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Corruption prevention strategy

Purpose

The purpose of the Art Gallery of New South Wales’ (AGNSW) Corruption Prevention Strategy is to:

  • provide a framework for detecting, preventing and controlling fraud and corruption risks in relation to the AGNSW; and

  • outline the behaviour expected of staff in relation to any suspicion or detection of fraud or corrupt conduct related to the AGNSW; and

  • foster within the AGNSW an ethical climate that permeates all of its activities.

Further, the Corruption Prevention Strategy is designed to:

  •  increase awareness of the high ethical standards of accuracy, honesty and accountability expected of every AGNSW employee;

  • minimise corrupt conduct through the promotion, development and implementation of appropriate policies, procedures, mechanisms and controls; and

  • facilitate the detection, reporting and investigation of corrupt activities.

Background

In keeping with its high standards of probity and accountability, the NSW Government requires all NSW public sector agencies to implement and maintain a fraud and corruption control framework to prevent, detect and respond to fraud and corruption (both externally and internally).

To meet this requirement, AGNSW has a Corruption Prevention Strategy which includes:

  • An integrated macro policy for fraud and corruption control

  • Responsibility structures for managing fraud and corruption

  • Fraud and corruption risk assessment

  • Staff awareness and education measures

  • Consumer and community awareness

  • Fraud and corruption reporting systems

  • Processes to respond to suspected fraud and corruption

  • Protected disclosures

  • Robust third-party management systems

  • External notification

  • Investigation standards

  • Conduct and disciplinary standards

  • Annual review of the Corruption Prevention Strategy and reporting

AGNSW has zero tolerance to any form of fraud or corruption.

 This approach is consistent with NSW Audit Office and Independent Commission Against Corruption (ICAC) Guidelines.

This policy applies to all AGNSW staff, including permanent, part-time and casual staff, as well as temporary and seconded staff.

AGNSW is committed to the management of its resources, including its reputation, in the most effective and economical manner possible and acknowledges its associated accountabilities. To this end, AGNSW maintains a strong ethical culture and an effective internal control environment to minimise the likelihood of corruption. It also implements all necessary measures to effectively manage the risk of corrupt conduct. Management of corruption prevention within AGNSW is holistic and complementary. AGNSW’s staff, along with its management practices, systems, policies and procedures, are key factors in preventing and detecting corrupt conduct.

Fraud and corrupt conduct

There are many types of corrupt conduct, fraud being one of them. The terms corruption and corrupt conduct are used throughout this document as they are inclusive of fraud and all other forms of corrupt conduct.

Fraud is a common form of corrupt conduct. It is any practice which involves the use of deceit to confer some form of benefit upon the perpetrator, either directly or indirectly, and/or results in some form of loss to the entity defrauded. Fraud is not restricted to monetary or material benefits.

Corrupt conduct is the intentional or deliberate misuse of public office and occurs when a public official is dishonest or biased in the exercise of official functions. It could also include a public official breaching public trust and/or misusing information or material for personal gain or for the benefit of any person. It is corrupt conduct for any person to adversely affect the honest and impartial exercise of official functions.

Corruption can be committed by persons inside or outside AGNSW; either alone or in collusion with other staff or people outside of the organisation. Sections 7, 8 & 9 of the Independent Commission Against Corruption Act 1988 (NSW) (ICAC Act) give a more detailed description of the nature of corrupt conduct (see Attachment A). For practical examples of corrupt conduct, see Attachment B.

In accordance with section 9 of the ICAC Act (as set out in Attachment A), conduct does not amount to corrupt conduct unless it could constitute or involve:

(a) a criminal offence;

(b)  a disciplinary offence;

(c)  reasonable grounds for dismissing, dispensing with the services of or otherwise terminating the services of a public official; or

(d) in the case of conduct of a Minister of the Crown or a member of a House of Parliament, a substantial breach of an applicable code of conduct.

Responsibility structures

The key groups who have responsibility within AGNSW’s corruption prevention framework are:

The Board 

The Board have visibly endorsed the Corruption Prevention Strategy and AGNSW’s measures to mitigate fraud and corruption risks.

As part of its fiduciary duties, the Board is ultimately responsible for ensuring that AGNSW meets all legislative and regulatory requirements. Unethical conduct poses a real risk that the Board must mitigate in order to maintain a successful business. The Board is accountable for ensuring that an ethical business environment is maintained and that a system to effectively minimise corruption is established and maintained within AGNSW.

The Director 

The Director is responsible for the effective and economical use of AGNSW’s resources and for determining appropriate controls against corrupt conduct. This responsibility is appropriately delegated to the Executive and senior staff as detailed in AGNSW’s Delegation Manual.

Under Section 11 of the ICAC Act, the Director is required to report to ICAC any matter that he or she suspects, on reasonable grounds, concerns or may concern corrupt conduct.

The Finance, Audit and Risk Committee

The Finance, Audit and Risk Committee (the Committee) is the focal point for communication between the Board, the external auditors, the internal auditors and management, as their duties relate to the financial accounting, reporting and internal controls and compliance.

The Committee assists the Board in fulfilling its responsibilities as to accounting policies and reporting practices of AGNSW. The Committee is the Board’s principal agent in assuring the independence of AGNSW auditors, the integrity of management and the adequacy of disclosures to the public.

The Committee oversees and monitors the adequacy of the Corruption Prevention Strategy and the processes and systems in place to capture and effectively investigate fraud related information. The effectiveness of the policy will be reviewed at least every two years.

The Committee does not take over the responsibilities that the Director has under the Public Finance and Audit Act 1983 (NSW).

The right of the external auditors to meet with the full Board of Trustees is, however, not restricted. The delegation of various functions to the Committee does not relieve the Board of Trustees of its duties and responsibilities, but merely assists it in carrying out these responsibilities.

The Executive and Leadership Team

The Executive and Leadership Team are required to take a leadership role in promoting ethical behaviour within AGNSW. They are responsible for:

  • identifying all factors in their workplaces that may contribute to unethical conduct and for implementing measures to address them;

  • creating and maintaining a work environment that supports ethical conduct and accountability for risk management;

  • ensuring that staff are aware of and implement AGNSW’s Policies and Procedures to prevent corruption;

  • maintaining appropriate internal controls to minimise risk; and

  • monitoring the effectiveness of internal controls.

All Staff

Customers, stakeholders and colleagues have a right to expect that staff at all levels perform their duties in the public interest and carry out their work in a fair and unbiased way, and that decisions they make are not affected by self-interest, private affiliations, or the likelihood that they or people or organisations close to them, will financially gain or lose.

All AGNSW staff, including the Director, the Executive, Managers and other staff, are required to promote an ethical work culture by:

  • understanding the responsibilities of their positions;

  • familiarising themselves with all approved AGNSW Policies and Procedures and adhering to them at all times;

  • being open with their colleagues;

  • leading others by example;

  • understanding the risk factors that can lead to corrupt conduct;

  • demonstrating by actions and statements that AGNSW does not condone or tolerate corrupt conduct (e.g. by acting ethically, honestly and lawfully);

  • encouraging ethical conduct; and

  • taking corrective action before a situation escalates.

They are also expected to act in a professional manner at all times by:

  • complying with all legislative requirements and AGNSW Policies and Procedures, including the Code of Ethics & Conduct;

  • performing their duties with skill, care, diligence, honesty, integrity and impartiality at all times;

  • avoiding misuse or waste of AGNSW resources;

  • planning the use of AGNSW information, money, property, goods or services, so that use is efficient and economical;

  • taking proper care of AGNSW property;

  • using official AGNSW information for authorised and official purposes only;

  • dealing with the public, colleagues and other stakeholders in an ethical manner that fosters positive perceptions of AGNSW;

  • promptly reporting any corrupt activity, even if it is based only on a suspicion, to the relevant Manager or Executive Director for further investigation by AGNSW. AGNSW will take reasonable steps to protect the staff-member from any adverse treatment as a result of reporting corrupt activity (or suspected corrupt activity) and to ensure that confidentiality is maintained – see also AGNSW’s Public Interest Disclosure Policy for information on statutory protections available in respect of certain disclosures; and

  • providing assistance in investigations.

Fraud risk assessment

AGNSW is committed to ensuring that high standards of corporate governance apply, and are seen to apply, to the management of its business. Strategic initiatives in this regard include:

  • ongoing monitoring of and reporting to the Board on the effectiveness of its Corporate Plan and associated Operational Plans;

  • implementation of an Internal Audit program and immediate implementation of audit recommendations; and

  • implementation and monitoring the effectiveness of a wide range of Policies and Procedures developed to satisfy statutory requirements, Government policies and the organisational fulfilment of all probity and accountability requirements.

AGNSW is also committed to the development of a “Risk Management” approach to business which is aligned with the business imperatives, the mitigation of risks within AGNSW’s Corporate Governance framework and the creation of an environment where managers are accountable for risk management. Strategic initiatives in this regard include:

  • monitoring the effectiveness of risk management in the implementation of key strategies and project based proposals;

  • development, and monitoring the effectiveness, of a framework of key policies and procedures to guide the risk management process;

  • development of a risk management planning that links corporate risks to risk mitigation actions and performance indicators in the Operational Plans of Departments throughout AGNSW as part of the corporate planning process Framework; and

  • policies and procedures for managing people, including recruitment checks.

In this context, AGNSW is able to readily identify areas of potential or actual corruption risk and promptly develop policies and procedures which are conveyed to all staff and monitored carefully.

To date, the following policies and procedures have been implemented to assist corruption prevention in AGNSW:

  • Code of Ethics and Conduct

  • Financial and Administrative Delegations Manual

  • Acceptable Use Policy for IT Equipment

  • Financial policies and procedures

  • Gifts, Benefits and Hospitality

  • Grievance and Harassment

  • Procurement policy and plan

  • Public Interest Disclosures policy

  • Use of Electronic Devices

  • Conflict of Interest Policy

  • Motor Vehicle Policy

  • Harassment Policy

  • Induction Handbook

  • Working hours, Attendance and Leave Arrangements

AGNSW will monitor the effectiveness of its Corruption Prevention Strategy in the context of its Internal Audit Program and in accordance with the NSW Audit Office’s “Self-Audit Guide” and ICAC’s “Fighting Fraud Checklists”, and any other applicable guidelines.

Staff awareness

All AGNSW staff will be required to attend training programs on the Corruption Prevention Strategy and their responsibilities for preventing, detecting and reporting fraud and corruption, and appropriate ‘refresher courses’ provided by management.

AGNSW’s Policies and Procedures are readily available to all AGNSW staff via the Intranet and M: Drive. When a new policy is promulgated, the Executive are advised immediately and asked to ensure that all staff in their respective business units are aware of and implement the policy. At the same time, all staff are advised of the new policy and requirements associated with it.

New staff to AGNSW, as part of their induction, are advised of the existence of AGNSW’s Policies and Procedures and where they can be accessed. They are given a copy of the Code of Conduct and the Corruption Prevention Strategy and are required to sign a document verifying that they have received the documents and will implement all requirements contained therein.

Customer and community awareness

AGNSW’s standards regarding ethical behaviour are principally conveyed to customers, stakeholders and the community through the manner in which its staff conduct business with them. This is the strongest and most effective means of demonstrating our ethical standards.

Probity auditors will continue to be deployed in AGNSW’s business negotiations with the private sector. All external parties assisting AGNSW in these negotiations are required to sign a Confidentiality Agreement and adhere to all probity arrangements put in place by AGNSW.

Fraud reporting systems

AGNSW has an obligation to inform the police of any corrupt conduct which constitutes a serious indictable offence in circumstances where AGNSW knows or believes that the offence has been committed and knows or believes that it has information that might be of material assistance in securing the apprehension, prosecution or conviction of the offender.

The Director has a statutory obligation to report to ICAC any matter that the Director suspects, on reasonable grounds, concerns or may concern corrupt conduct (as defined in the ICAC Act – see Attachment A).

Where appropriate, AGNSW may also report fraudulent acts to the Crown Solicitors, the Director of Public Prosecutions, the Auditor-General and the Ombudsman.

It is therefore a requirement within AGNSW that all staff report instances of suspected or detected corrupt conduct immediately to the relevant Manager or the Director Anonymous reports will also be accepted.

If known, the report should include:

  • a complete description of the allegations;

  • the name and position of any public official/s alleged to be involved;

  • the name and role of any other person/s relevant to the matter;

  • the dates and/or the time-frames in which the alleged conduct occurred,

  • an indication as to whether the conduct appears to be a one-off event or

  • part of a wider pattern or scheme;

  • the date the allegation was made or the date on which the reporting officer became aware of the conduct;

  • what the agency has done about the suspected conduct, including notification to any other agency (police, Ombudsman);

  • what further action is proposed by the agency;

  • approximate amount of money, if any, involved;

  • any other indicators of seriousness; and

  • any other information deemed relevant to the matter.

Conduct and disciplinary standards

Corrupt conduct, in any of its forms, or the failure to report suspicion or detection of corrupt conduct, can undermine AGNSW’s compliance with its statutory obligations, reputation, operating efficiency, finances and service obligations. Therefore, AGNSW will not tolerate corrupt conduct in any of its forms and requires that, if it should it occur, it be detected, reported and dealt with expeditiously. Perpetrators of corrupt conduct will face disciplinary action, up to and including termination of employment, and may also face criminal prosecution. AGNSW is also committed to recovery action, including civil proceedings to recover the proceeds of fraud or corruption.

Any questions as to whether a particular action might constitute corrupt conduct or the reasonableness of grounds for suspecting corrupt conduct should be referred immediately to AGNSW’s Executive, Head of Human Resources or Head of Administration.

Further information

Fraud Control - Improvement Kit, Audit Office of NSW and Premier’s Department

Independent Commission Against Corruption

Good Conduct and Administrative Practice, NSW Ombudsman

Standards Australia Fraud and Corruption Control Standard AS8001-2008

Inquiries:

Chief Operating Officer

Tel 2 9225 1716

  

  • Attachment A

    Attachment A

    INDEPENDENT COMMISSION AGAINST CORRUPTION ACT 1988 NO. 35

    Section 7 Corrupt conduct

    (1) For the purposes of this Act, corrupt conduct is any conduct which falls within

     the description of corrupt conduct in section 8, but which is not excluded by section 9.

    (2) Conduct comprising a conspiracy or attempt to commit or engage in conduct

     that would be corrupt conduct under section 8 shall itself be

     regarded as corrupt conduct under section 8.

    (3) Conduct comprising such a conspiracy or attempt is not excluded by section

     9 if, had the conspiracy or attempt been brought to fruition in further conduct,

     the further conduct could constitute or involve an offence or grounds referred

     to in that section.

    Section 8 General nature of corrupt conduct

    (1)      Corrupt conduct is:

    (a)  any conduct of any person (whether or not a public official) that adversely affects, or that could adversely affect, either directly or indirectly, the honest or impartial exercise of official functions by any public official, any group or body of public officials or any public authority, or

    (b)  any conduct of a public official that constitutes or involves the dishonest or partial exercise of any of his or her official functions, or

    (c)  any conduct of a public official or former public official that constitutes or involves a breach of public trust, or

    (d)  any conduct of a public official or former public official that involves the misuse of information or material that he or she has acquired in the course of his or her official functions, whether or not for his or her benefit or for the benefit of any other person.

    (2)  Corrupt conduct is also any conduct of any person (whether or not a public official) that adversely affects, or that could adversely affect, either directly or indirectly, the exercise of official functions by any public official, any group or body of public officials or any public authority and which could involve any of the following matters:

    (a)  official misconduct (including breach of trust, fraud in office, nonfeasance, misfeasance, malfeasance, oppression, extortion or imposition);

    (b)  bribery;

    (c) blackmail;

    (d) obtaining or offering secret commissions;

    (e) fraud;

    (f) theft;

    (g) perverting the course of justice;

    (h) embezzlement;

    (i) election bribery;

    (j) election funding offences;

    (k) election fraud;

    (l) treating;

    (m) tax evasion;

    (n) revenue evasion;

    (o) currency violations;

    (p) illegal drug dealings;

    (q) illegal gambling;

    (r) obtaining financial benefit by vice engaged in by others;

    (s) bankruptcy and company violations;

    (t) harbouring criminals;

    (u) forgery;

    (v) treason or other offences against the Sovereign;

    (w) homicide or violence;

    (x) matters of the same or a similar nature to any listed above;

    (y) any conspiracy or attempt in relation to any of the above.

    (2A)  Corrupt conduct is also any conduct of any person (whether or not a public official) that impairs, or that could impair, public confidence in public administration and which could involve any of the following matters:

    (a)    collusive tendering,

    (b)    fraud in relation to applications for licences, permits or other authorities under legislation designed to protect health and safety or the environment or designed to facilitate the management and commercial exploitation of resources,

    (c)     dishonestly obtaining or assisting in obtaining, or dishonestly benefiting from, the payment or application of public funds for private advantage or the disposition of public assets for private advantage,

    (d)    defrauding the public revenue,

    (e)    fraudulently obtaining or retaining employment or appointment as a public official.

    (3)  Conduct may amount to corrupt conduct under subsection (1), (2) or (2A)  even though it occurred before the commencement of this subsection, and it does not matter that some or all of the effects or other ingredients necessary to establish such corrupt conduct occurred before that commencement and that any person or persons involved are no longer public officials.

    (4)  Conduct committed by or in relation to a person who was not or is not a public official may amount to corrupt conduct under this section with respect to the exercise of his or her official functions after becoming a public official. This subsection extends to a person seeking to become a public official even if the person fails to become a public official.

    (5)  Conduct may amount to corrupt conduct under this section even though it occurred outside the State or outside Australia, and matters listed in subsection (2) or (2A)  refer to:

    (a)  matters arising in the State or matters arising under the law of the State, or

    (b)  matters arising outside the State or outside Australia or matters arising under the law of the Commonwealth or under any other law.

     (6)  The specific mention of a kind of conduct in a provision of this section shall not be regarded as limiting the scope of any other provision of this section.

    Section 9 Limitation on nature of corrupt conduct

    (1)  Despite section 8, conduct does not amount to corrupt conduct unless it could constitute or involve:

    (a)  a criminal offence, or

    (b)  a disciplinary offence, or

    (c)  reasonable grounds for dismissing, dispensing with the services of or otherwise terminating the services of a public official, or

    (d)  in the case of conduct of a Minister of the Crown or a member of a House of Parliament – a substantial breach of an applicable code of conduct.

    (2)  It does not matter that proceedings or action for such an offence can no longer be brought or continued, or that action for such dismissal, dispensing or other termination can no longer be taken.(3)  For the purposes of this section:

    applicable code of conduct means, in relation to:

    (a)  a Minister of the Crown – a ministerial code of conduct prescribed or adopted for the purposes of this section by the regulations, or

    (b)  a member of the Legislative Council or of the Legislative Assembly (including a Minister of the Crown) – a code of conduct adopted for the purposes of this section by resolution of the House concerned.

    criminal offence means a criminal offence under the law of the State or under any other law relevant to the conduct in question.

    disciplinary offence includes any misconduct, irregularity, neglect of duty, breach of discipline or other matter that constitutes or may constitute grounds for disciplinary action under any law.

    (4)  Subject to subsection (5), conduct of a Minister of the Crown or a member of a House of Parliament which falls within the description of corrupt conduct in section 8 is not excluded by this section if it is conduct that would cause a reasonable person to believe that it would bring the integrity of the office concerned or of Parliament into serious disrepute.

     (5)  Without otherwise limiting the matters that it can under section 74A (1) include in a report under section 74, the Commission is not authorised to include a finding or opinion that a specified person has, by engaging in conduct of a kind referred to in subsection (4), engaged in corrupt conduct, unless the Commission is satisfied that the conduct could also constitute a breach of a law (apart from this Act) and the Commission identifies that law in the report.

     (6)  A reference to a disciplinary offence in this section and sections 74A and 74B includes a reference to a substantial breach of an applicable requirement of a code of conduct required to be complied with under section 440 (5) of the Local Government Act 1993, but does not include a reference to any other breach of such a requirement.

  • Attachment B

    Attachment B

     Examples of Corrupt Conduct:

    Cyber Fraud:

    The main areas of cyber fraud include:

    • Unauthorised alteration of input data

    • Misappropriation, destruction or suppression of output data

    • Alteration of digital records

    • Alteration or misuse of software programs

    • Unauthorised and/or deceptive transfers of funds

     Provision of false or incomplete information:

    Provision of submissions, briefs etc to Management, the Board, the Minister and to the public which are not objective, reflect personal agenda and are not in the best interests of the agency. Persons claiming to be someone else in order to obtain confidential information.

    Abuse of official position for public gain:

    Examples include acceptance of secret commissions, bribery, blackmail, improper use of confidential information, bias to suppliers or contractors or bias in staff promotions or appointments.

    Theft:

    The most common types of property stolen include consumables, supplies, computers, software, equipment, cash and intellectual property. Theft also includes the unauthorised use of resources such as corporate credit cards, motor vehicles, Cabcharge vouchers etc.

    Abuse of AGNSW resources:

    Reasonable and infrequent authorised personal use of AGNSW resources is permitted but it must not interfere with business operations or work responsibilities. AGNSW resources include motor vehicles, computers, photocopiers, telephones, facsimile machines, e-mail, Internet, administrative support and information.

    Unauthorised or inappropriate sales, tendering practices and write offs:

    Examples include selling information or services without authority, disposing of assets or inventory items for less than open market value or retail price, corrupt tendering practices and the unauthorised write-off of assets and bad debts.

    Forgery or falsification of records to originate or conceal fraud:

    Falsifying records and processing false statements is fraud. Examples include falsifying data or receipts, invoices, time-sheets, leave forms, or forging a signature on a purchase order or other document or forging certificates of competency or qualifications.