduring planning, strategy and
relating to audit, assurance and the Speak Up decision-making.
service.
In 2017, the Department introduced a new Risk
IAD also investigates fraud and corruption and Management Strategy, which describes how it
delivers internal audit and assurance functions. will implement the Risk Management Framework.
IAD reports to the Secretary directly on serious The strategy is based on the Victorian Managed
integrity matters. Insurance Authority’s (VMIA) seven domains of
IAD continues to work closely with key effective risk management.
stakeholders, including principal groups and The three lines of defence risk management model
business manager peak bodies, to build effective was incorporated into the Risk Management
integrity reforms and identify issues. Framework. This strengthens the ownership,
IAD also draws on the Department’s experience accountabilities, resources and governance for risk
of corruption and the consequent Integrity management activities across the Department
Reform Program to provide expert leadership to by ensuring the right support mechanisms and
the broader Victorian Public Sector. It has made controls are in place.
presentations to leading public administration The increased focus on risk management by the
bodies, the Australia and New Zealand School Department’s governance bodies is evidenced by:
of Government and the Institute of Public
• strategic and operational risks have or will be
Administration Australia.
considered at the four major planning sessions
for the Executive Board in 2017
• key risks are discussed at the Executive Board
as a result of the Quarterly Strategic Review
(QSR) process
• the Audit and Risk Committee (ARC) has
dedicated time to discuss risk and for each of
the Groups discusses its priorities and risks at
every ARC meeting
• relevant risk management information
is included in procurement activities and
papers that are presented to the Probity and
Procurement Committee.
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