Operation Warburton was an investigation into allegations of the misappropriation of government funds for personal benefit by employees of a regulatory body, and an inappropriate relationship with an associated union.
IBAC received a complaint alleging employees of the regulatory body misappropriated government funds for their own benefit, and that of an associated union to which they had personal ties. It was alleged a beachside property owned by a union member, was rented by the regulatory body to house disadvantaged apprentices but was instead used as a holiday house by a trade union secretary. Similarly, a Melbourne property rented for apprentices to live in was used for other purposes. The complainant also alleged the employees pushed for the regulatory body to pay more than $100,000 to support a union initiative because, 'It’s what we do to keep the unions happy'.
Due to a complete absence of formal paperwork and controls, the IBAC investigation could not substantiate that the properties in question had been used for personal or other interests. There was no record to substantiate rental arrangements for the properties, and invoices signed by the regulatory body lacked the most basic of details, such as the address of specific rental properties. Additionally, there were no controls in place to ensure the state government funding package was spent as intended to support apprentices – as the money was deposited into the regulatory body's main bank account used for day-to-day expenses. Nor did the regulatory body have any arrangement to review or audit the administration of the apprentice support program, and no enquiries were made to confirm the properties were being used as intended.
The investigation found the arrangement between the regulatory body and union ran for nine years and involved four separate rental properties without any formal written arrangements, administration or audit. A total of $355,000 was paid to this program.
While not constituting corrupt conduct, IBAC found there had been a breach of duty in allowing two senior employees to operate as trustees two years after their tenure expired, and that the pair breached their duty as trustees in supporting a union initiative, which they were personally involved in, and not declaring a conflict of interest. IBAC made recommendations to the regulatory body to improve their processes around accounting and record-keeping, and declaring and managing conflicts of interest. The recommendations have been accepted and acted upon.