BUILDING CONFIDENCE IN OUR SYSTEMS AND CULTURE: INTEGRITY REFORM IN THE DEPARTMENT OF EDUCATION AND TRAINING - IBAC
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BUILDING CONFIDENCE
IN OUR SYSTEMS
AND CULTURE:
INTEGRITY REFORM
IN THE DEPARTMENT OF
EDUCATION AND TRAINING
Integrity Reform in Department of Education and Training
IBAC Recommendations
Recommendation 1
The Secretary of the Department to provide IBAC with
a detailed progress report by 30 December 2016 on the
implementation of its reform program to address the Executive p. 6
issues identified during Operation Ord and a final report Summary
demonstrating the effectiveness of these reforms by
30 September 2017. These reports will be published on
IBAC’s website.
Recommendation 2
The Secretary’s reports are to advise on actions to Section 1 Policy
strengthen integrity and corruption prevention across the 1. The integrity p. 13
Department (including schools) in relation to the following framework
issues, inter alia:
Section 3 People
Recommendation 2.A 5. A culture of
All employees’ understanding of and compliance with integrity and p. 33
public sector values and the code of conduct, and
departmental policies and procedures related to conflicts
respect
of interest, declarable associations, and gifts and benefits.
6. Ethical leadership p.37
Section 3 People
Recommendation 2.B 7. Staff support
Employment policies and practices, including pre- p. 41
employment vetting of prospective employees and regular
and development
revalidation for employees in identified positions, the
potential for rotation of employees in identified positions 6. Ethical leadership p.37
and executive roles, and any steps taken to improve
disciplinary and dismissal processes for employees found
Section 2 Process
to have engaged in serious misconduct or corruption p. 27
4. Improved controls
Recommendation 2.C
Financial management, procurement and contracting Section 2 Process p. 23
systems and controls, and associated employee training 3. Improved systems
and compliance measures
2Recommendation 2.D
School governance and financial management
arrangements, including the proposed new model to Section 2 Process p. 23
deliver ‘shared services’ to schools (i.e. any new approach 3. Improved systems
to program coordinator schools) and relevant policies,
procedures and other controls
Recommendation 2.E Section 2 Process
Audit and risk management programs to provide p. 27
4. Improved controls
assurance in areas of identified risk
Recommendation 2.F
Mechanisms to encourage and support employees to Section 3 People
speak up and report suspected misconduct or corruption, 7. Staff support and p. 41
and to ensure appropriate assessment, escalation and development
investigation of such matters
Recommendation 2.G
Leadership and management programs to ensure Section 3 People p. 37
executives are accountable for modelling integrity and 6. Ethical leadership
public sector values, and to set the right tone at the top.
Recommendation 3
The Department to undertake a review to identify and
audit any schools in addition to those identified by Section 2 Process p. 23
Operation Ord that may have been used inappropriately 3. Improved systems
as banker schools to expend funds on behalf of either
regional or central office.
Recommendation 4
The Department to take appropriate steps to exclude Section 2 Process
people and entities whose behaviour has been found p. 27
4. Improved controls
to be improper or corrupt from obtaining work with the
Department (including schools) in future.
3Integrity Reform in Department of Education and Training
Secretary’s foreword
I am proud to provide the Independent Broad-based Anti-corruption Commission (IBAC) with our first
report on the progress of the Department of Education and Training’s Integrity Reform Program.
This report confirms to IBAC and the community that the Department is delivering on its promise to
restore confidence in our public education system.
Corruption has absolutely no place in Victoria, and especially not in a system that is so important to
the lives of Victorians and, indeed, the future of this state.
We owe it to the thousands of children, young people and families we serve to make sure corruption
never returns to the Department. This report outlines in detail how we are making good on that
promise.
More than preventing corruption, we are delivering sweeping reforms to embed a healthy, high
performing and ethical culture in our corporate workplaces and schools.
We are doing so by focusing on four key areas:
• Setting the bar high for ethical leadership, starting at the top
• Establishing good governance over how we make decisions and oversee public money
• Designing smart systems and controls that increase accountability and are easy to use
• Strengthening our staff development and support to ensure our people make ethical decisions
and feel safe to raise concerns.
We have already achieved a great deal.
In establishing a new leadership charter and development program, we are holding our executives
to account for their decisions and conduct. We also supported the Government to introduce new
legislation to ensure we can remove staff employed under the Education and Training Reform Act
2006 more swiftly for misconduct whenever it occurs.
In abolishing the program coordination school model, we recalled vulnerable funds from so called
‘banker schools’ and designed a robust, new funding model to be piloted in 2017. We also overhauled
our school audit program, leading to improved assurance of school finances and greater financial
management support to schools.
In establishing a whistleblower service, we are supporting staff to speak up about suspected fraud
and corruption. We are supporting staff to talk about the public sector values and why they matter
across the employment lifecycle: from induction to team meetings and performance discussions.
4The Department has adopted the public sector values in the code of conduct for Victorian Public
Sector Employees. We have developed a suite of materials about the DET Values to use in offices and
schools, such as values-based conversation cards, web resources, and an eLearning module. We
start our Executive Board meetings, and other leadership meetings, with ‘integrity moments’ – where
we reflect on our most important value, integrity.
The recent People Matter Survey demonstrated our efforts are working in embedding the DET Values,
with 90 per cent of staff indicating awareness of the values, well above the public sector average.
We are only part way along our reform journey, with many significant projects on the horizon,
including our efforts to transform procurement processes and practices.
Moving into 2017, the Department will streamline activities to maximise the impact of key priorities
and to continue to build a strong narrative for reform. Coordinating a complex and multifaceted
program across an organisation as large and dispersed as the Department is a substantial
challenge, and we continue to work to deepen our engagement with regions and schools.
We are embedding systems and practices that support our staff with our primary goal: to lift
outcomes for Victorian children, young people and families.
Integrity reform is key to improving our public education system, and to do so, with the confidence of
the community we serve.
I look forward to updating you on our progress with the next report to IBAC in September 2017.
Gill Callister
Secretary
Department of Education and Training
5Integrity Reform in Department of Education and Training
Executive summary
Victorians rightly demand and expect a public education system in which they can take confidence
and pride. The Independent Broad-based Anti-corruption Commission’s (IBAC) Operation Ord
exposed the corruption of a small number of Department of Education and Training officials, who
used public funds to enrich themselves, and at the same time, undermine the system designed to
support the education of children and young people.
The Department responded quickly, by establishing a new integrity function and developing
and implementing changes to processes and structures necessary to foster integrity and resist
corruption. This report details the Department’s progress in reforming our culture and processes, to
foster an ethical environment in our corporate workplaces and schools.
The Integrity Framework fosters systemic change throughout our corporate offices and our schools,
establishing model behaviours and an ethical culture for our people, supported by clear and
transparent processes and systems.
We are moving from an ethically neutral to an ethically positive culture
The vast majority of our people do the right thing every day. We are creating an environment that
actively acknowledges this behaviour, maintains high expectations and explicitly promotes good,
ethical decision making in everything we do.
We are embodying our DET Values – responsiveness, integrity, impartiality, accountability, respect,
leadership and human rights – and ensuring they are explicit in discussions, actions, decision
making, relationship building and service delivery. We developed a suite of materials to use in offices
and schools, such as values-based conversation cards, web resources, an eLearning module and
‘Integrity moments’ in meetings.
We launched our Investing in Our People Strategy in December 2016, providing a framework for our
vision for our Victorian Public Service (VPS) staff. The strategy maps out our intentions and proposed
actions for recruitment, professional development, people management and cultural change. We will
assess the success of these measures via staff surveys.
Ethical leadership starts at the top
Our departmental leaders are the key to establishing an environment that encourages open,
transparent and ethical behaviour.
All senior leaders have committed to a leadership charter, which sets out our commitment to living
the values and modelling the behaviours the community rightly expects. The charter guides how
Department leaders work, make decisions, form relationships and bring out the best in staff. Drawing
on the binding Code of Conduct for Victorian Public Sector Employees, the charter encourages the
leadership capabilities Department leaders should strive to have, including leading with integrity.
These capabilities are reflected in executive performance development plans, position descriptions
and induction materials.
Further, the recently established Executive Officer Development Centre includes activities to assess
and develop each executive officer’s ability to lead with integrity.
Everyone can be an ‘ethical leader’, so we are supporting staff at all levels to lead ethically:
• We have Integrity Leadership Groups in each of our four regions and in central office that drive
the Integrity Reform Program from the ground up. These groups bring together people from
schools and offices who are acknowledged as ethical leaders. The groups meet regularly to
discuss and consult on changes and improvements being made by the Department, and act as
champions of integrity within their workplaces and networks.
• Each region also has an Integrity Liaison Officer, who coordinates the Integrity Leadership
Groups, contributes to the Integrity Reform Program and acts as a local point of integrity advice
for staff.
• We are developing and implementing career pathways for senior school staff and principals, to
foster healthy networks, retain good people and better connect schools and corporate offices. We
are also rolling out a program to rotate executives to increase knowledge sharing and prevent
unhealthy networks from forming.
6• Our Conflict of Interest (COI) framework gives employees practical information and advice on
ways to manage day-to-day COI situations, such as giving and receiving benefits, and employing
a family member.
• We developed an Ethical Decision Making Guide and model, which provides practical advice
about how to make good choices in ethically challenging situations. The model is embedded in
existing training programs for staff, and we are examining other ways to increase staff awareness
about the model and encourage them to use it.
• We are supporting our staff. We have included DET Values in position description documents
that describe each employee’s responsibilities, to ensure our people have the right skills, values,
qualifications and experience. Our induction program also includes a dedicated session on
Working with Integrity. Employees must include performance measures related to DET Values in
their performance development plans.
• We are developing a capability framework for business managers, which will include integrity
and ethical practice as part of agreed professional standards. We are also developing new
professional development courses for principals, business managers and school councils on legal,
financial, people and asset management.
We’re making it easier for staff to ‘Speak Up’
Staff concerned about behaviour or improper conduct need a safe and easy-to-use avenue to report
their concerns. They also must have confidence that they will be supported and that their concerns
will be taken seriously. We launched the Speak Up service in December 2015, so staff can report their
concerns confidentially and anonymously to an external provider.
We have also improved our complaints handling processes, to better assess and refer matters, and
ensure our approach embodies the principles of inclusion, respect, transparency and empathy.
We are developing strong, smart and intuitive systems
Good governance, transparent procurement systems and transparent funding arrangements create
an environment that encourages and allows our staff to operate efficiently and effectively, and
deliver the public education services Victorian deserve.
We have a number of initiatives to improve our systems, some still underway:
• A new operating model for the Financial Services Division (FSD) clarifies the finance functions, as
well as the roles and responsibilities for staff. The new model, which will be implemented in April
2017, includes compulsory training for financial delegates.
• Our new corporate procurement operating model, which is being developed, will make
procurement easier and more efficient for the Department’s business units, build capacity and
expertise in procurement, assure probity and deliver value for money. At the same time, our
staff will receive comprehensive guidance on the expected behavioural principles, attitudes and
purpose of robust procurement practices.
• Our new school procurement framework promotes consistent purchasing practices, minimises
probity risks and increases value for money. It includes improved systems and guidelines, training
and support programs, data analysis tools and reporting. It also streamlines processes and
reduces red tape, to make purchasing easier and clearer for principals and school business
managers. Implementation is expected to start in 2017, using a phased approach.
• We ceased the central and regional funded Program Coordinator Schools (PCS) ‘banker schools’,
and reconciled all PCS funds (valued at approximately $6 million).
• We developed new acquittal arrangements for the Student Resource Package (SRP). Most
funding for schools is received through the SRP, which derives a funding amount for each student
and school based on a range of evidence-based factors. Under the new acquittal arrangements,
principals must acquit expenditure and confirm it has been used for its intended use.
7Integrity Reform in Department of Education and Training
• We reviewed school funding governance, resulting in a new school ‘targeted’ funding model,
which will be piloted in 100 schools in 2017. Instead of receiving targeted funding in advance,
program areas will either pay for goods and services, or schools will apply to program areas for
reimbursement. The pilot schools will receive hands-on support from the Department as they
build a closer working relationship between the officers who administer the programs and the
school staff who deliver them.
• We are building the capability of school councils and strengthening school governance advice.
The Department’s school council training package Improving School Governance has reached
over 5,340 participants across nearly all Victorian government schools.
• We are reviewing travel, fleet and fuel card policies. We will release new policies in 2017, based on
Victorian Government directions and feedback from schools and corporate staff.
We are putting in place appropriate controls
As well as appropriate systems, we need appropriate controls, to ensure our people understand and
fulfil their obligations.
We developed a new Risk Management Framework, based on three lines of defence. The framework
clearly articulates the responsibilities of operational managers who own and manage risks (first
line) and clearly outlines the operational separation of risk (second line) and audit (third line).
Through increased training and leadership, we are also shifting the organisational risk culture from
administrative to strategic.
To enhance the third line of defence, we designed and completed a new, more rigorous school audit
program. We trialled the program on a representative sample of 269 schools, focusing on:
• locally raised funds
• cash, deposits, investments and banking activities
• expenses and accruals
• fixed assets
• local payroll
• school council governance.
The findings demonstrated an improved level of assurance across the Department. We will continue
to improve the program and make it more flexible.
Under new legislation, we can more quickly, effectively and confidently remove staff employed under
the Education and Training Reform Act 2006 for serious misconduct.
We are also reviewing our compliance obligations, covering applicable legislation, regulations,
standards, guidelines and policies. Based on this review, we will develop a new compliance
framework, which will form part of business as usual processes in 2018.
8Acronyms and abbreviations
Term Definition
BFMC Budget and Financial Management Committee
CAATs Computer-aided Audit Tools
COI Conflict of Interest
DET Department of Education and Training
EDRC Executive Development and Remuneration Committee
ERP Executive Rotation Program
ETRA Education and Training Reform Act 2006
ETRA Amendment Act Education and Training Reform Amendment (Miscellaneous) Act 2016
FSD Financial Services Division
GBH gifts, benefits and hospitality
IAD Integrity and Assurance Division
IBAC Independent Broad-based Anti-corruption Commission
IC Integrity Committee
IMTC Information Management and Technology Committee
Know what is expected, Educate and guide, Ensure we do the right thing,
KEEP
Protect our education system
PARC Portfolio Audit and Risk Committee
PCS Program Coordinator Schools
PD position description
PDP performance development plan
PEC Performance and Evaluation Committee
PIAP Portfolio Internal Audit Plan
PIC Policy and Implementation Committee
PPC Procurement and Probity Committee
RMF Risk Management Framework
SCFA School Council Financial Audit
SRP Student Resource Package
TSSP Technical Support to Schools Program
VAGO Victorian Auditor-General’s Office
VPS Victorian Public Service
VPSC Victorian Public Sector Commission
VSB Victorian Secretaries Board
WDCC Workforce Development Culture Committee
WoVG Whole of Victorian Government
9Integrity Reform in Department of Education and Training
Contents
SECTION 1: POLICY
1 Integrity Framework......................................................................................................................................................................................................13
A new Integrity Framework......................................................................................................................................................................................13
Integrity policy: setting expectations........................................................................................................................................................13
Reinforce regulatory accountabilities...............................................................................................................................................14
Clarify values-based expectations......................................................................................................................................................14
Guide integrity: develop ethical capability..........................................................................................................................................14
Monitor integrity: robust first and second lines of defence..................................................................................................15
Assure integrity: robust third line of defence.....................................................................................................................................15
Ensuring impact................................................................................................................................................................................................................16
Mitigate integrity risks ...........................................................................................................................................................................................16
Maturity assessment of Integrity Framework functions..........................................................................................................16
Enable continuous improvement.................................................................................................................................................................16
SECTION 2: PROCESS
2 Good governance............................................................................................................................................................................................................19
Corporate governance .............................................................................................................................................................................................19
Executive Board...........................................................................................................................................................................................................19
Committee model......................................................................................................................................................................................................20
Integrity Committee..........................................................................................................................................................................................20
Procurement and Probity Committee .............................................................................................................................................. 21
Portfolio Audit and Risk Committee ................................................................................................................................................... 21
School governance ...................................................................................................................................................................................................... 22
School councillor training ................................................................................................................................................................................ 22
Integrity and Assurance Division...................................................................................................................................................................... 22
3 Improved systems...........................................................................................................................................................................................................23
Proposed new operating model for the Financial Services Division................................................................................23
Procurement........................................................................................................................................................................................................................23
Corporate procurement .....................................................................................................................................................................................24
Procurement training .....................................................................................................................................................................................24
School procurement ..............................................................................................................................................................................................24
Funding systems..............................................................................................................................................................................................................24
Cessation of the Program Coordinator Schools model.......................................................................................................... 25
Program Coordinator Schools ................................................................................................................................................................ 25
Technical Support to Schools Program ......................................................................................................................................... 25
Review of additional schools used as banker schools ........................................................................................................... 25
New funding governance.................................................................................................................................................................................... 25
Acquittal of the Student Resource Package ....................................................................................................................................26
Travel, fleet and fuel cards.....................................................................................................................................................................................26
Travel.....................................................................................................................................................................................................................................26
Fleet and fuel cards.................................................................................................................................................................................................26
104 Improved controls........................................................................................................................................................................................................... 27
Risk............................................................................................................................................................................................................................................... 27
Risk management framework........................................................................................................................................................................ 27
Introducing three lines of defence for risk management .............................................................................................. 27
The model ................................................................................................................................................................................................................. 27
Creating the Strategy and Performance Group.....................................................................................................................28
Assessing risk culture .....................................................................................................................................................................................28
Audit............................................................................................................................................................................................................................................28
School audit ...................................................................................................................................................................................................................28
Internal audit plan ...................................................................................................................................................................................................29
Internal audit reporting ................................................................................................................................................................................29
Assurance data analytics ..........................................................................................................................................................................29
Financial services data analytics........................................................................................................................................................ 30
Compliance......................................................................................................................................................................................................................... 30
Changes to the legislative and regulatory framework........................................................................................................... 30
Preventing improper practices.......................................................................................................................................................................31
SECTION 3: PEOPLE
5 A culture of integrity and respect................................................................................................................................................................... 33
Investing in Our People ........................................................................................................................................................................................... 33
DET Values........................................................................................................................................................................................................................... 34
Integrity moments...............................................................................................................................................................................................35
Assessing cultural change................................................................................................................................................................................ 36
6 Ethical leadership...........................................................................................................................................................................................................37
Integrity Leadership Groups.................................................................................................................................................................................37
Integrity Liaison Officers.....................................................................................................................................................................................37
DET’s Leadership Charter and Capability Framework................................................................................................................38
Executive Officer Development Centre.................................................................................................................................................38
Career pathways and rotation program..............................................................................................................................................38
Managing conflicts of interest....................................................................................................................................................................... 39
Ethical decision making model.................................................................................................................................................................... 39
7 Staff support and development.........................................................................................................................................................................41
Staff support........................................................................................................................................................................................................................41
Mandatory notification..........................................................................................................................................................................................41
Speak Up............................................................................................................................................................................................................................42
Complaints management..................................................................................................................................................................................42
Staff development..........................................................................................................................................................................................................42
Position descriptions............................................................................................................................................................................................. 43
Recruitment.................................................................................................................................................................................................................... 43
Participating in selection panels.......................................................................................................................................................... 43
Induction........................................................................................................................................................................................................................... 43
Business manager capability framework .......................................................................................................................................... 43
Professional development for principals and business managers............................................................................. 44
Performance development plans............................................................................................................................................................... 44
Final report to IBAC in 2017.............................................................................................................................................................................................45
Appendix 1: List of governance committees.................................................................................................................................................. 46
11SECTION 1: POLICY
1
1 Integrity Framework
Through the Operation Ord hearings, the Independent Broad-based Anti-corruption Commission
(IBAC) confirmed the Department needed to:
• strengthen our integrity and corruption prevention
• cultivate a culture of integrity underpinned by clear accountabilities and behavioural expectations
• assure that employees understand and comply with integrity policies and risk controls.
Achieving cultural change and meeting our integrity reform objectives comes through actions that
promote ethical leadership and behaviours, and strong systems to enable and support integrity.
A new Integrity Framework
The Department’s Integrity Framework will provide a conceptual foundation to develop and sustain
mature integrity systems. It will leverage the work and tone of the Integrity Reform Program, while also
providing a basis for business as usual integrity management. Specifically, the framework provides
the Department’s ethics infrastructure: the instruments, processes and structures we engage to
foster integrity and resist corruption.
The Integrity Framework facilitates integrity actions that are:
• targeted to integrity risks
• effectively implemented and sustained
• monitored to inform continuous improvement
• experienced by staff as cohesive, informed and effective.
The Integrity Framework embodies three principles (values, ethical leadership, and compliance and
assurance) and four ‘KEEP’ actions:
• Know what is expected
• Educate and guide
• Ensure we do the right thing
• Protect our education system.
The Integrity Framework has four core functions that reflect the four ‘KEEP’ actions: policy, guidance,
monitoring and assurance.
Integrity policy: setting expectations
Integrity policies are an important integrity risk control for the second line of defence. They establish
the control environment: regulatory accountabilities, values-based behavioural expectations, and
integrity risks in context. The three lines of defence risk management model is discussed in chapter 4,
Improved controls. Policies that are core to the Integrity Framework have:
• regulatory minimum requirements to prevent fraud and corruption
• values-based expectations set out in the codes of conduct
• a role in addressing significant organisational integrity risks that require proportionate controls.
Based on these criteria, our core integrity policies are:
• fraud and corruption control
• Speak Up and protected disclosures
• Conflict of Interest (COI), including declarations of private interests and related aspects of
recruitment and selection, and secondary employment
• gifts, benefits and hospitality (GBH)
• sponsorship
• probity in procurement.
13Integrity Reform in Department of Education and Training
We also identified other complementary integrity policies that have significant integrity touch points:
procurement, complaints management, grants management, travel policy, motor vehicles and fleet,
and financial risk management.
We are taking a coordinated approach to systematically reviewing and refreshing our core and
complementary integrity policies, to clarify regulatory accountabilities, values-based expectations,
and integrity risks in context.
Reinforce regulatory accountabilities
Our review of core integrity policies depends on and is informed by the evolving minimum
accountabilities within Whole of Victorian Government (WoVG) policies and frameworks, including:
• COI and GBH – Under direction from the Victorian Secretaries Board (VSB), the Victorian Public
Sector Commission (VPSC) reissued these WoVG policy frameworks in late 2016.
• sponsorship – The Department of Premier and Cabinet is expected to reissue the WoVG
sponsorship policy shortly.
• probity in procurement – The Department of Treasury and Finance is expected to release a new
Supplier Code of Conduct shortly.
The Department will adopt revised WoVG policy and tool templates (e.g. declaration forms) to ensure
that refreshed internal policies align with the spirit and letter of evolving WoVG integrity directions.
COI are discussed further in chapter 6, Ethical leadership.
Clarify values-based expectations
We are hardwiring values-based expectations within our integrity policies, procedures and guidance
materials. The DET Values are central to the Integrity Framework, reinforcing the Victorian Public
Service (VPS) values and the Code of Conduct for Victorian Public Sector Employees. The DET Values
are: responsiveness, integrity, impartiality, accountability, respect, leadership and human rights.
Integrity policy reviews support our staff to apply the DET Values through:
• universal behavioural expectations across corporate and schools – which require all staff to
demonstrate the DET Values in their leadership, decisions and actions
• reflecting DET integrity risks – which include controls for risk-sensitive roles and functions, and for
external stakeholders where relevant
• best practice guidelines tailored to the educational context and ethical dilemmas in practice –
which are informed by risk mapping and stakeholder feedback.
Guide integrity: develop ethical capability
Statements of rules and values are necessary, but they are not enough to ensure ethical capability.
As an organisation, we must guide our staff on appropriate behaviour via many channels, including
example-setting by management, education and training to develop ethical competence, advice and
counselling, and communications.
We started the following projects under our Integrity Reform Program throughout 2016:
• implementing a Leadership Charter
• developing a Leadership Capability Framework
• establishing an Executive Officer Development Centre
• delivering integrity training
• promulgating an ethical decision making model.
These projects are discussed further in chapter 6, Ethical leadership.
141
Monitor integrity: robust first and second lines of defence
Monitoring integrity compliance and performance ensures we are answerable for our decisions and
actions as individuals, and as a Department overall. The Department maintains integrity risk and
compliance management programs to help build and monitor management controls, to ensure they
are properly designed, in place, and mitigate risk as intended. Passive monitoring occurs through,
for example, Speak Up processes (our fraud and corruption reporting service for staff), culture
surveys, and analysis of public complaints. Active monitoring occurs through early warning systems,
noncompliance monitoring and mapping, and integrity risk reporting and management.
Within the core integrity policies, first line of defence occurs primarily through declaration and
delegate oversight. Second line of defence occurs primarily through oversight of declaration registers
and risk-based reporting to senior management and committees.
WoVG declaration and register processes are either mandated or recommended for COI, GBH,
sponsorship, private interests, and secondary employment. Key themes of recent WoVG integrity
directions include a requirement for evidence of regulatory compliance, and risk-based monitoring
and reporting. The Department is adopting the recently revised WoVG template declaration and
register tools, via our review of integrity policies.
Departmental integrity actions in progress that strengthen our integrity performance monitoring
include:
• establishing our Integrity and Assurance Division (IAD), including a Fraud and Corruption Control
function and a Performance and Coordination function
• implementing a new Speak Up framework and supporting processes
• developing an IAD data analytics strategy and reporting framework
• strengthening and enhancing our complaints management process
• establishing a compliance function and supporting processes
• developing and implementing a three lines of defence risk management model
• strengthening the second line of defence function within the Financial Services Division.
These initiatives are discussed in chapter 4, Improved controls.
The IAD is also developing an overarching integrity performance reporting framework, so the
Department’s Executive Board can actively monitor and oversee integrity performance and
compliance with integrity policies and systems. Integrity performance reporting is an important part
of continuous improvement.
Assure integrity: robust third line of defence
Protecting our assets and enforcing integrity assures our stakeholders that we will identify and
address misconduct with appropriate consequences. Effective governance, independent audit and
external scrutiny are important, as is a timely, fair and consistent system of consequences.
Our third line of defence is supported by clear governance arrangements, risk-based reporting
protocols, and a well-targeted audit program that confirms the effectiveness of secondary lines
of defence. Several Integrity Reform Program projects that focus on strengthening governance
arrangements are discussed in chapter 2, Good governance.
A well-targeted internal audit program supports integrity reform and strengthens control
environments for areas of weakness identified by Operation Ord. In response to Operation Ord, the
Department committed to reviewing processes for managing and detecting conflicts of interest. We
will acquit this commitment via an internal audit planned for 2017-18. This internal audit plan and
audit reporting is discussed further in chapter 4, Improved controls.
The Department has been swift in supporting the Government to deliver new legislation to more
quickly, effectively and confidently remove staff for serious misconduct (discussed further in
chapter 4, Improved controls).
15Integrity Reform in Department of Education and Training
Ensuring impact
Translating integrity objectives into business as usual is a complex, multi-faceted task. To be
effective, our approach to ensuring integrity must target serious integrity risks, address identified
cultural and systemic weaknesses and vulnerabilities, and enable continuous improvement and
organisational learning.
Mitigate integrity risks
To be effective, our Integrity Framework must be specific to our assets, risks and contexts. The
Department identified the following integrity risks:
• fraud and corruption
• financial mismanagement
• lack of probity in procurement
• information mismanagement
• poor integrity culture
• improper selection and recruitment
• grooming by organised crime.
These integrity risks can now be selected within the Department’s operational risk register and IAD’s
risk register. Selecting and mitigating these risks within cyclic Department-wide business planning
fosters first line of defence controls and accountabilities. Second line risk reporting by the Risk and
Decision Branch to the IAD will inform second line of defence oversight and risk-mitigation integrity
actions where required. We will report integrity risks against in the Department’s impending integrity
performance reporting framework (discussed further below).
Maturity assessment of Integrity Framework functions
As discussed above, the Integrity Framework functions align with the KEEP actions: policy, guidance,
monitoring and assurance. A working group established in August 2016 is responsible for progressing
implementation of the Integrity Framework. The working group developed a protocol to assess
the maturity of the Integrity Framework functions and policies. The protocol offers a point-in-
time assessment; the first maturity assessment provides an integrity performance baseline, with
subsequent assessments examining the maturation of policy, systems and framework functions. We
will use recommendations from completed assessments to consolidate our integrity policy systems,
including education, communications and second line of defence monitoring.
Enable continuous improvement
Integrity assessment, monitoring and evaluation are central functions of the Integrity Framework.
They are managed in a recurring cycle of planning, implementing, monitoring and adapting integrity
actions and systems, as illustrated in Figure 1.
161
Figure 1: Integrity Framework — strategy for continuous improvement
PLAN IMPLEMENT MONITOR IMPROVE
Integrity strategy Independent
(3 year plan) evaluation
Implement
Internal integrity
planned and Continuous
Annual strategy performance
arising integrity improvement
report
actions
Implementation
Work plans
and impact
The integrity reform program includes several deliverables related to improved monitoring and
reporting on integrity, fraud and corruption, including an overarching integrity performance
reporting framework. The reporting framework is in conceptual stages, and should be finalised by
mid 2017.
Integrity reporting establishes a process for continuously benchmarking ethical standards, to identify
improvements in organisational ethical standards over time, and the impacts and strengths of the
Department’s integrity systems.
17SECTION 2: PROCESS
2
2 Good governance
Good public sector governance is:
…the set of responsibilities and practices, policies and procedures, exercised by an agency’s
executive to provide strategic direction, ensure objectives are achieved, manage risks and use
resources responsibly and with accountability.1
In line with the Department’s commitments in response to IBAC’s Operation Ord report, we introduced
several initiatives to support good governance, including:
• a new corporate governance model, including new governance committees and associated
processes
• strengthened school governance arrangements
• an updated training package for school councillors
• a new division within the Department, the Integrity and Assurance Division (IAD), to manage and
deliver integrity actions cohesively.
Corporate governance
Operation Ord identified weak program governance largely caused the vulnerability of the Program
Coordination Schools funding model. Following this finding, the Secretary committed to improving
the overall quality and accountability of corporate decision making and oversight centrally, including
reviewing key corporate committees and high risk processes and functions (Secretary’s Legal
Statement to IBAC, paras 324–27).
The Department identified some opportunities for improving its governance structures, particularly
relating to clarifying decision making authority and remits, mapping the relationships between
committees, and strengthening accountability for actions. We then sought to identify and deliver a
range of targeted interventions.
In late 2015, the Department’s Executive Board approved the new governance committee structures
(figure 2) and committed to implementing significant changes to committee processes. These
changes aim to bring stronger leadership, more efficient and effective decision making and greater
accountability and transparency to the Department’s governance processes.
All corporate governance initiatives have now been implemented, with some work occurring in 2017 to
embed and use governance tools and processes maturely.
Executive Board
The Executive Board provides stewardship for the Department and whole-of-organisation advice
to the Secretary and Ministers as ultimate decision makers. The Board assists the Secretary with
strategic leadership of the organisation, its agencies and the Department’s portfolios, including
vision, purpose, strategic direction and objectives. As part of the broader corporate governance
reforms, the terms of reference for the Executive Board were revised to include clearly articulated
departmental oversight and management accountabilities and greater engagement with committee
operations via regular formal reporting from its supporting committees.
1 This definition was reiterated in the Australian Public Service Commission’s 2007 Building better governance report, and was
originally from ANAO and Department of the Prime Minister and Cabinet 2006, Implementation of programme and policy initiatives:
making implementation matter, Better practice guide, Commonwealth of Australia, Canberra, p. 13.
19Integrity Reform in Department of Education and Training
Figure 2: New executive committee structure
Education
Secretary Executive Board State Board
(time limited)
Budget and Financial Policy and
Integrity Committee Management Implementation
Committee Committee
Information
Portfolio Audit and Performance and
Management and
Risk Committee Evaluation Committee
Technology Committee
Executive Development Workforce
Procurement and
and Remuneration Development and
Probity Committee
Committee Culture Committee
Committee model
We developed and implemented an improved committee model to support the Executive Board. The
model includes:
• clear accountabilities – with all terms of references revised to clearly articulate each committee’s
remit and accountability
• greater decision making authority – with committees expected to act as decision making
delegates of the Executive Board rather than advisory bodies, with clear parameters about what
is referred to the Board for approval and what can be approved by a committee
• an annual work plan – to ensure each committee maintains their strategic focus
• regional representation on committees – to ensure all areas of the Department are represented
and to improve links between service delivery and policy
• an online centralised governance portal – which is a repository of information on governance
issues, and which also functions as an online committee paper access system
• review and development of committee performance – including KPIs and assessment of individual
member contributions
• cross committee communication – which is a formalised processes to eliminate silos, by ensuring
information exchange is transparent and collaborative
• an ability to co-opt specialist advice – to ensure the Department draws on the best available
expertise and to build and maintain understanding of market leading practice and knowledge.
Integrity Committee
The new Integrity Committee oversees the Integrity Reform Program developed in response to IBAC’s
Operation Ord report. The committee is chaired by the Secretary and includes four other members
of the Executive Board, plus two independent members with expertise in integrity matters. The
committee’s mandate includes:
• guiding expectations under the VPS Code of Conduct, corporate policies, and relevant legislation
governing integrity and ethics
• monitoring, performance, and inter-relationship between the Department’s integrity and
corruption prevention functions, including protected disclosures, employee conduct and ethics,
audit, legal services, IBAC, fraud and special investigations
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