Two senior National Disability Insurance Agency managers have been placed on leave while the agency considers findings against them in a Victorian investigation into the handling of Covid-19 business grants.
NDIA chief executive Graeme Head told a Senate estimates hearing that “neither officer is on duty” as he assesses what action may be appropriate.
The pair are among three senior Victorian public servants criticised by the Independent Broad-based Anti-corruption Commission over the payment of grants to businesses that were allegedly ineligible. IBAC estimated the issue may have cost taxpayers almost $260 million.
Head confirmed that “two current NDIA employees are the subject of adverse findings by IBAC” in its Operation Harmonia special report. He did not identify them, saying the agency’s review was still under way.
“I acknowledge that there is legitimate community interest in this matter, particularly given the importance of integrity and public confidence in the National Disability Insurance Agency and the administration of the National Disability Insurance Scheme,” Head said.
“As agency head, I am taking all steps available to me to ensure the matters are considered carefully and appropriately. That work is under way.”
The two officials were identified in the IBAC report by their former positions as an associate secretary and a deputy secretary. Both disputed the adverse findings.
IBAC found that information about suspected grant payments to ineligible applicants was withheld from a report intended for the then Victorian minister Martin Pakula and the state auditor-general.
The department’s integrity services unit had estimated in November 2021 that almost $285 million had been paid to businesses that did not qualify for the Business Costs Assistance Program. Businesses were required to be registered for GST to claim grants of up to $97,200, although some applicants had legally backdated their registrations.
According to IBAC’s findings, the deputy secretary directed that the estimate be removed from the report after discussing it with the associate secretary. The associate secretary also did not disclose the suspected loss of public money to department secretary Simon Phemister.
The commission described the conduct as “a clear failure to act in line with the high integrity standards expected of Victoria’s public officers”.
The deputy secretary told IBAC that they had been following instructions from the associate secretary. The associate secretary said the suspected grant fraud was not escalated because they disputed the integrity team’s analysis.
Head said he was unable to comment on whether the NDIA knew about the IBAC investigation when the two officials were appointed. He said the agency would need to examine when the investigation began and other relevant circumstances before deciding what further action to take.
The NDIA administers the $50 billion disability scheme, which supports about 782,000 people.
