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CORRUPTION AND CRIME COMMISSION OF WESTERN AUSTRALIA

ANNUAL REPORT

2005-2006

Publication number

ISSN: 1 832-971 3

O 2006 Copyright in this work is held by the Corruption and Crime Commission. Division 3 of the Copyright Act 1968 (Cth) recognises that limited further use of this material can occur for the purposes of 'fair dealing'; for example, study, research or criticism, etc. Should you wish to make use of this material other than as permitted by the Copyright Act 1968, please write to the postal address below.

This report and further information about the Corruption and Crime Commission can be found on the Commission's website at www.ccc,wa,gov,au

Corruption and Crime Commission

Postal Address PO Box 7667 Cloisters Square PERTH WA 6850

Telephone

Facsimile Email

(08) 921 5 4888 1800 809 000 (toll free for callers outside Perth) (08) 92 1 5 4884

Office Hours 8.30 am to 5.00 pm, Monday to Friday

Corruption and Crime Commission Annual Report 2005-2006


The Hon. Nicholas Griffiths MLC President Legislative Council Parliament House PERTH WA 6000

The Hon. Fred Riebeling MLA Speaker

Legislative Assembly Parliament House PERTH WA 6000

Dear Mr President Dear Mr Speaker

I am pleased to provide this Annual Report of the Corruption and Crime Commission for the financial year ended 30 June 2006 to each of you for presentation to Parliament.

The report has been prepared in accordance with section 66 of the Financial Administration and Audit Act 1985, and with section 91 of the Corruption and Crime Commission Act 2003.

- COMMISSIONER

27 September 2006

PO Box 7667 Cloisters Square, S t George's Terrace PERTH WA 6850 Ground Floor, 186 S t George's Terrace PERTH 6000 Telephone: 08 921 54888 Facsimile: 08 921 54884

Email: in~f~~&ccc.s%ra.$o~i.~u Website: www,ccc.wa,gnv,al.a

CONTENTS

COMMISSIONER'S FOREWORD ........................................................................ I THE YEAR IN BRIEF .................................................................................................. 5

Misconduct Function ................................................................................................ 5 Prevention and Education Function ......................................................................... 5 Organised Crime Function ....................................................................................... 6 Supporting the Commission ..................................................... ... Reports Tabled in the Parliament ............................................................................ 7 Required Reporting ................................................................................................. 7

THE CORRUPTION AND CRIME COMMISSION ............................................ 8 Our Vision ............................................................................................................... - 8 Our Mission ............................................................................................................. 8 Our Challenges ........................................................................................................ 8

FUNCTIONS AND GOVERNANCE ................... .................................................... . 8 Functions ................................................................................................................. 9 Governance - External ............................................................................................ 9

Joint Standing Committee on the Corruption and Crime Commission ............... 10 Office of the Parliamentary Inspector ................................................................. 11 Parliamentary Inspector and the Commission .................................................... 12 Attorney General ................................................................................................ 13 Role of the Judiciary in Issuing Warrants ........................................................... 13 Ombudsman ...................................................................................................... 14 Auditor General .................................................................................................. 14 Freedom of Information ...................................................................................... 14 Compliance with Legislation ............................................................................... 14 Strategic Planning: Outcome Based Management ........................................ 15

Governance - Internal ........................................................................................... 16 Structure ............................................................................................................ 16 The Office of Commissioner ............................................................................... 17 The Office of Acting Commissioner .................................................................... 18 Internal Governance - Committees ................................................................... 20

Changes to Corporate Structure ............................................................................ 21 Operations Directorate ....................................................................................... 21 Corruption Prevention Education and Research Directorate ............................. 21 Legal Services Directorate ................................................................................. 21

THE MISCONDUCT FUNCTION .............................................................................. 22 Misconduct Defined ............................................................................................... 23 How the Commission deals with misconduct ......................................................... 23 Allegations and Notifications .................................................................................. 25 Statistics about Assessments ................................................................................ 29

Western Australia Police . Reviewable Police Action ......................................... 30 Other Agencies .................................................................................................. 31

Categories of Complaints ...................................................................................... 32 Monitoring Agency Misconduct Investigations ....................................................... 33 Reviewing Agency Misconduct Investigations ....................................................... 34 Handling of Matters Assessed. Monitored and Reviewed ..................................... 36 Programme of Agency Complaint Handling Reviews ............................................ 36 Serious Misconduct Investigations Conducted by the Commission ....................... 37 Integrity Testing Programmes ................................................................................ 39


Private and Public Examinations (Hearings) .......................................................... 40 ............................................................................................................ Intelligence 40

Information Furnished to Independent Authorities ................................................. 41 ........................................................................ Strategic Partnerships and Liaison 42

Assistance to Other Agencies ................................................................................ 43 THE PREVENTION AND EDUCATION FUNCTION ................................................ 44

Overview of Activities ............................................................................................ 45 ............................................................................................... Education Activities 45

....................................................................................... Ministerial Staff Briefings 46 ........................................................................................... Inquiries and Reviews 46

Protecting Personal Data in the Public Sector ................................................... 46 Western Australia Police Property Management ................................................ 46 Government Employees Housing Authority ....................................................... 47

............................................................................................................... Oversight 47 Western Australia Police Reform ....................................................................... 47

........................................................................ Commission Recommendations 47 ................................................................................................. Research Projects 48

Surveying the Public Sector ............................................................................... 48 Partnership in National Whistleblower Research ............................................... 48

Provision of Corruption Prevention Consultancy ................................................... 49 .......................................................................... The Integrity Coordinating Group 49

................................................................................... Anti-Corruption Conference 49 .................................................................................................................. Reports 50

THE ORGANISED CRIME FUNCTION ................................................................ 51 Exceptional Powers ............................................................................................... 51 Fortification Removal Notices ................................................................................ 51 Organised Crime - Emerging Issues ..................................................................... 52

SUPPORTING THE COMMISSION .......................................................................... 53 Legal Services Directorate ..................................................................................... 53

Recommendations for Changes to the Law ....................................................... 53 ............................................................................... Business Services Directorate 55

Information Technology and Communications ................................................... 55 ..................................................................... Commission Industrial Agreement 55

................................................................................................. Accommodation 56 Media Liaison ........................................................................................................ 56

OUR PEOPLE .................................................................................................... 5 6 ................................................................................................... Employee Profile 57

Employee Welfare ................................................................................................. 58 Occupational Safety and Health ............................................................................ 58 Workers' Compensation ........................................................................................ 59

COMPLIANCE STATEMENTS ................................................................................. 59 Goal 1 : People and Communities .......................................................................... 59

Disability Access and Inclusion Plan Outcomes ................................................. 59 Cultural Diversity and Language Services Outcomes ........................................ 59 Youth Outcomes ................................................................................................ 60

Goal 2: The Economy ............................................................................................ 60 Goal 3: The Environment ....................................................................................... 60

Waste Paper Recycling ...................................................................................... 60 Energy Smart Government Policy ...................................................................... 61

Goal 4: The Regions .............................................................................................. 61


Regional Development Policy ............................................................................ 61 Goal 5: Governance .............................................................................................. 62

........................................................................................................ Evaluations 62 Information Statement ........................................................................................ 62

......................................................................................... Recordkeeping Plans 62 ......................................................................................................... Advertising 62

...................................................................................................... Sustainability 63 Equal Employment Opportunity Outcomes ........................................................ 64 Public Sector Standards and Ethical Codes ....................................................... 64 Corruption Prevention ........................................................................................ 66 Public Interest Disclosures ................................................................................. 66

PERFORMANCE ASSESSMENT ....................... ... ..... ......... ............. . . . ......... 67 Measuring Our Performance ................................................................................. 67 Outcome Based Management ............................................................................... 68

Effectiveness Indicators ..................................................................................... 69 Efficiency Indicators ........................................................................................... 73

AUDITOR GENERAL'S OPINION ............................................................................ 79 CERTIFICATION OF PERFORMANCE INDICATORS ........................................... 81 CERTIFICATION OF FINANCIAL STATEMENTS ................................................... 83 FINANCIAL STATEMENTS ..................................................................................... 85


TABLES and CHARTS

Table 1 : Number and Source of Notifications ............................................................ 22 .................................................. Table 2: Key Misconduct Function-Related Activity 22

Table 3: Allegation Assessment Referrals ................................................................ 27 Table 4: Distribution of Matters by Agency Sector .................................................... 29 Table 5: Complaint Categories and Numbers of Matters .......................................... 32 Chart 6: Moving Average of Matters Received and Closed ....................................... 33 Table 7: Matter Handling Comparison ....................................................................... 36 Table 8: Serious Misconduct Investigation Use of Statutory Powers ........................ 38 Table 9: Examinations (Hearings) ............................................................................. 40 Table 10: Key Corruption Prevention and Education-Related Activities .................... 44 Table 11 : Organised Crime Exceptional Powers ....................................................... 51 Table 12: Employee Profile - Long- and Short-term Staff Positions ......................... 57 Table 13: Distribution of Positions by Level and Gender ........................................... 57

...................................................... Table 14: Advertising and Sponsorship Costs 6 3 ..................................................................... Table 15: Recruitment and Advertising 63

Table 16: Effectiveness Indictors: Service One ......................................................... 69 ....................................................... Table 17: Effectiveness Indicators: Service Two 69

.................................................... Table 18: Effectiveness Indicators: Service Three 72 ............................................................. Table 19: Efficiency Indicators: Service One 73

Table 20: Efficiency Indicators: Service Two ............................................................. 75 .......................................................... Table 21 : Efficiency Indicators: Service Three 76

FIGURES and CASE STUDIES

............................. Figure 1 : External scrutiny and governance of the Commission 10 Figure 2: Commission's Structure ............................................................................. 16 Figure 3: The Misconduct Function Flowchart .......................................................... 24 Case Study One: Example of an Assessment .......................................................... 26 Case Study Two: Example of an Assessment .......................................................... 28 Case Study Three: Example of an Assessment ........................................................ 29 Case Study Four: Example of a Review .................................................................... 35 Case Study Five: Example of a Matter Progressing to Investigation ......................... 37 Case Study Six: Example of a Matter Progressing to Joint Investigation .................. 41



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COMMISSIONER’S FOREWORD

This, the third Annual Report of the Corruption and Crime Commission, highlights the Commission’s activities and achievements in the performance of its functions during the 2005-2006 financial year. This report marks the completion of the Commission’s first 30 months of operation, during which it has established itself as an effective instrument for reducing the incidence of misconduct within the Western Australian public sector.

The reporting year was one of continued consolidation, with the Commission’s staff stabilising and its operational and administrative processes becoming well-established. In a range of activities the Commission made use of most of the considerable powers available to it under the Corruption and Crime Commission Act 2003 (the Act), the Commission’s controlling legislation.

In effecting the Commission’s misconduct function, it received and assessed over 2,300 allegations and notifications of misconduct, monitored almost 1,900 misconduct investigations undertaken by public sector agencies, and reviewed over 2,000 public sector agency completed misconduct investigations. This range of activity represented a 33 percent increase over that of the 2004-2005 financial year.

As a part of its corruption prevention and education function, the Commission delivered 96 seminars to 2,680 attendees, including a variety of public sector agency staff across the state, and tabled five major reports in the Parliament.

In respect to its organised crime function, the Commission retains serious concerns about the effectiveness of this aspect of its legislation. The Commission’s organised crime exceptional powers remained untapped, and therefore were ineffective during the reporting period, as the Western Australia Commissioner of Police made no applications for their use. The Commission has previously reported, both to its Joint Standing Committee and in its last Annual Report, its opinion that the expressed intent of the Parliament with regard to its organised crime function, established as the first of the Commission’s two main purposes under section 7A of the Act, cannot be achieved under the current legislative arrangements.

During 2005-2006, amendments to the Act were, and continue to be, a subject of keen interest to the Commission. The Attorney General undertook a Review of the Administration of Justice Legislation, which included the Act, and resulted in a submission that is currently being considered by the Cabinet. The Joint Standing Committee on the Corruption and Crime Commission commenced its own independent review of some aspects of the Act. The Commission made submissions to both reviews, including recommendations for legislative amendments in areas of its organised crime function, and seeking clarification and enhancement of its contempt powers under the Act. The Commission awaits the tabling of the report resulting from the Joint Standing Committee’s review which will address, among other matters, these two critical issues.

The year ahead will include a significant milestone for the Commission in the form of a statutory review of the Act. Section 226 of the Act requires that a review of the operation and effectiveness of the legislation occurs in 2007, three years after its commencement. This review is to have regard to a range of specific matters in addition to any that may be determined by the Attorney General and provides an opportunity for the relevance and appropriateness of the legislation to be assessed, based upon the operational experience of the first three years of its application. The results of both the Joint Standing Committee's review and Attorney General's Review of the Administration of Justice Legislation will contribute towards the completion of the statutory review. However, the Commission notes that even in the relatively short time since it made submissions to the above reviews, its position on a number of issues has continued to evolve.

The Commission was well-resourced during the 2005-2006 reporting period and operated well within its budget. The Commission anticipates an overspend in its 2006-2007 budget due to the requirement to engage external counsel for a number of significant, complex and high profile matters that are expected to occupy the Commission for a protracted period. These matters include an inquiry into whether any public officer has engaged in misconduct in relation to the investigation, prosecution, appeals and subsequent imprisonment of Mr Andrew Mallard in connection with the murder of Mrs Pamela Lawrence in 1993. It is anticipated that these inquiries will involve public hearings as part of the investigative process. However, a timeline for the Mallard inquiry cannot currently be determined, as the Commission awaits the outcome of the Western Australia Police's cold case review, which will serve as a foundation document for the Commission's own inquiry.

The Act provides for the role of Acting Commissioner to ensure the continued effectiveness of the Commission during periods when the Commission is unable to fulfil the functions of Commissioner due to absence, an inability to act or my declaration of a perceived or actual conflict of interest.

Until 16 August 2005, Ms Moira Rayner was the Commission's sole Acting Commissioner. Ms Rayner resigned following allegations that she had breached the CCC Act. Once aware of the allegations, the Commission immediately informed its Parliamentary Inspector. As a consequence of subsequent investigations by Western Australia Police, Ms Rayner was charged and her trial is pending.

Mr Christopher Shanahan SC currently performs the function of Acting Commissioner. The appointment of an additional Acting Commissioner, an activity for which the responsibility lies externally to the Commission and for which an advertisement for expressions of interest closed in April, remains a pressing matter for both Mr Shanahan and me. Through our increasing experience in the application of the legislation we both identify the importance of an alternative Acting Commissioner as increasingly significant to the Commission.

Interstate experience shows the difficulty in identifying appropriately qualified persons prepared to accept the appointment as the head of anti-corruption agencies. This is due primarily to the attendant controversies attached to the activities of standing inquisitorial bodies. The Act's requirement is that the recommendation of persons to perform the roles of Commissioner and Acting Commissioner occurs through the


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provision of the names of three eligible persons who are qualified for appointment. Although this appears an admirable process, there are many appropriately qualified persons who will not readily accept their involvement in a formal nomination process, to which they are proactively required to nominate into a pool of nominees. This is an issue that requires contemplation during the legislative reviews.

The Act specifies several non-delegable powers performed by the Commissioner. As the workload of the Commission has increased in both volume and complexity, it has become apparent that the Commissioner requires the capacity to delegate the power to conduct examinations on oath. Such a delegation would enable the Commission to deal with a number of matters concurrently. The Independent Commission Against Corruption, in New South Wales, applies this approach very successfully. I have recommended to the Attorney General that the Act be modified accordingly.

In summary, I believe that the Commission is continuing to deliver very effective results and is achieving the intention of Parliament with regard to addressing misconduct in the public sector. Unfortunately, the same cannot be said in the area of organised crime and this remains a matter for the Parliament to consider.


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THE YEAR IN BRIEF

Misconduct Function Received and assessed 2,361 allegations and notifications of misconduct (22% of allegations were substantiated).

0 Monitored 1,884 misconduct investigations undertaken by public sector agencies.

Reviewed 2,083 public sector agencies' completed misconduct investigations.

Conducted three joint agency investigations.

Approved 442 applications for the use of the Commission's statutory powers under the Corruption and Crime Commission Act 2003 (the Act).

Charged 12 people with 147 criminal offences, additionally 10 persons were convicted on Commission investigation-related charges.

Prevention and Education Function Delivered 96 seminars to 2,680 attendees, including a variety of public sector agency staff across the state.

Undertook four major inquiries and one major review resulting in reports tabled in Parliament and internally in support of Commission investigations into serious misconduct.

Produced four major and two minor education materials.

Continued research as part of the 'Profiling the Public Sector' project.

Continued as a partner investigator in the 'Whistling While They Work' national linkage project researching the development of strategies for early detection of workplace misbehaviour and to reduce the costs associated with whistle blowing.


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Organised Crime Function The Commission's organised crime function is dependent upon applications received from the Commissioner of Police. The Commissioner of Police applied for no exceptional powers findings or fortification warning notices during the reporting year. The Commission continued to encourage Western Australia Police to make greater use of its organised crime function and the powers available under the Act.

The Commission made a submission to the Attorney General's 'Review of Administration of Justice Legislation' and recommended to the Joint Standing Committee on the Corruption and Crime Commission changes to the legislation affecting its organised crime function and contempt powers.

Supporting the Commission Achieved a level of 151.6 full-time equivalent staffing positions as at 30 June 2006, within the Commission's approved establishment level of 153 positions.

Implemented a Wellness Programme to promote a culture of health, including the initiatives of healthy heart checks, healthy eating seminars, healthy activities and flu vaccinations.

The Commission's first Industrial Agreement was registered with the Industrial Relations Tribunal on 19 January 2006. The agreement is for two years.


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Reports Tabled in the Parliament Protecting Personal Data in the Public Sector: Report of an Inquiry into Unauthorised Access and Disclosure of Confidential Personal Information Held on the Electronic Databases of Public Sector Agencies', tabled on 29 September 2005.

'Report to the Joint Standing Committee on the Corruption and Crime Commission with regard to the Commission's Organised Crime Function and Contempt Powers', tabled on 7 December 2005.

'Western Australia Police Property Management Practices: Report of a Joint lnquiry by Western Australia Police and the Corruption and Crime Commission', tabled on 19 December 2005.

'Misconduct Handling Procedures in the Western Australian Public Sector: Department of Local Government and Regional Development', tabled on 11 April 2006.

'Report in the matter of an allegation of public sector misconduct concerning Mr John D'Orazio MLA', tabled on 1 1 May 2006.

Required Reporting The Corruption and Crime Commission Act 2003 requires the Commission to report certain information under section 91 (2), including:

I Activitv Number *

Section 46: Organised crime exceptional powers findings Section 68: Organised crime fortification warning notices Section 94: Notices to produce a statement of information served Section 101 : Search warrants

1 Section 123: Integrity testing programmes 3

0 0

24 24

Section 103: Approvals for assumed identities Section 121 : Conduct controlled operations

11 2

I Telecommunications Interception and Access Act 1979 warrants I

79

Section 148: Arrest warrants Surveillance Devices Act 1 998 warrants


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0 14

THE CORRUPTION AND CRIME COMMISSION

Our Vision

Our vision is for government services and a public sector that are of the highest integrity and have the confidence of the people of Western Australia.

As a Commission we aim to be respected, and to have our services sought, and our advice acted upon.

Our Mission

Our mission is to:

improve continuously the integrity of, and to reduce the incidence of misconduct in, the public sector; and combat and reduce the incidence of organised crime.

Our Challenges

Our challenges are to:

manage our dual roles of corruption prevention and investigation in our relationship with public sector agencies;

manage the balance between being open and protecting the integrity of our operations;

ensure our profile and achievements are well-recognised before the three- year review of our organisation in 2007; and

perform our organised crime function within the constraints of the Act.

FUNCTIONS AND GOVERNANCE

The Corruption and Crime Commission Act 2003 (the Act) was proclaimed in the Government Gazette on 30 December 2003, establishing the Corruption and Crime Commission (the Commission) which came into existence on 1 January 2004 with the appointment of the inaugural Commissioner, Kevin Hammond.


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Functions

Section 7A of the Act identifies the Commission's two main purposes as:

to combat and reduce the incidence of organised crime; and to improve continuously the integrity of, and reduce the incidence of misconduct in, the public sector.

Section 7B describes the manner in which the Commission seeks to achieve its purposes, including:

authorising the use of investigative powers not ordinarily available to the police service to effectively investigate particular cases of organised crime; and helping public authorities to deal effectively and appropriately with misconduct by increasing their capacity to do so while retaining power to itself investigate cases of misconduct, particularly serious misconduct.

The Act defines the Commission's three main functions:

the misconduct function; the prevention and education function; and the organised crime function.

Division 2 of the Act describes all of the Commission's functions, including its responsibility for progressing matters for investigation referred by the Police Royal Commission and the former Anti-Corruption Commission, and by dealing with notifications of reviewable police action. These additional functions are incorporated in the three main functions listed above.

Governance - External

The Commission is a body corporate with perpetual succession and, as an independent agency, it reports directly to the Parliament. Given the nature of the Commission's powers, the Act also confers and provides important accountability mechanisms to ensure that the exceptional powers are used only in circumstances provided for by legislation.

The Commission is overseen by a parliamentary committee-the Joint Standing Committee on the Corruption and Crime Commission-which is aided by the Parliamentary Inspector of the Corruption and Crime Commission. The use of certain of the Commission's powers (such as search or telephone interception warrants) is governed by application to the Supreme and Magistrates Courts of Western Australia and the Federal Court of Australia. In addition, the Auditor General and the Ombudsman oversee aspects of the Commission's activities in accordance with various other legislative enactments. The Commission functions within the budgetary framework of government for which the Attorney General is the responsible minister.


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Parliament

Committee on the

For budgetary purposes the Attorney General is the Monitors and reports to

responsible minister Parliament on the CCC's exerclse of functions

Commission

Audits the CCC's Audits the operation of the Act

financial statements and the CCC's operations and procedures, deals with

misconduct by CCC officers.

Ombudsman Appeals Tribunal Magistrates

Audits compliance with the Telecommunications A judge of the Supreme Court can approve warrants Approve Telecommunications

for surveillance devices and searches. Interception warrants Interception Acts

A magistrate can only approve a tracking device warrant

Figure I: External scrutinv and governance of the Commission.

Joint Standing Committee on the Corruption and Crime Commission

The functions of the Joint Standing Committee are to:

monitor and report to Parliament on the exercise of the functions of the Corruption and Crime Commission and the Parliamentary Inspector of the Corruption and Crime Commission; inquire into, and report to Parliament on the means by which corruption prevention practices may be enhanced within the public sector; and, carry out any other functions conferred on the Committee under the Corruption and Crime Commission Act 2003.

The Joint Standing Committee is made up of members from both Houses of Parliament. The members as at 30 June 2006 were:

Chairman: Mr John Hyde MLA

Deputy Chairman: Hon. Raymond (Ray) Halligan MLC

Member: Hon. Margaret Rowe MLC

Member: Mrs Judith (Judy) Hughes MIA


I 0

The Commission appeared before the Joint Standing Committee at public hearings on 19 October 2005 and 3 May 2006, and met with the Committee on 16 November 2005.

Office of the Parliamentary lnspector

The Role of Parliamentary lnspector

The Corruption and Crime Commission Act 2003 establishes the Office of the Parliamentary lnspector of the Corruption and Crime Commission. The Parliamentary lnspector is an officer of the Parliament and is responsible for assisting the Joint Standing Committee on the performance of its functions.

Future appointments to this role will be made by the Governor under the Seal of the State on the recommendation of the Premier, made with the support of the majority oof the Joint Standing Committee and bipartisan support.

A person is eligible for appointment as Parliamentary lnspector if he or she:

is, or has been, a legal practitioner of not less than eight years' experience; or is a practising barrister of the High Court of Australia and has not less than eight years' legal experience.

Before beginning to perform the functions of the office of Parliamentary Inspector, a person must take an oath or affirmation, administered by a judge, that they will:

faithfully and impartially perform the functions of the office; and will not, except in accordance with the Act, disclose any information received under the Act.

The Parliamentary Inspector's functions, detailed in section 195 of the Act, are to:

audit the operation of the Act; audit the operations of the Commission for the purpose of monitoring compliance with the laws of the state; deal with matters of misconduct on the part of the Commission, officers of the Commission and officers of the Parliamentary Inspector; audit any operation carried out pursuant to the powers conferred or made available by the Act; assess the effectiveness and appropriateness of the Commission's procedures; make recommendations to either House of Parliament and the Joint Standing Committee; and perform any other function given to the Parliamentary lnspector under the Act or another Ad.

The Parliamentary lnspector has power to do 'all things necessary or convenient for the performance of the Parliamentary Inspector's functions': section 196 (2).


I I

Parliamentary lnspector and the Commission

The Parliamentary lnspector is entitled to full access to the records of the Commission. He or she may require Commission officers to attend and produce documents or supply information about any matter concerning the Commission's operations or the conduct of its officers.

For the purposes of an inquiry, the Parliamentary lnspector has the powers, protections and immunities of a Royal Commission and such inquiries are not to be open to the public. The Commissioner notifies the Parliamentary lnspector whenever the Commission receives an allegation that concerns, or may concern, a Commission officer. The Parliamentary lnspector may also receive referrals from other sources.

Upon the Parliamentary Inspector's review, the matter may be removed for further consideration and determination, in which case the Parliamentary lnspector will supply a notice to the Commission to comply with its terms. The Parliamentary lnspector may refer matters relating to the Commission to other agencies for consideration or action, and may recommend disciplinary action or the criminal prosecution of officers. The Parliamentary lnspector is not to interfere with, obstruct, hinder or delay any lawful Commission operation.

Communication between the Parliamentary lnspector and the Commission occurs as is necessary to meet the requirements of the oversight role. Meetings are arranged with Commission staff and access is provided to all Commission information required in response to any request from the Parliamentary Inspector. There is a regime of scheduled meetings between the Parliamentary lnspector and the Commission's Executive: communication occurs as frequently as is required by the Parliamentary lnspector in fulfilling his or her functions.

Performing a role independently of the Commission, the Parliamentary lnspector maintains a separate office and staffing arrangements. The Commission provides the Parliamentary lnspector with any additional support as required.

During the reporting period the Commission referred seven matters to the Parliamentary Inspector. The Parliamentary lnspector referred one matter to the Commission. Information concerning the operations of the Office of the Parliamentary lnspector during the 2005-2006 financial year will be published in its annual report.

Any complaints regarding Commission officers should be referred to the Office of the Parliamentary Inspector:

Locked Bag 123, Perth Business Centre, WA 6849

Telephone: (08) 9323 2222

Facsimile: (08) 9325 3280


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Parliamentary lnspector - Mr Malcolm McCusker A 0 QC

The Parliamentary Inspector, Mr Malcolm McCusker A 0 QC, was appointed to the role by the Governor on 1 January 2004. Mr McCusker was educated at the University of Western Australia, and commenced practising law in 1962. He was appointed Queen's Counsel in I 982.

Acting Parliamentary lnspector - The Hon Graeme Scott QC

The Act provides for the appointment of an Acting Parliamentary lnspector to act in the office of Parliamentary lnspector during a vacancy in that office, during periods when the Parliamentary lnspector is unable to perform the functions of the office or is absent, or when the Parliamentary lnspector has declared himself or herself unable to act.

Former Supreme Court judge the Hon Graeme Scott QC was appointed as Acting Parliamentary lnspector on 6 December 2005.

Attorney General

For budgetary purposes, the Attorney General is the responsible Minister. The Commission is also required to report to the Attorney General annually on matters relating to the Surveillance Devices Act 1998 and the Telecommunications (Interception and Access) Act 1979 (Cth). The Attorney General reports to Parliament on the use of these powers.

Role of the Judiciary in Issuing Warrants

The Commission is able to obtain warrants under various state and Commonwealth legislation in order to achieve its statutory functions. The Commission may seek a warrant under the Telecommunications (Interception and Access) Act 1979 (Ct h). An eligible federal judge or nominated Administrative Appeals Tribunal member is responsible for issuing a warrant under the Commonwealth legislation.

In order to obtain a warrant under the Surveillance Devices Act 1998 (WA), the Commission must apply to a judge of the Supreme Court in chambers (for optical, listening, and tracking warrants) or to a magistrate (for tracking warrants only). The Commission has 'enhanced powers concerning surveillance devices' under section 18A of that Act. The effect is that the Commission must satisfy the court that there are reasonable grounds for kuspecting' a relevant offence, as opposed to reasonable grounds for 'believing7 it.

Officers of the Commission may also obtain a search warrant under s 101 of the Corruption and Crime Commission Act 2003 (WA) by application to a judge of the Supreme Court of Western Australia.


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In relation to all warrants obtained by the Commission, there is the requirement for affidavits to accompany the application, which the respective judicial officers review. The judicial officer must be satisfied that the grounds of the application are met before issuing the warrant. If the judicial officer requires clarification of the affidavit, the deponent must provide further information in order to satisfy the legislative requirements.

No warrant applications were rejected (nor was clarification sought by any judicial officer of the Commission's warrant applications and supporting affidavits) in the reporting period. Three approved telecommunications interception warrants were not actioned because they were granted for a period one day in excess of the maximum 90-day limit. As a result, subsequent warrants were applied for, issued and actioned in their place.

Ombudsman

The Parliamentary Commissioner for Administrative Investigations (State Ombudsman) oversees the Commission's compliance with the Telecommunications (Interception and Access) Act 1979 (Cth) and the Telecommunications (Interception) Western Australia Act 1996. The Western Australian legislation requires the Ombudsman to conduct regular inspections of the Commission's telecommunications interception records and to report the audit findings to the state and Commonwealth Attorneys General.

Auditor General

The Office of the Auditor General has undertaken an audit and review of the Commission's accounts and key performance indicators. The certified accounts are located at the end of this report.

Freedom of lnformation

The Commission is an exempt agency for the purposes of the Freedom of lnformation Act 1992.

Compliance with Legislation

The Commission administers the Corruption and Crime Commission Act 2003 and, in all its activities, complies with the following legislation:

Disability Senices Act 1 993 Electoral Act 1907 Equal Opportunity Act 1984 Financial Administration and Audit Act 1985 Industrial Relations Act 19 79 Legal Practice Act 2003


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Minimum Conditions of Employment Act 1993 Occupational Safety and Health Act 1984 Parliamentary Papers Act 189 1 Parliamentary Privileges Act 1 89 1 Public Interest Disclosure Act 2003 Public Sector Management Act 1994 Salaries and Allowances Act 1975 State Records Act 2000 Sun/eillance Devices Act 1998 Telecommunications Act 1997 (Cth) Telecommunications (Interception and Access) Act 1979 (Cth) Telecommunications (Interception) Western Australia Act 1996 The Criminal Code Act 19 I 3

Strategic Planning: Outcome Based Management

This financial year, the Commission aligned its performance management to the Government's Better Planning, Better Services: A Strategic Planning Framework for the Western Australian Public Sector. This involved the establishment of Outcome Based Management structures, including Key Performance Indicators (KPls), in consultation with relevant agency stakeholders.

The Commission's performance against its new KPls is presented in section 11, 'Performance Assessment', of this annual report. This is the first occasion that the Commission has gathered data for these purposes and it should provide additional valuable information in future reporting periods.


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Governance - Internal

Structure

1 ACTING COMMISSIONER I

OPERATIONS I i Investigations

(Incorporating Intelligence Unit)

i Investigations Review & Complaints Assessment

7 Operations Support Unit

LEGAL SERVICES I Legal & Paralegal

Services Staff

Figure 2: Commission's Structure

BUSINESS SERVICES I Finance &Administration

Human Resources

lnformation Management Branch

Security a lnformation Technology

& Communications

Electronic Collection Unit

CORRUPTION PREVENTION, EDUCATION & RESEARCH

Corruption Prevention Education & Research Staff


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The Office of Commissioner

The Role of Commissioner

The Corrupfion and Crime Commission Act 2003 establishes the office of Commissioner, who, in the name of the Commission, performs the functions of the Commission under the Act and any other written law.

The Governor will appoint future Commissioners, by commission, under the Seal of the State on the recommendation of the Premier, made with the support of the majority of the Joint Standing Committee and bipartisan support.

A person will qualify for appointment as Commissioner if they have served as, or are qualified for appointment as, a judge of the Supreme Court of Western Australia or another state or territory, the High Court of Australia or the Federal Court of Australia.

Before beginning to perform the functions of the ofice of Commissioner, an appointee must take an oath or affirmation, administered by a judge, that he or she will:

faithfully and impartially perform the functions of the office; and will not, except in accordance with the Act, disclose any information received under the Act.

There are a number of functions and powers that are vested exclusively in the Commissioner.

Commissioner - Mr Kevin Hammond

The Commissioner constitutes the Commission and is ultimately responsible for all the activities and operations undertaken on the Commissioner's behalf by staff of the Commission.

The inaugural Commissioner was appointed by the Governor on the recommendation of the Premier in accordance with section 9(4a) of the Act. Future appointments to this position will be made from a list of three names submitted by a nominating committee consisting of the Chief Justice, the Chief Judge of the District Court and a person appointed by the Governor to represent the interests of the community and in accordance with the provisions of section 9 of the Act.

As former Chief Judge of the District Court of Western Australia, Mr Kevin Hammond brought considerable experience to the Corruption and Crime Commission. Having graduated in law from the University of Western Australia in 1957, he was admitted as a barrister and solicitor of the Supreme Court of Western Australia in 1960. He practised law in the Northam area and in Perth before being appointed to the District Court in 1982 and to the position of Chief Judge in 1995. Mr Hammond was appointed inaugural Commissioner in January 2004.


17

The Office of Acting Commissioner

The Role of Acting Commissioner

The Governor may appoint a person who is eligible for appointment as Commissioner to act in the office of Commissioner:

during a vacancy in that office; during any period when the Commissioner is unable to perform the functions of that office or is absent from the state; or

r in relation to any matter in respect of which the Commissioner has declared himself or herself unable to act.

Without the appointment of an Acting Commissioner in such circumstances the Commission would be unable to fulfil its functions and exercise its full powers.

The Commission's view is that it is preferable to have at least two Acting Commissioners available at any time. There is currently one appointed Acting Commissioner, however additional appointments are being sought to ensure the continuing and effective operation of the office. An advertisement calling for expressions of interest for the position was made on behalf of the Solicitor General's Ofice and closed on 13 April 2006.

Acting Commissioner - Mr Christopher Shanahan SC

Christopher Shanahan was sworn in as Acting Commissioner on 23 August 2005. He graduated in law from the University of Western Australia in 1982, and after completing his articles, worked as a solicitor in Perth for two years before teaching law at Macquarie University in Sydney and undertaking a Masters degree at the University of Sydney. Mr Shanahan was then appointed as a senior officer to the Department of Prime Minister and Cabinet in Canberra before returning to the law where he was employed as a solicitor for the Public Interest Advocacy Centre in Sydney.

Returning to Perth in 1993, Mr Shanahan worked as in-house counsel with the Aboriginal Legal Service before taking up a position as a lecturer at Murdoch University where he taught jurisprudence. After returning to full-time practice as a barrister the next year, Mr Shanahan continued to teach law part-time at Murdoch University. He continues to lecture in ethics and professional responsibility with the Law Society of Western Australia and has been a Member of the Bar Council of the Western Australian Bar Association since 1999. Mr Shanahan was appointed Senior Counsel for the State of Western Australia on 1 December 2004. In addition to practicing in this state, he has been admitted to practice in New South Wales and before the High Court of Australia.


18

Former Acting Commissioner - Ms Moira Rayner

Ms Moira Rayner was appointed Acting Commissioner on 12 July 2004, but resigned from the role on 16 August 2005. Actions undertaken by Ms Rayner, identified by the Commission during the course of an investigation, were referred to the Parliamentary Inspector. On 2 September 2005, the Director of Public Prosecutions referred a complaint to Western Australia Police concerning possible criminal conduct involving the alleged actions of Ms Rayner while she was employed as Acting Commissioner. The subsequent police investigation led to charges against Ms Rayner, which are currently before the courts.

Executive Director - Mr Mike Silverstone

Mr Silverstone is the Commission's principal officer and advisor to the Commissioner on all aspects of the Commission's operations and activities. The Executive Director oversees and coordinates the Commission's operations in accordance with the Commissioner's strategic directions.

Former General Counsel - Ms Patti Chong

Ms Patti Chong was appointed the Commission's first General Counsel on 29 October 2004, on secondment from the Office of the Director of Public Prosecutions (DPP). On 2 December 2005, Ms Chong decided to return to the DPP to avoid any perception of a conflict of interest in regard to the Commission's investigation of matters concerned with the conviction of Andrew Mark Mallard. In this decision, Ms Chong made a significant career sacrifice, believing that it was the only course open to her in the best interests of a thorough and proper investigation by the Commission. The Commission acknowledges Ms Chong's considerable contribution to its establishment.


19

Internal Governance - Committees

The Commission's internal governance committees provide the framework for strategic planning and efficient decision-making. These include:

Directors' Management Committee. This committee oversees the coordination of the Commission's major activities in achieving its strategic objectives. This committee meets fortnightly. Operations Review Committee. This committee oversees the Commission's investigative activities to ensure the Commissioner's priorities and requirements are addressed. From time-to-time extraordinary meetings focus on specific investigations, providing case officers the opportunity to brief the Commissioner on critical issues. This Committee meets weekly. Capability Management Committee. This committee oversees the acquisition, introduction and management of Commission capabilities. It considers capability requirements against the Commission's outputs and prioritises acquisitions, prior to seeking the Commissioner's concurrence for their implementation. This committee meets fortnightly. Audit Committee. The Audit Committee's responsibilities include the review of the Commission's annual financial statements, approval of internal audit plans and supervision of the Commission's risk management processes. This committee meets quarterly. Occupational Safety and Health Planning and Advisory Group. This group facilitates consultation and cooperation on occupational safety and health matters across the Commission. This committee meets monthly. Equity and Diversity Committee. This committee undertakes the development of the Commission's equity and diversity plan and monitors its outcomes. The committee meets quarterly. Commission Systems Committee. The Commission Systems Committee coordinates the development and delivery of the Commission's information and communications technology capability. This committee meets fortnightly. Commission Consultative Group. The purpose of the consultative group is to ensure effective communication throughout the Commission in order to improve its operational performance and working environment. The group- which consists of seven members nominated and elected from, and representing, the various Commission business units, and a chair appointed by the Executive-provides a forum for consultation with staff on matters affecting the efficiency and productivity of the commission. This committee meets monthly.


20

Changes to Corporate Structure

The Commission's growing experience has allowed it to more accurately determine the operational requirements dictated by its functions. Accordingly, it has undertaken internal restructures to focus the deployment of staff in critical service areas. All structural changes have been achieved within the Commission's approved full-time equivalent staffing position numbers.

Operations Directorate

The Investigations Unit within the Commission's Operations Directorate was subject to structural change during 2005-2006 with the formation of two multi-disciplinary investigative teams headed by two new investigations managers. The Commission anticipates that this organisational change will allow more effective investigation management within a large business unit, while permitting cross-team investigations as required.

Corruption Prevention Education and Research Directorate

The Corruption Prevention Education and Research Directorate (CPER) is in the final stages of a restructure which will see its staff numbers increase by 75 per cent to 14 positions. This staffing increase will permit the Commission to shift its corruption prevention and education focus from the education of agencies about their responsibilities for reporting misconduct, to assisting them to develop policies and systems designed to increase corruption resistance. As the Commission continues to expand its knowledge about the general and unique misconduct risks and factors affecting particular public sector agencies, the development of specifically targeted education programs will receive increased emphasis. An increased focus on research activities will also be achievable under this revised structure.

Legal Services Directorate

The Commission undertook an internal review of its Legal Services Directorate during 2004-2005 as a part of the process for ensuring effective staff allocation. Resulting from this review an additional position of Senior Lawyer was approved. An officer was appointed to this position towards the end of 2005.


2 1

The Misconduct Function

It is a function of the Commission (the misconduct function) to ensure that an allegation about, or information involving, misconduct is dealt with in an appropriate way.

Section 18 of the Act establishes the misconduct function and the Commission's associated responsibilities. It details the way in which the Commission may receive and initiate allegations of misconduct, and how it may deal with the allegations.

The following tables highlight the Commission's achievements in 2005-2006:

I Misconduct Notifications 2004-05 2005-06 Section 25: Reports of misconduct from individuals Section 28 Notifications from notifying authorities Section 21A: Reviewable police action (excludes allegations against police under sections 25 and 28) Total Notifications

582

51 8

Activity Section 41 : Reviews of appropriate authorities'

472

757

Table 1 : Number and Source of Notifications

1,310

2,410

. . .

investigations Section 26 Commission's own propositions about misconduct

1,132

2,361

2004-05 1,212

26

Joint agency investigations Rersorts tabled in the Parliament

2005-06 2,083

Statutory powers used

4 4

3 5

436

9 Number of public officers charged Number of total persons charged Number of charges against public officers

~ u m 6 e r of public officers convicted 0 7

442

5

Number of total charges Charaes discontinued (accused deceased)

7 30

12 1 44

43

Number of total persons convicted


22

147 54

Commission charges Other agency Commission-related charges

Persons before the court at 30 June 2006 on: 0

8 2

10

Table 2: Key Misconduct Function-Related Activity

Misconduct Defined

'Misconduct' is defined in section 4 of the Act. It occurs if a public officer corruptly acts, or corruptly fails to act, in the performance of the functions of office or employment. Misconduct also occurs when a public officer corruptly takes advantage of their office or employment to obtain a benefit for themselves or others, or, while acting in an official capacity, commits an offence punishable by two or more years of imprisonment.

A public officer misusing official information or material, or breaching the trust placed in them, is acting corruptly.

How the Commission deals with misconduct

The Act determines that the Commission may be advised of suspected misconduct in a variety of ways. These include:

receiving allegations from individuals, pursuant to section 25; receiving notifications about suspected misconduct from public sector agencies, pursuant to section 28; receiving notifications about suspected misconduct of police officers or reviewable police action, pursuant to section 21A; and formulating its own propositions about misconduct based on the Commission's own experience or knowledge, pursuant to section 26.

The Commission may decide to deal with suspected misconduct in a variety of ways, in accordance with section 33 of the Act. This may include:

referring matters to relevant public sector agencies for investigation; referring matters to independent bodies, such as the Ombudsman or Auditor General, for investigation; investigating matters itself; investigating matters in conjunction with relevant public sector agencies or independent bodies; or taking no action.

When a matter is referred to a relevant public sector agency for investigation, the Commission monitors the progress of the investigation, pursuant to section 40. Reports on completed investigations by relevant public sector agencies are forwarded to the Commission, which reviews their adequacy pursuant to section 41.


23

Reviewable Police Action S21A

Complaint from Public S25

Proposition by Commission S26

Notification from Agency S28

Commission assesses allegation

S22

Decision on further action S33

Commission to investigate

investigate in Referral to

cooperation with appropriate authority

another Agency to investigate

Commission monitors progress (S40)

reviews investigation (S41)

Figure 3: The Misconduct Function Flowchart

( Referral to \ A o b m e r a c t i o h Independent authority to be taken

to investigate s33( 1

',.,

( notified of decision 1 S35 /


24

Allegations and Notifications

The majority of information about misconduct comes to the Commission from allegations and notifications. The Commission received 2,361 such matters during the reporting period, of which 472 were from individuals and 757 were from public sector agencies. Additional to the notifications from public sector agencies, 1,132 were received from Western Australia Police, as 'reviewable police action' under section 21A of the Act.

Section 32 of the Act requires the Commission to deal with these matters by assessing them, forming an opinion about whether misconduct may be involved and making a decision under section 33. The Commission gives effect to these requirements by employing a methodical assessment process, which involves making enquiries into the following issues:

Is a public officer involved? Usually this issue is readily resolved because the person named is employed in the public sector. However, the issue can become complex when, for example, the person named is employed by a body which is jointly federally and state funded, or the person is a volunteer acting on behalf of a state agency.

Does the matter concern misconduct? Usually this issue is readily resolved because the actions named are identifiable disciplinary or criminal matters. However, the issue can become complex when, for example, identifiably improper actions have occurred because of faulty policies or procedures, or the actions involved unusual circumstances.

Does the matter warrant further investigation? Usually this issue is readily resolved because it is in the public interest to ensure that suspected misconduct by public officers is investigated. However, the issue can become complex when, for example, the misconduct is itself minor, evidence is not readily available, or the matter relates to events that occurred several years in the past.

If further investigation is warranted, who should conduct the investigation? Usually this issue is readily resolved because it is in the public interest to ensure that public sector managers manage misconduct that occurs within their span of control. Therefore, the majority of matters are referred for investigation to the agency employing the public officer involved. The Commission then monitors the progress of these investigations and reviews the outcomes to ensure that the process has been thorough. Matters may also be referred to the Western Australia Police Public Sector Investigation Unit (PSIU) for criminal investigation, or to agencies with a central coordinating role, such as the Department of Local Government and Regional Development. In a small, but not insignificant, percentage of matters, the issues are so serious, widespread or important that the Commission decides to investigate them itself.


25

Case Study One: Example of an Assessment

The Commission received two separate complaints relating to decisions by the City of Albany to initially reject, then approve and then rescind an application by a group of developers to develop a property in Earl Street, Albany.

On 25 January 2006, a director of the company seeking to develop the property complained about the conduct of a councillor during a telephone conversation about the development application. On 28 April 2006, the councillor complained to the Commission that the director's complaint was false and malicious.

Background

20 September 2005, the development company lodged an application with the City of Albany to develop the property. The application was rejected. The development company lodged an application with the State Administrative Tribunal (SAT) to have the decision reviewed. The parties agreed to mediation and new plans were drafted. On 17 January 2006, the amended plans were presented and accepted by Council. The councillor about whom the complaint was received arranged for a rescission motion and called a Special Council Meeting. On 31 January 2006, a Special Council Meeting was held, at which time Council rescinded its decision to approve the Earl Street Development. The developer lodged another application with the SAT. On 31 January 2006 the SAT heard the matter and upheld Council's decision.

The Director's Complaint

The director claimed that prior to the meeting of the 31 January 2006 he contacted all councillors to discuss the development application. The director said that during his telephone conversation with the councillor, who became the subject of his complaint, the councillor had told him that he intended to have the decision overturned. He claimed that the councillor offered to put him in touch with someone who might be interested in purchasing the land and who would be prepared to build a more suitable development.

In accordance with section 32(1) of the Act the Commission assessed the matter. This included interviewing the director and reviewing documents relevant to the application.

The conversation in question occurred over the telephone. This meant that, in the absence of some form of recording, only the councillor and the director could attest to what was said. The director did not make such a recording. The Commission therefore concluded that there was insufficient evidence to proceed and the Commission file on the director's complaint was closed.

The Councillor's Complaint

The councillor alleged that the director's complaint was false and made maliciously to defame him in order to assist the development application.

The Commission met and interviewed the councillor to discuss the details of his complaint. During the meeting the councillor denied that he offered to put the director in touch with a purchaser. He claimed that he told the director merely that he had spoken with another developer about the development proposal. The second developer told the councillor that a more modest development, within Council's guidelines, was a viable option. The councillor told the director about the second developer in order to illustrate that more modest plans than those proposed were viable.


26

The director was interviewed a second time, during which he reiterated his initial claims. He said that he did not believe that the councillor had told him about the second developer as an example of viability.

There was clearly a conflict between the director's version and the councillor's version of what was said during the telephone conversation. This is perhaps not surprising. The fairly entrenched positions of the councillor and director and the nature of the conversation (whatever was said) were likely to lead to misunderstandings. In the absence of any clear evidence to resolve that conflict the Commission closed its file on the councillor's complaint, thereby completing the assessment.

The breakdown of assessment decisions made during the reporting period is as follows:

Decision Referred to home agency for investigation Referred to WA Police PSlU Referred to both home agency and WA Police PSlU Outside of jurisdiction Take no action Referred to Commission Investigations Unit Referred to independent

I I I I I I

Table 3: Allegation Assessment Referrals

authority Total

As the above table shows, both the number of assessments and the decisions made for dealing with them remain consistent in quantity and distribution to those of the previous financial year.

Number 1,516

55 15

170 570 53

7

The extent and complexity of inquiries conducted at the assessment stage can vary considerably. Simple inquiries may be limited to considering documents provided to the Commission and may be completed by one officer within several hours. In contrast, complex inquiries may involve more than one case officer, multiple days of work and significant input from management. These complex inquiries may also involve any, or a combination of, the following:

2.386

conducting interviews of complainants, witnesses or other stakeholders; serving notices under section 95 of the Act to obtain and examine further documents;

Percentage 63.6%

2.3% 0.6%

7.1% 23.9% 2.2%

0.3%

serving notices under section 94 of the Act to obtain and examine statements of information from a public authority or officer;

100%

engaging in a detailed examination of evidence gathered by agencies in order to form an independent opinion and to provide detailed explanation to stakeholders; and

Number 1,504

57 12

170 571 45

2

visiting and examining the scenes of alleged misconduct.

Percentage 63.7%

2.4% 0.5%

7.2% 24.2% 1.9%

0.1%

2.361


27

100%

During the reporting period the Commission assessed 2,361 matters. Of those matters, 230 involved complex inquiries.

Case Studv Two: Example of an Assessment

On 25 November 2005, the Department of Premier and Cabinet (the Department) notified the Commission about two documents alleging misconduct by senior officers of the Office of Shared Services (OSS).

One letter received by the Department on 8 November 2006, purportedly signed by an officer of OSS, included allegations about the conduct of senior officers during a Melbourne Cup Luncheon. In an attempt to address the issues raised in the letter the Department wrote to the purported author. Upon receiving the letter the purported author took it to the Executive Director of OSS and advised that he had no knowledge of the matter.

On 21 November 2006, the Department also received calls from a number of Directors General within the Public Service advising of anonymous correspondence received which alleged that a different senior officer of the OSS was using his position to obtain sexual favours from female OSS staff. The document named a number of female officers both currently and previously employed by the OSS.

Pursuant to section 32(2) of the Act, the Commission conducted a preliminary investigation into the matter, which included:

Interviewing the purported author and obtaining samples of his signature for comparison. lnterviewing the senior officer and female employees mentioned in the anonymous letter.

These interviews established that there was no basis to the allegations made in the letters. A comparison of the sample signatures provided by the purported author with the signature on the first document revealed that he was not the author of the document. In other words, there was no basis to the letters containing the allegations.

In the light of these false allegations and the fact that an officer's signature had been forged, the Commission turned its attention to determining whether the author(s) of the letters was an OSS employee. This involved the following inquiries:

Serving a Notice on the OSS to determine whether any information on the OSS computer system could provide evidence as to the authorls of either or both of the documents, Sending both documents to the Australian Federal Police (AFP) to examine them for latent fingerprints. lnterviewing a person of interest (identified during the interviews) and obtaining that person's fingerprints. Arranging for the AFP to compare the fingerprints obtained to the latent fingerprints found on both documents.

The search of the OSS computer system found no record of either document. Fingerprint analysis by the AFP found no match between those found on the documents and the fingerprints of the person of interest.

The Commission was unable to establish who was responsible for compiling and sending the letters and closed its file.


28

Statistics about Assessments

The majority of matters received and assessed by the Commission involved public officers from Western Australia Police, and from the education, justice, local government and health sectors. The breakdown of these and the remaining matters into agency sectors are shown in Table 4.

Agency Sector WA Police Education JusticelAlMS (includes new Department of Corrective Services and Department of the Attorney General) Local Government Health

Table 4: Distribution of Matters by Agency Sector

Remainder Total

Case Study Three: Example of an Assessment

2004-05

220 201

157 56

The City of Subiaco (the City) notified the Commission of suspected misconduct in relation to the release of confidential information.

Allegations 1,580

2005-06

196 2,410

The City was conducting rent reviews for a number of properties that comprise part of its investment property portfolio. As part of this review, the City considered confidential staff reports and recommendations at two meetings held on 8 November and 22 November 2005. Councillors and staff attended these meetings. No members of the public were present. Subsequent to each meeting, comments made by members of the public indicated that aspects of these meetings had been disclosed to them. In particular, the lessee of one of the properties forwarded emails to various people containing information in relation to outcomes reached at the 22 November 2005 meeting.

Percentage 65.6%

Allegations 1,346

9.1% 8.4%

6.5% 2.3

Pursuant to section 32(2) of the Act the Commission assessed the matter by making the following inquiries:

Percentage 57.0%

8.1% 100%

Interviewing the author of the email. Serving a notice on the author of the email to obtain any correspondence, documents, diary entries or other information relating to the council meetings. lnterviewing the Chief Executive Officer of the City. Serving notices to obtain documents on the City, including the telephone and email records of councillors. Interviewing a councillor.

243 153

187 76

The Commission's assessment identified that, although the information might have been leaked, it was also possible that the tenant had pieced together the outcome of the meetings by analysing publicly available information from a number of different sources. In the circumstances, the Commission closed its file.

10.3% 6.5%

7.9% 3.2%

356 2,361


29

15.1 % 100%

Western Australia Police - Reviewable Police Action

There has been a decrease from the previous financial year of 14.8 per cent in the number of police-related complaints, and the quantity of police-related matters as a proportion of all matters reported to the Commission has likewise fallen by 8.6 per cent. Despite this reduction, notifications relating to the police continue to constitute the majority of those received by the Commission.

The high proportion of matters involving Western Australia Police is due in part to the specific reporting requirements of section 21A of the Act, which obliges the Commissioner of Police to notify the Commission of additional complaints that do not apply to other public sector agencies. The notification requirement includes the additional reporting of matters that fall within the definition of 'reviewable police action' under section 21A, but which do not fall within the definition of 'misconduct' under section 4. At their least severe, such matters may include quite minor complaints; for example, the issuing of traffic infringements, the demeanour of an officer or bad language used by an officer.

The police local complaints resolution process is used to deal with minor matters, as well as more serious matters that do not warrant a substantive investigation. Although there are no set rules, complaints about police are generally dealt with in the following ways:

Complaints about conduct which meets the 'reviewable police action test' in section 21A of the Act, but which falls short of the 'minor misconduct' test in section 4(d) of the Act, are usually dealt with using the local complaint resolution process.

Complaints about conduct which meet the 'reviewable police actiony and the 'minor misconduct' tests, but fall short of the 'serious misconduct' test (under sections 4(a), 4(b) or 4(c) of the Act) are usually dealt with as either local complaint resolution matters or by way of an investigation conducted at the police district level, depending upon the nature and circumstances of the complaint.

Complaints about conduct which meets the 'reviewable police action', 'minor misconduct' and 'serious misconduct' tests are dealt with by way of an investigation conducted at the police district level or by the Internal Affairs Unit, depending upon the nature and circumstances of the complaint.

The Commission believes that the stringent notification requirements for police remain necessary and appropriate for several reasons. First, there is a long history of public disquiet about the conduct of police officers. Second, serious misconduct often has its genesis in minor misconduct. Third, historically, misconduct has not always been adequately dealt with by police managers.

The external oversight of such matters ensures that they are not ignored by police managers, providing them with the opportunity to act to deal with problematic officers before the behaviour of such officers escalates to serious misconduct. This improves the overall corruption resistance of the police service.


30

Members of the public also have a long-standing expectation that their complaints about minor matters will also be subjected to external oversight (such complaints are not minor to the people affected). The current system provides an efficient mechanism to enable these people to be heard.

Department of Health

The number of matters received involving the health sector appears to be unusually low. This conclusion is drawn from consideration of misconduct risk factors including the large size and physical distribution of the health sector's staff and the significant misconduct risks that are faced in its working environment. Together these factors suggest a high potential for misconduct. The Commission plans to begin a process of reviewing misconduct handling mechanisms within this sector in the coming financial year.

Department of Local Government and Regional Development

There has been some growth in the number of complaints received concerning the local government and education sectors. A review of the Department of Local Government and Regional Development during the year resulted in recommendations to improve notification procedures and communication between the department and individual local governments.

Department of Education and Training

The Department of Education and Training (DET) is one of the Commission's key stakeholder agencies. The Commission is not convinced that DET has an adequate misconduct handling mechanism and has responded to this in a number of ways.

A submission to DET's review of its Complaints Management Unit was made during the year. The Commission's primary recommendation was that a Professional Standards Directorate be established within DET. This recommendation has been accepted. A discussion paper concerning DET's conduct of investigations under the Public Sector Management Act 1994 and suggesting significant changes to DET's approach was forwarded to DET. Although DET accepted the Commission's position, the Commission awaits DET's response as to how and when these changes will be implemented. A report addressing sexual contact between DET staff and students is expected to be tabled in Parliament shortly. The report makes a number of recommendations for change within DET.

While DET has indicated a preparedness to improve its misconduct handling mechanism, substantive changes have not yet occurred.

Department of Corrections

A decline in the number of misconduct allegations received about the justice sector may reflect uncertainty in recent times following the Mahoney Inquiry and the


3 1

formation of new departments. There have been considerable changes to the justice sector consequent upon the Mahoney lnquiry recommendations. The Commission made a submission to the Mahoney Inquiry recommending that the Department of Justice establish a Professional Standards Directorate. This recommendation was adopted by the Mahoney lnquiry and accepted by the newly formed Department of Corrections. The Department is currently engaged in implementing that recommendation. The Department consults regularly with the Commission as part of the process of establishing its Professional Standards Directorate,

Categories of Complaints

The matters received by the Commission are categorised by misconduct type. A breakdown of matters appears in Table 5 below.

Allegation Category

Assault/excessive force Inadequate investigationllack of attendancelfail to respond Demeanourllanauaaeltreatment

V V

Traffic matters l m ~ r o ~ e r release of information

FY 2004-05

342

284

m m

Financial impropriety Drug issues Corruption Arrest procedures Harassmentlsexual harassment Improper use of computer system1pornographic images Detention issueslself-harmlduty of care Stealina

Number 407

FY 2005-06

161 142

" Improper associations Miscellaneous Giftslconflict of interest False evidencelperjuryljudicial process Property issues Planning issues Firearms dischargelshooting Search procedures Secondary employment

1 Total I I I I

1 2,410 1 100% 1 2,361 1 100% Table 5: Complaint Categories and Numbers of Matters

Percentage 16.9%

Number 364

14.2%

11.8%

136 107 96 95 94 82

76

72

Tenderinglcontracts Lost identitv cards


32

Percentage 15.4%

6.7% 5.9%

53 49 46 40

36 26 19 16 16

349

352

5.6% 4.4% 4.0% 3.9% 3.9% 3.4%

3.1%

3.0%

10 5

14.8%

14.9% 139 182

2.2% 2.0% 1.9% 1.7%

1.5% 1.1% 0.8% 0.7% 0.7%

5.9% 7.7%

97 90 54 106 106 82

59

90

0.4% 0.2%

4.1% 3.8% 2.3% 4.5% 4.5% 3.5%

2.5%

3.8% 45 68 35 35

19 26 5 24 12

1.9% 2.9% 1.5% 1.5%

0.8% 1 .I% 0.2% 1 .O% 0.5%

17 5

0.7% 0.2%

Moving Average of Matters Received and Closed I July 2005 to 30 June 2006

-Average Received -Average Closed

Chart 6: Moving Average of Matters Received and Closed

Monitoring Agency Misconduct Investigations

Section 40 of the Act describes how the Commission may monitor the progress of matters it refers to public sector agencies for investigation. The Commission gives effect to this provision by:

seeking progress reports from agencies; providing a consultancy service to agency investigators, including providing detailed advice about the conduct of their investigations; acting as a conduit for information between complainants and agency investigators; examining documents and agency investigation files in situ; and obtaining relevant evidence and providing such evidence to agency investigators.

During the year ending 30 June 2006, the Commission had monitored 1,884 agency investigations. At the end of the financial year, the progress of 655 agency investigations was being monitored.


33

Reviewing Agency Misconduct Investigations

Section 41 of the Act authorises the Commission to review the adequacy of completed misconduct investigations undertaken by public sector agencies. The Commission gives effect to this provision by employing a systematic review process, which involves inquiring into the following issues:

Have all reasonable and relevant issues, including specific allegations and related matters, been considered? Usually this issue is readily resolved by comparing the matters initially alleged or notified to the issues addressed in the investigations report. However, the issue can become complex when, for example, the matter investigated highlights associated corporate or managerial risks or problematic behaviour that was not actually the initial subject of the complaint.

Has all relevant and reasonably available evidence been gathered? Usually this issue is readily resolved. However, the issue can become complex when, for example, the content of witness and suspect interview reports reveal that the investigator has not asked appropriate questions or probed important issues, or that forensic evidence has been ignored.

Has the evidence gathered been logically analysed and reasonable conclusions reached? Usually this issue is readily resolved because appropriate conclusions and recommendations flow naturally and logically from a proper examination of the available evidence. However, the issue can become complex when important issues or evidentiary considerations are not given appropriate weight, or illogical or unreasonable inferences are drawn from the evidence, or recommendations focus on the minutiae of the matter at hand at the expense of the associated systemic problems.

Were efficient and effective investigating practices followed and documented in ways that allow external review? Usually this issue is readily resolved. However, the issue can, and frequently does, become complicated when agency misconduct investigations are either disproportionately more complicated or over-simplified, or agencies forward technical and brief letters to aggrieved parties which either appear to mislead or overlook important aspects of the matter.

As with the assessment process, the extent and complexity of inquiries conducted at the review stage can vary considerably. Simple inquiries may be limited to considering documents provided to the Commission and may be completed by one officer within several hours. In contrast, complex inquiries may involve more than one case officer, several days of work and significant input from management. They might also involve any, or a combination of, the following:

conducting interviews of complainants, witnesses or other stakeholders; serving notices under section 95 of the Act and the obtaining and examination of further documents; and visiting and examining the scenes of alleged misconduct.


34

During the reporting period, the Commission reviewed 2,083 matters.

Case Studv Four: Example of a Rsview

Police notified the Commission of an incident in which photographs of two people who had died in the outback some weeks prior to their bodies being found were emailed to police officers, and ultimately others, not connected with the investigation of the matter.

The Commission assessed the matter and referred it to police for further investigation in accordance with sections 32(1) and 33(l)(c) of the Act. On 5 January 2006, the Commission received the police internal investigation report on the matter. The matter was reviewed, in accordance with section 41 of the Act. The police internal investigation report addressed the following issues:

Whether one of the officers connected with the investigation into the deaths emailed the photographs to other police personnel - this issue was sustained. Whether officers who received the photographs emailed them on to other police officers - this issue was sustained. Whether officers who received the photographs added insensitive comments to the images and then emailed them on to other police officers -this issue was sustained. Whether officers who received the photographs emailed them on to other police officers at private email addresses - this issue was sustained. Whether officers who received the photographs emailed them on to people outside the police service - this issue was sustained.

The police internal investigation revealed that one of the officers involved in investigating the deaths emailed the photographs to four other police officers unconnected with the investigation. This set about a chain of events which resulted in the photographs being emailed to 587 police service staff. Four hundred and four of these people did not forward on emails. Fifty people sent emails to people external to the police service. Fourteen personnel added insensitive comments to the emails they received and sent on.

Personnel who received the images, but did not forward them on were not subjected to any form of disciplinary or managerial intervention. Personnel who forwarded on emails to people within the police service were subjected to an unfavourable report. Personnel who forwarded on emails to people outside the police service were charged with the disciplinary offence of 'Acting in a Manner Likely to Bring Discredit on Police'.

As well as the Commissioner of Police emailing all personnel about the unauthorised release of operational information, the following changes to policy and procedures were made:

The Code of Conduct was amended to include work-related emails in the 'Inappropriate Communication' section. The Commissioner's Orders and Procedures Manual was amended by including guidelines about how to deal with work related emails. Standard documentation associated with major incidents was amended highlighting confidentiality. A training programme was undertaken reinforcing the risks associated with work-related emails. Agency corruption prevention and risk management plans were amended to cover work-related emails. Induction procedures were amended to cover the confidentiality of work-related emails.

In addition to these steps a meeting was held between the Commissioner of Police, the family of the deceased men and the officers involved, at which the Commissioner of Police apologised to the family of the deceased.


35

The police internal investigation was thorough. All relevant evidence was obtained, appropriately analysed and conclusions reasonably open to the investigator were reached. The Commission determined that the investigation was adequate and did not require further action.

Handling of Matters Assessed, Monitored and Reviewed

The number of matters dealt with by the Commission that completed the various stages of the complaint handling process appears below. Although the total number of assessments shows a slight reduction from the previous year (-2.0%), there have been significant increases in the number of matters monitored (+67.5%) and reviewed (+71.9%), constituting an overall increase in matters handled of 33.3 per cent.

These increases can be generally attributed to the continuing reduction in the backlog of matters that were inherited from the former Anti-Corruption Commission and the Ombudsman, as they have progressed from the assessment stage into the more resource intensive monitor and review stages.

Change I Change% I 2004-05 I I I I

2005-06

Assessed I I I I

I I I I

Programme of Agency Complaint Handling Reviews

2,410

Monitored

Reviewed

Total Matters

The Commission has engaged in a programme of reviewing misconduct management mechanisms within agencies throughout the sector. As an overall proposition, the Commission's view is that agencies should strive towards efficient and effective misconduct management mechanisms that both properly inform management of misconduct incidents and risks, and respond effectively to misconduct incidences on a case-by-case basis. In larger agencies such mechanisms ought to take the form of a professional standards portfolio, or something similar, which encompasses managing misconduct risks; complaint handling; education and training about misconduct; related issues such as agency codes of conduct and grievance systems; and liaison with the Commission.

+ 759

Among the first departments reviewed was the Department of Local Government and Regional Development (DLGRD). The Commission's DLGRD report was tabled on 11 April 2006. The Department of Consumer and Employment Protection, and the Department of Community Development are currently subject to review.

2,361

+ 67.5% 1,125

1,212

Table 7: Matter Handling Comparison

4,747


36

1,884

- 49

2,083

6,328

- 2.0%

+ 871

+ 1,581

+ 71.9%

+ 33.3%

Additionally, the Commission provided a submission to the Department of Education and Training and participated in its review of internal complaints management processes and procedures.

On the request of Special Inquirer Hon. Dennis Mahoney QC, the Commission provided a submission to the 'Inquiry into the Management of Offenders in Custody and in the Community' in August 2005. The Mahoney Inquiry report, tabled in November 2005, incorporated key recommendations made by the Commission.

The Commission intends continuing its programme of agency misconduct management reviews to encompass other areas of the public sector.

Case Study Five: Example of a Matter Proqressinq to Investigation

The Commission was notified by Edith Cowan University that a lecturer had been avoiding tax by requesting that funds be paid into a software company rather than into his personal bank account. In accordance with section 32(2) of the Act, the Commission made preliminary inquiries into the matter. These inquiries, which included the following steps, revealed that the lecturer had been fraudulently operating bank accounts associated with the software company and using the software company to present bogus accounts to the university. The Commission:

Conducted searches to determine the lecturer's home address, business interests outside the university and his links with both the software company and the principal of the software company. Identified that the principal of the software company was a Canadian national. Searches of immigration records revealed that he had not been in Australia for approximately 10 years. Served a notice on the software company's banker. Documents received revealed activity on the accounts of the software company and its principal, including over-the-counter withdrawals. Served a second notice on the bank for earlier records and signatory cards for the accounts. Established that the lecturer had been operating the accounts, including depositing cheques from the university and making withdrawals.

The Commission formed the view that serious misconduct may have occurred, pursuant to section 4 of the Act and an investigation was conducted pursuant to section 33(l)(a) of the Act.

The investigation resulted in the lecturer being charged and convicted of the following offences:

three counts of fraud; four counts of opening bank accounts in a false name; and two counts of giving false testimony to the Commission.

Refer to Case Study Six for further details of the Commission's investigation.

Serious Misconduct lnvestigations Conducted by the Commission

lnvestigations conducted by the Commission in 2005-2006 covered a broad range of misconduct within the Western Australian public sector. In some cases these involved serious criminal offences including corruption, theft, drug offences, perverting the course of justice, divulging official secrets, assault and fraud.


37

Serious misconduct investigations involve a significant proportion of the Commission's resources and draw on specialist personnel including investigators, lawyers, intelligence officers and financial experts. The Commission applies traditional investigative techniques in conjunction with multi-disciplinary investigative teams and certain exceptional powers afforded to the Commission and granted under the authority of the Commissioner. These powers include:

power to obtain statements of information from a public authority or officer (section 94); power to obtain documents and other things (section 95); power to summons witnesses to attend and produce things (section 96); power of Commission in relation to things produced (section 98); power to enter and search public premises (section 100); and execution of search warrants (section 101).

Special powers are given to the Commission in relation to:

private and public hearings (Part 7); authority to conduct controlled operations (section 121); and authority to conduct integrity testing programmes (section 123).

CCC Act Statutory powers1 Section 94: Power to obtain information from a public authority or officer Section 95: Power to obtain documents and other things Section 96: Power to summon witnesses to attend

2004-05 20

21 6

and produce things Section 100: Power to enter and search public premises Section1 01 : Search warrants Section1 03: Assumed identity approval Section1 21 : Authoritv to conduct controlled operation

I I

Table 8: Serious Misconduct Investigation Use of Statutory Powers

2005-06 24

223

76

Section1 23: ~uthorit ; to conduct integrity tesiing programmes Section1 48: Arrest warrants Surveillance Devices Act 1998 warrants

Telecommunications (Interception) Act 19 79 (Ct h) warrants Total

In addition to the use of the statutory powers listed in Table 8, the Commission obtained one search warrant under section 71 1 of the Criminal Code and four search

6 1

0

14 66 4

1 Reported in accordance with section 91 (2) of the Corruption and Crime Commission Act 2003.

1

24 11 2

10

0 8

(includes two extensions)

22

436


38

3

0 14

(includes one extension)

79

442

warrants under the Misuse of Drugs Act 1981 (WA) during the 2005-2006 reporting year.

Not all investigations result in the confirmation of serious misconduct or criminal offences. Very often, significant resources are expended in determining the facts of a matter and allegations are disproved. It is the role of the Commission to investigate allegations of misconduct regardless of the ultimate outcome. What these investigations can produce are assessments and an opinion detailing what was discovered as a consequence of the Commission's involvement and, in some cases, recommendations as to changes that should be considered to address any matters identified.

lntegrity Testing Programmes

Pursuant to section 123 of the Act, the Commissioner may authorise the conduct of integrity tests involving, where necessary, the utilisation of controlled operations under section 121. These enable officers of the Commission to create scenarios which test the integrity of public officers under strict controls. The authorisation must name the officers and persons subject to an integrity test, the activities to be conducted, and the time period.

lntegrity testing programmes present an effective tool in the investigation of misconduct allegations. lntegrity tests are developed and constructed based upon extensive intelligence collection and analysis and may be directed against public officers who are the subject of an allegation of misconduct. Scenarios based upon realistic circumstances may be created in which a public officer might choose to engage in corrupt conduct. The objective of the programme is to test the integrity of public officers, not to entice honest officers into corrupt conduct.

While there is a direct effect in relation to those persons tested, the use of these powers and the knowledge that these powers exist may affect misconduct more broadly, as integrity tests may also deter corrupt conduct. When the occasion for opportunistic misconduct arises, public officers who are aware of the programmes may believe that their conduct is being monitored, whether or not an integrity test is actually being undertaken.

The Commission is continuing to develop its integrity testing capabilities and this year engaged the experience of the Australian Federal Police to assist in the development of an appropriate training course, customised to meet the legislative and local environment requirements of Western Australia and the Commission's integrity testing role. In June, the course was delivered to specific officers who will be involved in the conduct of future integrity tests.

During the reporting period the Commission undertook three integrity testing programmes, with criminal charges resulting from some of these operations.


39

Private and Public Examinations (Hearings)

The Commission may summons persons and compel them to give evidence under oath at an examination, commonly referred to as a hearing. While a person's testimony cannot be used against them for criminal prosecution, it is an effective tool in ascertaining the facts and establishing the truth in matters, especially when used in conjunction with other investigative methodologies. The commissioner may open an examination to the public, where it is in the public interest to do so, after having considered the benefits of public exposure and public awareness against the potential for prejudice or privacy infringements.

The Commission conducted 17 private hearings in support of 13 misconduct investigations during the reporting period. One public hearing was held in relation to the publication of the Commission's opinion and decision in its assessment of a matter involving an allegation of public sector misconduct concerning Mr John DIOrazio MLA, for which it determined that there was no evidence of misconduct.

I Hearings Number I Hearing Days I Number I Hearing Days I Public Private

l ntelligence

I Total I I

The Commission's Investigations Unit maintains an intelligence function to collect and analyse information from a variety of sources in support of the Commission's operational work. The Commission's intelligence function delivers three types of intelligence: tactical intelligence, in support of current operations; operational intelligence, which focuses on the development of new targeting opportunities; and strategic intelligence, which involves the provision of assessments in relation to misconduct trends within the Western Australian public sector.

4 12 16

Section 26 of the Act enables the Commission to develop a proposition of misconduct based on its own experience and knowledge. The development of such a proposition relies heavily upon intelligence held by the Commission. During the financial year, 26 such propositions of misconduct concerning particular government sector agencies were developed and approved. These propositions addressed a range of misconduct themes across a number of different public sector agencies and resulted in the commencement of new operations.

Upon completion of these operations the Commission's intelligence function has the capacity to conduct post-operational analysis of matters in order to identify specific misconduct trends or methodologies, which in turn can be used to initiate new investigative activity. The Commission believes that employing this type of proactive process has the potential to offer a greater long-term effect to detecting, investigating and minimising instances of misconduct within the public sector.

14 12

Table 9: Examinations (Hearings) 26


40

1 17 18

0.5 18.5 19

lnformation Furnished to Independent Authorities

The Commission regularly provides appropriate information under the Act to independent authorities. The general nature of this information is required to be reported under section 91 (2)(d) of the Act. This includes:

lnformation to assist authorities to deal with complaints from people who have also complained to the Commission about the same or similar matters. lnformation or complaints received by the Commission but which fall within the jurisdiction of the independent authorities. lnformation about matters in which both the independent authority and the Commission have an interest.

Specific examples of information furnished to authorities during the financial year are listed below.

The Commission conducted an investigation into an allegation of misconduct involving personnel from the then Department of Conservation and Land Management (CALM). The investigation concluded in the conduct of public hearings and subsequent laying of criminal charges. The Commission disseminated relevant information to CALM to enable them to commence disciplinary proceedings against a particular officer. The Commission conducted an investigation relating to allegations of misconduct centred on a prison facility. The investigation concluded with the identification of systemic weaknesses and minor misconduct. The Commission disseminated information to the then Department of Justice for their action. The Commission conducted an investigation relating to misconduct involving police officers. Although the investigation did not result in serious misconduct being identified, relevant intelligence was disseminated to Western Australia Police.

Case Study Six: Example of a Matter Prouressin~ to Joint lnvesfiqafion

A complaint was received from Edith Cowan University (ECU) in May 2005 alleging that a lecturer at the School of Computer and lnformation Science had billed ECU on three occasions for software consulting work completed by a software consulting company located in Calgary, Canada. These invoices were paid from ECU funds, which were resourced from research funds. Staff became suspicious of the lecturer because he requested that payment be made to him directly, and although the company was Canadian, payment was requested in Australian dollars. Despite the suspicion, ECU approved the payments. The lecturer was later questioned by ECU management regarding the invoices and a travel claim submitted for travel to Nottingham, England. The lecturer resigned from ECU on 23 May 2005 without answering the allegations.

Commission investigators executed a section 101 search warrant on the lecturer's home address, while investigators from the Calgary Police Service simultaneously interviewed a Canadian national whose name appeared on the invoices. Documents seized during the search included photocopies of the lecturer's passports but with two false names overwritten in the name sections. Among his financial and business records were bank and share trading accounts in one of the false names and various invoices in the name of the Canadian national.


4 1

At the conclusion of the search, the lecturer and his defacto partner were summonsed to appear at a Private Examination at the Commission during which he stated that the Canadian was a personal friend and had conducted research on his behalf in relation to software development but had not

- -

provided him with any report. However, this was contrary to the information provided by the Canadian to investigators in Calgary. The lecturer was also questioned about bank and share trading accounts in the two false names and, whilst under oath, he advised that he had not opened accounts in those names.

Extensive inquires involved liaison with the Garda in Eire, the Irish Consulate in Perth, the Canadian Consulate in Canberra, Calgary Police, United Kingdom Police, Australian Federal Police, Western Australia Police, Customs, Western Australian government departments, numerous financial institutions (domestic and international), the media, insurance companies and relevant witnesses.

In regard to the original complaint about the lecturer's travel claim for a conference in Nottingham, England, Commission Investigators found that there was insufficient evidence to charge him with any criminal offences. Since the lecturer had resigned his position prior to this matter being investigated, the instigation of disciplinary proceedings was not possible.

The lecturer was later charged with nine offences to which he pleaded guilty. He was sentenced to 12 months' imprisonment (suspended for 12 months) on two counts of giving false testimony to the Commission; ordered to repay $1 1,400 to ECU; fined a total of $5,000 for three fraud offences and a total of $4,000 for four counts of opening accounts in a false name.

ECU has since implemented procedures to reduce the risk of fraud and has conducted staff training in regard to their responsibilities pursuant to the Corruption and Crime Commission Act 2003.

Strategic Partnerships and Liaison

The Commission may perform its misconduct function by consulting, cooperating and exchanging information with independent agencies, appropriate authorities and the persons listed in the Act, namely the:

Chief Executive Officer of the Australian Crime Commission; Commissioners of police forces of other states and territories; Commissioner of Taxation; Commissioner of the Australian Federal Police; Director General of the Australian Security Intelligence Organisation; and Director of Australian Transaction Reports and Analysis Centre.

In addition, the Attorney General can declare any person, authority or body of the state, the Commonwealth or another state or territory to be a person, authority or body with which the Commission can cooperate, consult and exchange information. The following persons, authorities and bodies have been declared:

Australian Customs Service; Commonwealth Ombudsman; Department of Fisheries (WA); Ombudsman (WA); Department of Justice (WA); Crime and Misconduct Commission (Qld);


42

Independent Commission Against Corruption (NSW); NSW Crime Commission; Police lntegrity Commission (NSW); Office of Police lntegrity (Vic); Ombudsman (NSW); Commissioner for Administrative lnvestigations of Victoria; Police Complaints Authority South Australia; Ombudsman (Tas); Ombudsman (SA); Ombudsman (NT); Office of Police lntegrity Victoria; and Australian Securities & Investments Commission.

The primary vehicle through which cooperation, consultation and exchange of information occurs is a Memorandum of Understanding (MoU). MoUs have been entered into with the following agencies:

Western Australia: Western Australia Police; Parliamentary Commissioner for Administrative lnvestigations (the Ombudsman); the former Department of Justice; and Department of Fisheries.

Commonwealth: Australian Customs Service;

0 Australian Crime Commission; Australian Federal Police; and Australian Transaction Reports and Analysis Centre.

Other States or Territories: Crime and Misconduct Commission (Qld); and Office of Police lntegrity (Vic).

Assistance to Other Agencies

The Commission has assisted other state and federal government agencies in the performance of their functions through the provision of access to its capabilities and facilities when appropriate.

For two days during November 2005, the Commission provided the use of its interview rooms to the Department of Planning and Infrastructure (DPI), which required the use of such purpose-built facilities for progressing a DPI investigation.

Towards the end of the financial year, the Commission provided specialised technical investigative assistance to a joint Western Australia Police and Australian Crime Commission organised crime investigation involving persons of interest in Western Australia.


43

THE PREVENTION AND EDUCATION FUNCTION

One of the Commission's three statutory functions is its prevention and education function. The Commission's Corruption Prevention, Education and Research Directorate (CPER) has the prime responsibility for the prevention and education function. It works with the public sector, local government and other government oversight agencies to achieve its outcomes.

Sessions, presentations and seminars: Metropolitan Regional

Total Corruption prevention materials deve~oped:~

Major Minor

Total Prevention and education inquiries:

Commenced In progress Completed

Research activities: Commenced In progress Completed

S.91(2)(c) Evaluation of responses to Commission recommendations Table 10: Key Corruption Prevention and Educa

Corruption Prevention and Education Activities Persons attending sessions:

Metropolitan Regional

Total

ion-Related Activ ties

2004-05

I ,300~

2 A breakdown of figures is not available for 2004-2005. 3 Major materials include research reports, DVDs and any item that requires comparable input due to size and effort of production including significant research, scripting and editing etc. Minor materials include brochures, broadsheets and similar items. 4 Major and minor materials were not categorised in 2004-05. 5 The oversight of agencies' implementation of Commission recommendations will occur as the recommendations mature. This necessitates sufficient time for agencies to address any recommendations and for the Commission to observe the effectiveness of any changes, which may involve periods of over 12 months.

200546

1,863 81 7

2,680


44

Overview of Activities

The CPER directorate was restructured to provide for an increase of 75 per cent in its staffing level, taking it to 14 full-time equivalent staff positions. This staffing increase will enable the Commission to shift its education focus to corruption resistance and to have a more comprehensive materials development programme.

Education Activities

This financial year, the Commission commenced a Rural and Regional Outreach Programme. Two corruption prevention and education consultants have been allocated to each of three regions: the North; the Midwest; and the South. These officers travel to the assigned areas, delivering presentations and developing relationships with local agencies.

The Northern Team made a preliminary visit to regional areas in the north of the state in November as a part of its Getting to Know You' series and returned to address specific agencies' matters of concern in March. These two visits have benefited both the agencies and the Commission in a region that is experiencing enormous growth, and subsequently, providing considerable challenges for public officers.

The Midwest Team conducted initial seminars in Geraldton and later returned for several days of tailored presentations to specific groups. The Commission intends taking a similar approach in the Goldfields and in the South during the next financial year.

Both the Northern and Midwest teams held a series of public forums aimed at raising awareness of corruption and misconduct issues among the broader community.

During the financial year, the Commission delivered 96 education seminars to 2,680 persons: 37 sessions in regional locations and 59 sessions in the metropolitan area. The activities of this period represent a substantial increase over those of the 2004- 2005 financial year, when approximately 1,300 persons attended 34 sessions.

The 'Risky Business' presentation, which was designed to increase agencies' awareness of their responsibilities for reporting misconduct to the Commission under the Act, has now been widely delivered across the public sector. The concentration of presentation resources has now begun to shift to more focused and customised sessions, pertinent to specific agency sectors and targeting particular misconduct risks and contemporary issues.


45

Ministerial Staff Briefings

In response to findings from Operation ~aka r ta ,~ during 2004-2005 the Commission developed an education programme for ministerial office staff to ensure they are aware of the misconduct risks and vulnerabilities associated with their work. Leading up to November 2005, the Commission delivered 12 briefings to 12 ministerial offices, attended by 168 staff members. The briefings consisted of a custornised version of the Commission's 'Risky Business' presentation and focused on notification requirements and identifying misconduct, as well as outlining the Commission's role and conduction a question and answer session. Emphasis was placed on ministerial officers being public officers.

Inquiries and Reviews

As well as conducting its own reviews and inquiries, CPER contributes to the reviews and investigations of other Commission directorates. This is generally in the form of research, corruption prevention analysis and relevant recommendations.

Protecting Personal Data in the Public Sector

The unauthorised access to and leakage of confidential information held by government agencies is a matter of concern for the Commission. A steady stream of complaints and notifications about such incidents indicated that the problem was widespread. In September 2005, the Commission released its report, 'Protecting Personal Data in the Public Sector'. Several public sector agencies were tested through field work and submissions were received from a number of other agencies and members of the public.

Additionally, a survey of over 500 public officers was conducted. Twenty-three recommendations were made. Most of these related to the conduct of individuals and how agencies security-screened and trained their staff; consolidating information security and privacy requirements in the Criminal Code, and agencies taking steps to reduce the opportunities for unauthorised disclosures.

Western Australia Police Property Management

Earlier this financial year, the Commission completed a major inquiry into the Western Australia Police's management of property. This inquiry was conducted jointly with Western Australia Police; a decision made because the police were similarly concerned about property management practices and because the Commission is of the opinion that, where possible, joint inquiries give agencies more understanding and 'ownership' of the recommendations. This collaboration resulted in a better use of resources, a greater acceptance of the recommendations by

6 Operation Jakarta was an early Commission investigation into allegations of misconduct by a senior ministerial staff officer.


46

Western Australia Police, and an increased understanding of the Commission's police oversight function.

The project was commissioned in response to concerns that property held by the Western Australia Police had been stolen or misplaced. One of the incidents that prompted this inquiry was the well-publicised theft of a significant amount of cannabis from the Fremantle Police Station in 2004. The project assessed the level of compliance with legislative and policy requirements and the adequacy of existing facilities, operational procedures and practices for managing private property. The resulting report, which made 42 recommendations, was tabled in Parliament on 19 December 2005.

Government Employees Housing Authority

The Commission's corruption prevention staff are engaged in a review of some of the policies and practices of the Government Employees Housing Authority (GEHA - now known as the Housing Authority). This is another collaborative project, developed from a recommendation resulting from a Commission investigation by its Operations Directorate into allegations that public officers may be receiving subsidies in the form of GEHA accommodation to which they were not entitled.

Oversight

Western Australia Police Reform

The Commission's oversight function of Western Australia Police Reform arose as a consequence of the recommendations of the Kennedy Royal Commission, but has developed into a more extensive evaluation of the ongoing changes. In order to facilitate the process and coordinate interactions between the two organisations, a Joint Agency Steering Group was established with Western Australia Police, which convenes regularly to discuss the police's ongoing reform. Having received and assessed the police's first report on its reform development progress, the Commission has finalised its first report. The Commission will undertake several more targeted reviews of policing matters, either independently or in collaboration with Western Australia Police.

Commission Recommendations

It is a requirement of section 91(2)(c) of the Act that the Commission reports on its 'evaluation of the response of appropriate authorities to recommendations made by the Commission'. On the completion of a number of serious misconduct investigations and reviews of agencies' complaint management processes, the Commission has made various recommendations in its reports to agencies for improvement of their systems and practices.


47

The Commission intends to review the acceptance and implementation of these recommendations as they 'mature' in order to establish their effectiveness in reducing public sector misconduct. This review process will generally occur at least 12 months after the relevant report is tabled in order to allow sufficient time for agencies to act upon the recommendations. This process will start in the 2006-2007 financial year.

Research Projects

The Commission is currently engaged in two research projects. Research undertaken by the Commission will generally be conducted in partnership with a university or a similar agency in order to apply the Commission's research resources effectively.

Surveying the Public Sector

Profiling the Western Australian Public Sector is a significant research project, commenced by the Commission in 2004-2005 and continuing through the current reporting period. It is aimed at establishing valuable base-line data about integrity and misconduct prevention strategies across the whole public sector. The Commission will use this comprehensive information resource to compile a number of reports about perceptions of misconduct in the public sector, organisational misconduct prevention strategies and ways that organisations can deal with misconduct. The survey has been conducted in two parts, focussing first on the chief executive officers of 237 organisations, and then on a large sample of over 1,000 employees. The Commission will use the results to compare survey data with that from the Independent Commission Against Corruption in New South Wales and the Queensland Crime and Misconduct Commission. The survey data will also inform the Commission's corruption prevention strategy by revealing trends, weaknesses and strengths in terms of misconduct and prevention in the public sector. There will be three reports from this research.

Partnership in National Whistleblower Research

The Commission is a partner investigator' in a jointly funded national research project Whistling While They Work: Enhancing the Theory and Practice of Internal Witness Management in the Australian Public Sector. This three-year project, which will conclude at the end of 2007, is significant in both its scale and the depth of the research planned. The project's aims are to develop strategies for the early detection of workplace misbehaviour and to reduce the political, organisational and human costs associated with whistle blowing. The research is being conducted with the Australian Research Council, several universities and integrity agencies throughout Australia, with the Commission contributing funding, resources and staff time to the project and facilitating and encouraging the involvement of Western Australian public sector organisations. In Western Australia, the Commission is working with Edith Cowan University in partnership with the Office of the Public Sector Standards Commissioner and the Ombudsman.


48

Provision of Corruption Prevention Consultancy

The Commission is developing its consultancy network to facilitate the easy and rapid delivery of advice to agencies on particular issues as they arise. Three teams of consultants have been allocated portfolios of agencies. These officers offer advice on corruption prevention strategies and individual matters. As part of the consultancy role, they visit agencies to work with relevant staff.

Where appropriate, Commission reports include corruption prevention recommendations or advice. These might be specific to one particular agency, or across related agencies. Where agencies are affected by Commission reports, staff are available to consult about the implementation of the Commission's recommendations.

Consultancy activities include providing information about corruption prevention strategies, undertaking systems reviews and working collaboratively with organisations in producing publications and materials.

The lntegrity Coordinating Group

The lntegrity Coordinating Group (ICG) was formed in 2004 to coordinate collaboration between the four state agencies responsible for the promotion of integrity in the Western Australian public sector. The members are the Auditor General, the Commissioner for Public Sector Standards, the Corruption and Crime Commissioner, and the State Ombudsman. The Chair of the group rotates between the Commissioners, the current chair during 2005-2006 being the Commissioner for Public Sector Standards.

The ICG developed and launched 'The Conflict of Interest Guidelines' as well as organised and hosted the conflict of interest forum with a visiting keynote speaker from the Crime and Misconduct Commission (Qld). The forum included a 'hypotheticals' panel and a DVD was subsequently produced.

Anti-Corruption Conference

The Commission, in conjunction with the Independent Commission Against Corruption (NSW) and the Crime and Misconduct Commission (Qld) has commenced planning to co-host the first Australian Public Sector Anti-Corruption Conference in Sydney in 2007.


49

Reports

The Commission has tabled five reports in Parliament during the 2005-2006 financial year7:

Protecting Personal Data in the Public Sector: Report of an Inquiry into Unauthorised Access and Disclosure of Confidential Personal Information Held on the Electronic Databases of Public Sector Agencies - tabled 29 September 2005. The report made 23 recommendations.

Report to the Joint Standing Committee on the Corruption and Crime Commission with regard to the Commission's Organised Crime Function and Contempt Powers - tabled 7 December 2005. The report made three recommendations.

Western Australia Police Property Management Practices: Report of a Joint Inquiry by Western Australia Police and the Corruption and Crime Commission - tabled 19 December 2005. The report made 42 recommendations across seven subject areas including: organisational; people; resourcing; practices; storage; systems; policy; and legislation.

Misconduct Handling Procedures in the Western Australian Public Sector: Department of Local Government and Regional Development - tabled 11 April 2006. The report made seven recommendations, one of which was for an improvement to internal Commission practices in cooperation with the department.

Report in the Matter of an Allegation of Public Sector Misconduct Concerning Mr John D'Orazio MLA - tabled 11 May 2006. The report contained the Commission's opinion that there was no evidence of misconduct in relation to the allegation that Mr D'Orazio engaged in misconduct during a meeting with Mr Adam Spagnolo and Mr Anthony Drago on 25 August 2003. Subsequently, the Commission decided to take no further action in regard to the allegation.

7 This is in addition to the 2004-2005 Annual Report.


50

One of the two main purposes of the Act, described in section 7A, is 'to combat and reduce the incidence of organised crime'. The Commission's organised crime function is the vehicle for pursuing this outcome. The function is performed through the authorisation and monitoring of the use of exceptional powers by the Western Australia Police, upon application by the Commissioner of Police. The Commission does not actively or in its own right investigate organised crime.

Exceptional Powers

On the Commissioner of Police's application, the Commission may, if it is satisfied that grounds, including the public interest, exist for the use of exceptional powers, make an 'exceptional powers finding'. This enables the Commission to facilitate the Commissioner of Police's organised crime investigation through the use of such powers that include examining witnesses before the Commission. The Commission's exceptional powers are described under Divisions 2, 3 and 4 of the Act and include: examination before Commission; enhanced entry, search and related powers; the use of assumed identities; and the conduct of controlled operations.

Fortification Removal Notices

The Commission, also upon application of the Commissioner of Police, may issue a 'fortification warning notice' if it is satisfied on the balance of probabilities that there are reasonable grounds for suspecting that particular premises are:

'heavily fortified; and habitually used as a place of resort by members of a class of people a significant number of whom may reasonably be suspected to be involved in organised crime' (section 68(2)).

There were no fortification warning notices applied for or issued during the period.

1 Organised Crime - Exceptional Powers 1 2004-05 1 2005-06 Section 46: Exceptional powers findings Section 68: Fortification warnina notice

I Section 48 (Section 96): summons witnesses to I

Table 1 I : Organised Crime Exceptional Powers

1 0 16

attend and produce things Total

8 Although one section 48 notice was applied for by Western Australia Police during the reporting period in relation to an exceptional powers finding made in the previous financial year, changing circumstances in the police's investigation resulted in the summons not being served and no examination being held.

0 0 1


5 1

17 1

Organised Crime - Emerging Issues

The effectiveness of the Commission's organised crime function has been a focus of considerable attention during the reporting period. The outcome of contempt proceedings in the Western Australian Court of Appeal highlighted concerns for limits on the Commission's exceptional powers in facilitating the investigation of organised crime. The Commission has reported to the Joint Standing Committee on the Corruption and Crime Commission in regard to its organised crime function and contempt powers, and has made a submission to the Attorney General's 'Review of Administration of Justice Legislation'.

Additionally, a review in 2007 of the operation and effectiveness of the Corruption and Crime Commission Act 2003 (which is required by the legislation) will include consideration of whether the Commission's Act should be amended to include, among other things, the Commission having an investigative crime function and whether it should take over the confiscation of proceeds of crime from the Director of Public Prosecutions.

In its Report No. 10, 'Interim report on amendments to the Corruption and Crime Commission Act 2003, the Joint Standing Committee recommended, among other things, that the Act's definition of 'organised crime' be amended to reflect that of Queensland's Crime and Misconduct Act 2001. The Committee signalled its intention to table a final report by May 2007.

The Commission has continued to encourage the Western Australia Police to make greater use of the exceptional powers available under Part 4 of the Act.

During the financial year, the Commission responded to a request to provide assistance in the conduct of a joint Western Australia PoliceJAustralian Crime Commission organised crime investigation undertaken in Western Australia. This involved the application of the Commission's specialist technical investigative resources, tasked to achieve an operational objective requiring approximately 290 staff hours.


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Legal Services Directorate

While the Commission's Legal Services Directorate has a support or enabling function, it performs a critical role with regard to the operation of the Commission. As well as operational legal services, it provides legal advice and support to the Commissioner, the Executive Director, Directors and other oficers across all functions and activities of the Commission. Such advice comprises matters of risk management, corporate governance, accountability and compliance.

As a result of a structural review of the Legal Services Directorate during 2004-2005, an additional position (Senior Lawyer) was assigned to the directorate. The Legal Services Directorate has now achieved its full staff complement comprising a director, a senior lawyer, two lawyers and a paralegal.

Recommendations for Changes to the Law

Section 91 (2)(q) of the Act requires the Commission to report 'any recommendations for changes in the laws of the State that the Commission considers should be made as a result of its functions'. Additionally, section 226 of the Act requires the Attorney General to undertake a review of the operation and effectiveness of the Act, which should occur in early 2007. While all parties concerned remained cognisant of the statutory requirement to review the Act, there has been significant activity during the reporting year concerning proposed changes to the legislation that affects the Commission's functions.

On 16 November 2005, the Commission met with the parliamentary Joint Standing Committee on the Corruption and Crime Commission to discuss possible amendments to the Commission's organised crime and contempt powers. This followed from the Commission's 2004-2005 Annual Report where the need for amendments to the Act and other legislation was identified. The Commission's primary concerns were its lack of legislative authority to investigate organised crime; and the definitions of brganised crime', 'public officer' and misconduct'. The Joint Standing Committee resolved to conduct an 'Inquiry into legislative amendments to the Corruption and Crime Commission Act 2003', the terms of which it reported to Parliament on 17 November 2005 in its Report No. 3.


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The Commission tabled its Report to the Joint Standing Committee on the Corruption and Crime Commission with regard to the Commission's Organised Crime Function and Contempt Powers' on 7 December 2005, containing recommendations including:

the provision of authority to conduct organised crime investigations in joint task force arrangements with Western Australia Police and other law enforcement agencies; the amendment of the definition of 'organised crime'; and the amendment of the Commission's contempt powers.

On 7 December 2005, the Attorney General commissioned a Review of Justice Legislation, including the Corruption and Crime Commission Act 2003. The Commission made submissions to the review on 20 January 2006, including expanding on the recommendations for amendments previously proposed in its 2004-2005 Annual Report and in its report to the Joint Standing Committee.

On 29 May 2006, the Joint Standing Committee resolved to conduct an 'Inquiry into the future operations of witness protection programmes in Western Australia', and on 15 June 2006, tabled its Report No. 9, which described the terms of reference for the inquiry. Section 226 of the Act describes, in addition to any other matters determined by the Minister, certain specific issues that are to be considered for amendment in the review of the Act, including the Commission performing a witness protection function (section 226(l a)(f)).

On 22 June 2006, the Joint Standing Committee tabled its Report No. 10, 'Interim report on amendments to the Corruption and Crime Commission Act 2003', which contained 10 recommendations for changes to the legislation that it identified as 'being of such urgency and common sense that they should be addressed by Parliament expeditiously' (p. ix). The Joint Standing Committee indicated that it hoped to table a final report on the organised crime and contempt provisions in the Parliament by December 2006.

The Commission awaits the conclusions and recommendations of the Joint Standing Committee's inquiries, which, in conjunction with the Attorney General's reviews, should provide a clear position for any recommended future amendments to the Act.


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Business Services Directorate

The primary focus for the Business Services Directorate during the reporting period has been the continued development and refinement of services that support the Commission's activities in the areas of Finance and Administration, Human Resources, lnformation Technology and Communications, lnformation Management, and Security. The transition of the Electronic Collection Unit (ECU) into the directorate was completed, and during the transition the ECU was restructured and a range of administrative changes initiated. These changes, along with others made following the transition, have resulted in greater efficiency and effectiveness for this critical operational unit.

The Business Services Directorate has continued to assist in the recruitment of officers to positions within the Commission to bring the total staff numbers into line with the approved establishment figures. A number of key programmes and policies have also been developed and implemented for Commission staff. These include a mentoring programme; a wellness programme; a Commission Code of Conduct programme; an occupational health and safety programme; an equity and diversity programme; and a study scholarship programme.

lnformation Technology and Communications

The Commission continued to build on its information technology infrastructure, with protecting the integrity of its network and electronic holdings specifically being a high priority. A significant number of projects, including the implementation of a Financial Management lnformation System and a Human Resource lnformation System, were completed.

Other projects initiated and achieved include a review of the Commission's network and security measures, the replacement of 33 per cent of the Commission's workstations, an upgrade of the Commission Electronic Document Management System, a laptop replacement program, and the implementation of a corporate tape backup library solution.

The foundation of the Commission's Case Management and Intelligence System was also completed, with hardware architecture, database construction and support, application implementation, data security and storage capacity taken into consideration during establishment.

Commission Industrial Agreement

Following extensive consultation with staff and the Civil Service Association, the Commission's first industrial agreement was registered with the Industrial Relations Tribunal on 19 January 2006. The agreement is for two years.


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Accommodation

The Commission has recently completed its first year of operations within its new premises at 186 St Georges Terrace. During the year, fit-out adjustments were undertaken to modify the building's internal structure to meet layout and functionality requirements.

Media Liaison

During the 2005-2006 financial year the Commission released 36 media statements and dealt with several high profile matters that attracted considerable media interest. This interest contributed to the more than 800 media mentions the Commission received during the period.

This high level of public interest is recognised by the Commission, which tries to cater for the requirements of the media where possible. However, there are necessary limitations on media contact, such as the necessity to protect the integrity of an investigation and to protect the reputation of innocent people where an allegation has been made against them. In the latter case, the Commission has a general policy of not confirming or denying whether or not it is looking at a particular matter. This is because during the early stages of an investigation, allegations may be untested and publicly confirming that an individual is being investigated could unfairly harm the person's reputation. The most appropriate time for the Commission to comment on any particular case is at the completion of an investigation.

The Media and Liaison Coordinator may be contacted on (08) 921 5 4802.

OUR PEOPLE

Experienced staff with specialist skills are required by the Commission to meet the expectations of Parliament. These include investigators, solicitors, financial analysts, intelligence analysts, social scientists and administrators. Consequently, the Commission's employee profile, especially in terms of employment levels, differs from the public sector norm.

Since its establishment in January 2004, the Commission has steadily increased its staff numbers and is now operating within the approved staffing level of 153 positions. Commission officers have been recruited from a wide field (including interstate and overseas) in accordance with the Western Australian public sector recruitment and selection conventions. The Commission has engaged several short- term staff for discrete projects relating to the completion of its establishment. This has ensured the most effective utilisation of its approved salary expenses prior to the completion of processes for the filling of its long-term vacancies. The extensive recruitment activity associated with establishing the Commission is in its final stages, and further recruitment will now be associated with natural attrition.


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Employee Profile

The Commission's establishment staffing level remains 153 full-time equivalent positions. During the 2005-2006 financial year the Commission finalised its establishment recruiting and has operated at an average headcount of 146.2 in the six months to 30 June 2006. All employees are employed on contracts of up to five years, pursuant to the Corruption and Crime Commission Act 2003. Table 12 shows the Commission's staffing level at 30 June 2006.

Directorate

Executive

Operations Corruption Prevention Education and Research

- .

(Note: Short-term contracts are of six months or less; long-term contracts are between six months and five years, the maximum period permitted by Section 210(2) of the Act).

Legal Services Business Services Total

The Commission employs staff under the classification scales prescribed in the Government Officers Salaries, Allowances and Conditions General Agreement 2004, ranging from Level 2 to Class 1 and above. The following table represents the level and gender of staff at each level at 30 June 2006.

2005-06

-

1.0 7.0 8.0

2004-05

2 2

Short Term

0

Table 12: Employee Profile - Long- and Short-term Staff Positions

0 7 11

70 7

Level


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Long Term

7

2.8 43

129.8

Class 1 and above Total

Total

7

72 9

2004-05 Female I Male I Total

1 2: 1 7413 T; 2.8 50

140.8

2005-06 Female I Male I Total

Table 13: Distribution of Positions by Level and Gender

3

53.8

- 0.0 3.2 6.8

7

87

5.8 -- 48.3

144.8

10

140.8

- 5.8 51.5 151.6

-

2 -

57.6

6 -

8 -

94 151.6

The Commission's structure includes a relatively high proportion of Level 6 positions and above. The nature of work at the Commission requires these higher classifications, for the engagement of experienced practitioners in the specialist areas of investigation (both covert and overt); law; analysis; and research and development. As a result of these professions comprising the core service units within the Commission, the profile of positions within the Commission's establishment is unique in the Western Australian public sector and it is not easily comparable with other generalist public sector agencies. Of the most senior positions, at the executive level, two of the Commission's four directors are female.

Employee Welfare

The Commission launched a Wellness Programme to employees during 2005-2006. The Wellness Programme seeks to embed a culture of healthy lifestyle and is part of the Commission's strategy to be a 'preferred employer'. The programme uses a number of initiatives at low or no cost to employees. A wellness calendar has been developed to promote at least one wellness activity each month.

Initial services provided to staff include:

flu vaccinations; healthy heart checks; seminars on healthy eating and controlling stress; and healthy activities.

The success of these activities will be evaluated through voluntary health assessments to be conducted in 2008.

The Commission continues to offer staff and families access to welfare services via the Commission's Employee Assistance Program (EAP). The EAP provider provides confidential counselling and brief therapy services to staff as required.

Occupational Safety and Health

The Commission's Occupational Safety and Health Planning and Advisory Group's (OSHPAG) focus is the provision of a hazard-free work place for Commission employees. Significant work completed during the year has been the delivery of training and information sessions to all staff on the OSH program, and the commencement of regular hazard inspections and associated remedial actions. An Emergency Procedures Guide has been developed for roll-out to staff in the new financial year.

The OSH Representatives are trained in accordance with the Occupational Safety & Health Act 1984 and are provided with ongoing advice from an external service provider.


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Workers' Compensation

As at 30 June 2006, three claims for workers' compensation had been lodged with the insurer for the year. One claim remains in dispute (although denied by the insurer) at the end of the financial year. There were no cornpensable lost-time injury claims for the period.

COMPLIANCE STATEMENTS

The following compliance statements and information relate to the five strategic goals for government identified by Better Planning, Better Services: A Strategic Planning Framework for the Western Australian Public Sector. Each goal is supported by a set of strategic outcomes that contribute towards the achievement of the government's v i ~ i o n . ~ The Commission's activities towards achieving its specific agency level government-desired outcomes receive additional attention in the Performance Assessment section of this report.

Goal I : People and Communities 'To enhance the quality of life and wellbeing of all people throughout Western Australia. '

Disability Access and Inclusion Plan Outcomes

The Commission presently meets the five key outcomes required under the Disabilities Services Act 1993 and continues to assess appropriate strategies and processes to ensure continued compliance. The Commission's premises at 186 St George's Terrace, Perth, have been designed to provide ease of access and facilities for people with disabilities.

The Commission has workplace inspections to ensure compliance with the Occupational Safety & Health Act 1984. Inspections are conducted on a regular basis by trained OSH Representatives. The Commission is currently reviewing the services and information it provides in order to establish the extent to which it continues to meet the State Government Access Guidelines for Information Services and Facilities.

Cultural Diversity and Language Services Outcomes

In circumstances where a person from a non-English speaking background is required to be interviewed or to give testimony, the Commission requires that the services of an interpreter be obtained. In addition, a language services survey of

9 'Western Australia will be a creative, sustainable and economically successful State that embraces its multicultural heritage and its rich natural resources. It will provide the best opportunities for current and future generations to live better, longer and healthier lives': Department of the Premier and Cabinet, Better Planning, Better Services: A Strategic Planning Framework for the Western Australian Public Sector (2003) 4.


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employee language capability has occurred in order to establish an internal translation resource. The Commission maintains a Language Services Register detailing relevant employees, the languages they speak and their level of fluency.

Youth Outcomes

The Commission has launched the Commission Equity and Diversity Plan 2006- 2008. One of the areas of focus in the plan is youth, consisting of persons under the age of 25 years. Youth comprises 6.4 per cent of the total Commission workforce. Three university graduateshear graduates in this age bracket were engaged during 2005-2006.

Goal 2: The Economy 'To develop a strong economy that delivers more jobs, more opportunities and greater wealth to Western Australians by creating the conditions required for investment and growth. '

The Commission's role, of improving continuously the integrity of the public sector and reducing the incidence of misconduct in it, is clearly focused on increasing the confidence of Western Australians in the public sector. This in turn contributes to a strong economy.

The Commission's employment of its resources in the delivery of its services is undertaken with due diligence. Efficiencies are sought in the expenditure of its budget appropriation to ensure that its effective and resourceful application is achieved.

In 2005-2006 the Commission's capital works programme was reviewed during the mid-year review process and amended from $1 1.955 million to $9.359 million, including a carryover of $3.7 million from 2004-2005. As a result of the review, the Commission reduced its forecast requirements for capital contributions by $10.349 million for the current budget and the forward estimates period.

The Commission's certified financial statements are located at the end of this report.

Goal 3: The Environment 'To ensure that Western Australia has an environment in which resources are managed, developed and used sustainably, biological diversity is presewed and ha bifats protected. '

Waste Paper Recycling

The Commission produces highly confidential and sensitive information, much of which is classified as "HIGHLY PROTECTED'. It is a Commission policy to shred printed waste paper before recycling. The Commission's commitment during the year to recycling includes:


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All printer and photocopier recyclables, are recycled with a total of 60 kg being recycled over any three-month period; The Commission's eight recycling bins enabled a total of 11,570 kg of waste paper to be recycled; and The Commission purchases all recycled paper through the Common Use Arrangements under State Supply Commission guidelines.

Energy Smart Government Policy

The Commission has had to defer its participation in the Energy Smart Government Baseline (ESG) programme as the building fit-out work was only completed in August 2006. Following the completion, the Commission is developing a programme to monitor energy use, both within the building and externally, such as for transport.

As part of the design of the new office accommodation, project managers considered the use of efficient energy features in the design. These included the use of lighter colours to enhance the reflection of light, installation of sensor lights in storerooms, rack rooms, offices and meeting rooms to prevent energy waste, and the installation of energy efficient drinking water appliances.

Energy consumption for the past 12 months has been monitored since the Commission moved to new and larger premises at 186 St Georges Terrace. As part of the sustainability programme, further monitoring and management of the Commission's energy consumption will take place in the coming year.

Goal 4: The Regions 'To ensure that regional Western Australia is strong and vibrant. '

Regional Development Policy

The Commission delivers its services across the state by ensuring accessibility to both misconduct reporting mechanisms and corruption prevention education activities. Members of the community may report misconduct through a variety of means such as by attending the Commission's offices in Perth or by telephone (including a toll-free number for non-metropolitan callers), email, fax, letter or via the Commission's online presence.

This year the Commission commenced a Rural and Regional Outreach Programme, which has been developed to ensure that the provision of consultancy services in corruption prevention themes is available across the state. Commission officers have travelled to various regional locations, established relationships with the local branches of public sector agencies and delivered seminars and supporting materials to increase the public sector and community's knowledge of corruption risks in their regions. During the year, 37 presentations were delivered to over 800 regional public sector officers, which included discussion of specific issues that are faced by particular regional communities. The Commission has visits planned for the


6 1

remaining regional areas and is committed to further developing its relationships with all regional-based public sector agencies and communities.

Goal 5: Governance 'To govern for all Western Australians in an open, effective and efficient manner that also ensures a sustainable future.'

Evaluations

No evaluations were undertaken in relation to section 7(e) of the Public Sector Management Act 1994.

Information Statement

The Commission is an exempt agency for the purposes of the Freedom of Information Act 1992 (FOI Act), and is not required to provide an information statement in accordance with sections 96-97 of the FOI Act. Despite being an exempt agency, the Commission endeavours to make as much information available as is possible to interested parties, consistent with operational requirements, statutory non-disclosure requirements, and the objectives of the commission.

Record keeping Plans

The following information is supplied in compliance with section 19 of the Sfafe Records Act 2000, which requires that each agency have a Record Keeping Plan.

In its second year, the Commission continued to improve its records management processes. During the reporting period, the Commission continued to refine the implementation of the Commission's Electronic Document Management System (EDMS), 'Objective'. The Commission is committed to providing ongoing training to staff in the use of Objective and, more importantly, records management in the state public sector.

The Commission has developed a draft Retention and Disposal Authority that will allow effective management of its holdings into the future in accordance with Principle Five of the Record Keeping Plan.

Advertising

Section 175ZE of the Electoral Act 1907, requires the Commission to report expenditure incurred during the reporting period in relation to advertising and sponsorship. The tables below detail the expenses incurred by the Commission for 2005-2006 financial year.


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The breakdown in relation to the recruitment and advertising costs is shown in the table below.

ExpenseType Advertising Agency Market Research Organisations Polling Organisations Direct Mail Organisations Media Advertising Organisations Total Expenses

Cost ($1 Nil Nil Nil Nil 61,302 $61,302

Table 14: Advertising and Sponsorship Costs

Supplier Marketforce The National Pages Direct Telstra Directory Australian Government Directorv

1 $61,302 Table 15: Recruitment and Advertising

Cost ($) 57,715 390 91 7 700

Government Education and Business Directory Regional Advertising (Newspapers)

Sustainability

695 885

Premier's Circular 2004114 (27 September 2004) requires that all Departments of State and Senior Executive Service (SES) organisations comply with the State's Sustainability Code and Practice and develop a Sustainability Plan by 31 December 2004 and report on progress of the implementation in annual reports from the year ending June 2005.

While non-SES organisations are not required to comply with the Code, they are encouraged to do so. The Commission has agreed to establish a Sustainability Action Plan voluntarily. However, this was deferred to the 2006-2007 financial year on the basis that the Commission moved into new purpose-built premises in May 2005 and is currently reviewing all policies and procedures; in particular, those that apply to energy use, water saving, fleet management and sustainable travel.

Notwithstanding this, it should be noted that the fit-out of the building at 186 St Georges Terrace was designed with features based on the Western Australian Government's Sustainability Plan and principles. Water devices have inbuilt controls to minimise waste. The vehicle fleet is under review and a conscious effort has been made by the Commission to introduce four-cylinder vehicles into the fleet. Lighting in the building is largely sensor-controlled by movement.

The Commission's operations support sustainability and it encourages its employees to support the sustainability principles.


63

Equal Employment Opportunity Outcomes

The Commission has launched its Equity and Diversity Plan 2006-2008, which was developed by the Equity and Diversity Group established in June 2005. The group comprised staff from across all areas of the Commission.

The Commission has adopted a format based on three broad outcomes as recommended by the Office of Equal Employment Opportunity (EEO) for the public sector:

The organisation values EEOIdiversity and the work environment is free from racial and sexual harassment. Workplaces are free from employment practices that are biased or discriminate unlawfully against employees or potential employees. Employment programmes and practices recognise and include strategies for EEO groups to achieve workforce diversity.

The strategies and actions under each of these outcomes have been developed specifically for the Commission.

The Commission's focus in terms of the Equity and Diversity Plan is on:

women in management; youth; and people from a culturally diverse background.

The Equity and Diversity group meet throughout the life of the plan to ensure the strategies and actions are achieved and monitored.

In 2008 the Commission will undertake a comprehensive performance audit of awareness, strategies and outcomes of the Equity and Diversity Plan.

Public Sector Standards and Ethical Codes

The Commission complies with the Public Sector Code of Ethics, and the Public Sector Standards in Human Resource Management. The tenets of each of these documents are embedded in the content of the full suite of human resource policies developed and reviewed throughout the year.

Compliance with Human Resource Management Standards

The Human Resources Branch has finalised a comprehensive range of policies during 2005-2006 to ensure consistency and compliance with standards in human resource activities. Of these, the following new policies relate specifically to matters covered by human resource standards:

grievance resolution. prevention of harassment and bullying in the workplace.


64

The development of these policies is in line with the overall strategy for human resource management in the Commission as detailed in the Commission Human Resource Strategic Plan 20052007 and the Commission Human Resource Business Plan 2005-2007.

Compliance with Ethical Codes

The Public Sector Management Act 1994 (PSMA) requires all public sector employees to comply with the Western Australian Public Sector Code of Ethics (Code of Ethics). Under section 9 of the PSMA, employees must comply with the Code of Ethics and the Code of Conduct. The Commission launched the Code of Conduct in July 2006.

The Code of Ethics sets out the ethical standards expected by the community. Typically these standards are broad and general. The Code of Conduct takes the Code of Ethics one step further, providing details about how the Commission complies with the Code of Ethics in a more practical sense. It provides guidance on the expected behaviours of employees as they conduct their day-to-day work, and what to do when faced with an ethical issue.

Recruitment and Appointment

Staff of the Commission can be appointed for a term not exceeding five years and are generally eligible for reappointment. During 2005-2006, the Commission advertised 39 long-term positions (contracts of more than six months) in accordance with the Human Resource Standard in Recruitment, Selection and Appointment.

No claims of a breach of this standard were lodged against the Commission during the period.

Other Standards

The Commission received no claims against the following standards:

transfer; secondment; performance management; redeployment; discipline; termination; and temporary deployment (acting).

The Commission received one claim against the grievance resolution standard. This matter has since been closed.


65

Corruption Prevention

The Commission has finalised its Corruption Prevention Plan as required under Premier's Circular 2005102 (March 2005), identifying misconduct threats to the integrity of employee, financial, human resource and operational areas. The plan describes the Commission's policies, conduct and actions that are implemented to mitigate the identified threats. The plan was developed with the assistance of the Commission's own Corruption Prevention Education and Research staff, who provide a similar consultative service to government agencies. A copy of the plan is available on the Commission intranet for all employees. Before staff are employed at the Commission they are security vetted to the minimum standards of the Commonwealth Attorney General's Protective Security Manual, and the Commission's recordkeeping and communication systems function in a very secure environment with strict access and audit functions.

The Commission's policies and procedures ensure compliance with the Financial Administration and Audit Act 1985 and associated Treasurer's Instructions. Policies cover issues such as gifts, portable and attractive items, procurement and purchasing, use of corporate credit cards, cab charges and asset procurement.

Public lnterest Disclosures

The Public lnterest Disclosure Act 2003 (PID Act) requires the principal executive officer of a public sector agency to designate a person responsible for receiving disclosures of public interest information (PIDs), provide protection to internal whistleblowers and publish internal procedures relating to the authority's obligation under the PID Act. These requirements have been met as well as the annual provision of information to the Commissioner for Public Sector Standards required under section 23(l)(f) of the PlD Act.

Ms Tracey Weston, a commission solicitor, was the person designated as responsible for receiving PlDs from 1 July 2005 until 23 February 2006, when Mr Michael Cashman, Director Legal Services, took over the role. One internal PID was made during 2005-2006.

In addition to its obligation as a public authority, the Commission is a proper authority for the purposes of section 5(3)(a) and 5(3)(d) of the PID Act. In that respect, any person can make a PID to the Commission where the PID relates to an act or omission that constitutes an offence under a written law andlor where the PID relates to a police officer.

There was one PID made to the Commission in its capacity as a proper authority in the period to 30 June 2006. Information about these PlDs was also provided to the Commissioner for Public Sector Standards under section 23(l)(f) of the PID Act.


66

During the reporting year, the Commission developed its Outcome Based Management structures in accordance with Better Planning, Better Services: A Strategic Planning Framework for the Western Australian Public Sector. The process involved liaison with the Department of Treasury and Finance and the Office of the Auditor General in the development of the Commission's Agency Level Government Desired Outcomes and Key Performance Indicators (KPls) of effectiveness and efficiency for the measurement of the delivery of its services. These structures received the endorsement of the Outcome Structure Review Group and the new KPls are reported against for the first time in this annual report in accordance with Treasurer's Instruction 904.

The 2005-2006 reporting period will provide a baseline for future comparative measures of the Commission's performance. As a recently established agency, the Commission has determined measures that will be increasingly useful as it matures. The measures are intended to assist the Commission to assess the level of incidence of misconduct within the public sector, as well as the public sector's knowledge of how to manage and prevent its occurrence, and to gauge the Commission's performance in assisting the Western Australia Police to combat organised crime. As its gains experience, these measures may be refined to reflect a growing knowledge of the issues within our jurisdiction and the impact of the initiatives implemented by the Commission.

The Commission's performance against its recently established KPls will assist in the setting of performance targets for future years. Because it is the first occasion that the KPls have been used, performance targets were not set or reported in this annual report.

The Commission's services are prescribed by the Corruption and Crime Commission Act 2003 as functions of the Commission. These three services directly relate to the Commission's Agency Level Government Desired Outcomes, which in turn are clearly linked to the Strategic Outcomes of the Goals for Government in the Outcome Based Management Strategic Planning Framework.

Measuring Our Performance

The Commission has measured its performance through a combination of the application of internal statistical data and the analysis of survey-based questionnaires. The relevant statistical data have been extracted from internal management systems and complement the use of objective survey data.

This is the first time that the Commission has gathered this information for application to KPls, and the data utilised in this capacity is derived from systems that are not primarily designed to capture such performance measurement data. The Commission intends to refine its data collection processes as it gains experience, including through the implementation of a case management system early in 2006-2007. The


67

application of further external stakeholder surveys is being considered for future reporting periods.

Outcome Based Management

Goal: Governance 'To govern for all Western Australians in an open, effective and eficient manner that also ensures a sustainable future.'

Strategic Outcomes: 'Greater community confidence in the processes and actions of government agencies through effective independent oversight bodies. ' 'Reduced incidence of corruption in all its forms. '

Agency Level Government Desired Outcome: The public sector is better able to prevent misconduct.

Service One: Corruption prevention and education programs, reviews and consultancy services to the public sector (prevention and education function).

Agency Level Government Desired Outcome: The public sector is better able to deal with misconduct.

Service Two: Oversight and conduct of public sector misconduct investigations (misconduct function).

Goal: People and Communities 'To enhance the quality of life and wellbeing of all people throughout Western Australia.'

Strategic Outcome: 'Safe and secure Western Australian communities. '

Agency Level Government Desired Outcome: Organised crime is combated and its incidence reduced.

Service Three: Facilitation of investigations into organised crime (organised crime function).


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Effectiveness Indicators

Outcome: The public sector is better able to prevent misconduct

Table 16: Effectiveness Indictors: Service One

Effectiveness Indicator The proportion of the public sector assessed by the CCC to be well- informed about corruption risks.

This agency level outcome is derived from section 17(1) of the Corruption and Crime Commission Act 2003, which states that '[tlhe Commission has a function (the "prevention and education function") of helping to prevent misconduct'. It consequently constitutes a core element of the Commission's business entailing the application of a significant portion of staff and resources. For additional information refer to 'The Prevention and Education Function' section of this report.

2005-06 97%

The Commission is continuing to develop its knowledge about the public sector's level of comprehension of corruption risks and resilience. The relevant data are gathered primarily in the course of the assessment of the corruption prevention status of individual agencies; however, the effectiveness indicators associated with this outcome serve to identify the level of the wider public sector's corruption prevention 'health'.

The proportion of the public sector assessed by the CCC to be well- informed about corruption risks

The first effectiveness indicator is measured by survey and demonstrated by the ratio of individual public sector employees participating in the Commission's corruption prevention workshops who report that they are well-informed about corruption risks as a result of their attendance. Feedback from attendees resulted in 97 per cent believing that they were well-informed about the corruption risks in their workplace.

Outcome: The public sector is better able to deal with misconduct

Ratio of misconduct allegations to FTEs 1

Effectiveness Indicator Proportion of investigation reviews where investigations completed meet the appropriate standard

200546 98%

I

Table 17: Effectiveness Indicators: Service Two

Ratio of substantiated misconduct allegations to total misconduct allegations

This agency level outcome is derived from section 18(1) of the Corruption and Crime Commission Act 2003, which states that '[ilt is a function of the Commission (the

1:4.5

"misconduct function") to ensure that an allegation about, or information or matter


69

involving, misconduct is dealt with in an appropriate way'. Due to the nature of this outcome, its associated service is allocated the largest proportion of the Commission's staff and resources. For additional information refer to 'The Misconduct Function' section of this report.

Through a combination of the Commission's working relationships with those responsible for complaint handling within public sector agencies and the provision of corruption prevention education services across the jurisdiction, the Commission is increasingly improving its ability to assess the public sector's capacity to deal with misconduct effectively. The effectiveness indicators associated with this outcome are intended to provide the Commission with a picture of the level of misconduct that is occurring within the public sector and agencies' abilities to adequately deal with misconduct complaints.

4 Proportion of investigation reviews where investigations completed meet the appropriate standard

The first effectiveness indicator is measured through the process of the Commission's review of misconduct investigations undertaken by public sector agencies. This is a core and significant activity. An investigation completed to the 'appropriate standard' is one with findings and recommendations that are relevant and appropriate, and that is conducted using Australian Complaint Handling Standard (AS 4269-1995) as a guide.

The Commission's reviews of agencies' investigations concluded that, during the financial year, 98 per cent met the appropriate standard. Those agency investigations that fail to meet the standard are returned to the relevant agency, along with appropriate advice, for resubmission. It is the Commission's expectation that this percentage will gradually increase as a result of liaison between agencies and the Commission's complaint review unit.

Ratio of misconduct allegations to FTEs

The second effectiveness indicator measures the complaints received by the Commission in relation to the total number of public sector full-time equivalent (FTE) employees. It provides a snapshot of misconduct allegations across the wider public sector. The Commission's current jurisdiction is approximated as 125,000 public officers for calculation purposes. This figure includes public sector officers, university staff and local government councillors and employees.

This measure is a product of the Commission's analysis of misconduct allegations across the public sector. For its strategic purposes, the Commission divides its jurisdiction into agency sector groupings. The ratio of misconduct allegations received relating to specific agency sectors is calculated by dividing the number of agency sector FTE positions by the number of allegations received, resulting in a number of employees per allegation. This ratio may assist in the identification of high or low incidences of reported alleged misconduct and potential misconduct trends within particular agency sectors. During the reporting period, the Commission received one allegation of misconduct for every 53 public officers.


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The analysis of movement in this effectiveness indicator is complex in the short-term. Potentially, through the Commission's efforts in increasing agencies' awareness of what constitutes misconduct and how it should be reported, the number of allegations may increase. The Commission's prevention and education activities, combined with the deterrent effect of convictions against charges laid by the Commission, may influence a reduction in the actual incidence of misconduct and subsequently decrease the number of allegations. This measure will develop as the Commission continues its work with the public sector; however, in the long-term, ideally the Commission would aim to achieve the receipt of fewer complaints due to a lower incidence of misconduct.

Ratio of substantiated misconduct allegations to total misconduct allegations

The ratio of substantiated misconduct allegations to total misconduct allegations KPI assists the work of the Commission in several ways. First, it provides an indication of the actual incidence of misconduct within the public sector. The Commission relies upon information or evidence being brought to its attention or uncovered through its own investigations. Therefore, the Commission can never be assured that it has addressed every relevant misconduct incident that may have occurred. However, this measure provides the closest estimation of actual misconduct occurrence.

Second, it assists the Commission in the assessment of agencies' misconduct reporting standards and of complainants' knowledge of what constitutes misconduct. An increasingly high relative proportion of substantiated allegations may indicate that both agencies and complainants have a maturing knowledge of what matters are appropriate to report and are within the Commission's jurisdiction.

Finally, the Commission uses this KPI as an internal strategic measure to provide an insight into the incidence of actual misconduct within the various agency sectors and their relative proportions within the wider public sector.

In the year to 30 June 2006, 461 misconduct allegations were substantiated. This figure constitutes the known incidences of public officer misconduct for which investigations were completed by agencies during the year. This is equivalent to one in every 4.5 misconduct allegations within the public sector being substantiated and equates to 22 per cent of all allegations.


7 1

Qutcome: Organised crime is combated and its incidence reduced

Effectiveness Indicator 1 200546 The proportion of applications for exceptional powers findings and fortification warning notices sought, approved and monitored

Table 18: Effectiveness Indicators: Service Three

NIA

The proportion of organised crime matters where the use of exceptional powers contribute to a resolution

The KPls for this outcome and Service Three (Facilitation of investigations into

N/A

organised crime) have been reported as NIA (noi applicable) for the financial year because there was no significant, tangible activity relating to exceptional powers findings or fortification warning notices that could be reported.

This agency level outcome is derived from one of the Commission's two main purposes, 'to combat and reduce the incidence of organised crime' (section 7A(a) of the Act). Section 21 states that the Commission has the 'organised crime functions set out in Part 4' of the Act. These functions include the approval for the use of exceptional powers by police (section 46) and the issue of fortification warning notices (section 68) upon the application of the Commissioner of Police. Consequently, the value of the associated effectiveness indicators depends upon the receipt of applications from the Commissioner of Police. Due to the Commission's restricted role in facilitating the Western Australia Police's organised crime investigations (that is, effectively performing a 'gatekeeper' function), the service associated with this outcome requires significantly fewer resources than the other two services. For additional information refer to 'The Organised Crime Function' section of this report.

No fortification warning notices were applied for or issued, nor have any organised crime examinations occurred, during the current financial year. One section 48 notice was applied for by WA Police in relation to a section 46 exceptional powers finding made in the previous financial year; however, the resulting summons was not served by the police because of changing circumstances in its investigation.

The Commission has continued to encourage the Western Australia Police to make greater use of organised crime functions available under the Act.


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Efficiency Indicators

Service One: Corruption prevention and education programs, reviews and consultancy services to the public sector (prevention and education function)

Average cost per person educated in the regions 1 $642

Efficiency Indicator Average cost per person educated in the metropolitan area

200546 $1 15

Average cost per major inquiry or review conducted $147,870

Average cost per minor inquiry or review conducted

Table 19: Efficiency Indicators: Service One

NIA

Average cost per major education material produced

Average cost per minor education material produced

Average cost per person educated in the metropolitan area Average cost per person educated in the regions

$37,34 1

$7,468

These two efficiency indicators allow the Commission to measure the costs associated with delivering its corruption prevention and education services to the public sector. As shown in Table 19, the average cost per person educated in the Perth metropolitan area was $1 15 as opposed to $642 per person in the regions. The travel and accommodation costs associated with providing corruption prevention and education services to public officers in regional locations largely account for this difference.

The Commission expects that the increased delivery of targeted education services specifically addressing smaller and selected groups will result in a rise in the average cost of educating a public officer in the metropolitan area in the short-term. This should be contrasted with the more general open presentations delivered to large audiences in this and the previous reporting year for the purpose of introducing the Commission and its functions to the public sector.

The Commission acknowledges the importance of ensuring that both metropolitan and regional public sector officers have access to its corruption prevention and education services and will further develop its use of alternative media for communicating efficiently with the public sector.


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Average cost per major inquiry or review conducted Average cost per minor inquiry or review conducted

An element of the corruption prevention and education service is the conduct of inquiries and reviews relating to potential or actual misconduct issues in the public sector. A major inquiry or review involves the dedication of one or more FTEs for a minimum consolidated period exceeding two weeks, or the dedication of more than two FTEs for a consolidated period exceeding one week. A minor inquiry or review involves the dedication of a maximum of two FTEs for a maximum consolidated period of two weeks.

The Commission completed four major inquiries during the year which resulted in the following reports:

Protecting Personal Data in the Public Sector: Report of an inquiry into unauthorised access and disclosure of confidential personal information held on the electronic databases of public sector agencies; Western Australia Police Property Management Practices: A joint inquiry of the Western Australia Police and the Corruption and Crime Commission; Report on Corruption Prevention Review of the Government Employees Housing Authority; and "Two Years Out": A report of the first two years of the Western Australia Police Reform Program.

A major scoping review to construct the theoretical and contemporary framework for a significant and continuing investigation was also conducted. This has resulted in four internal reports which, while not for public release, will eventually form the basis of a tabled report of the Commission.

The average cost of a major inquiry or review during 2005-2006 was $147,870. There were no minor inquiries or reviews conducted during the reporting period. It is anticipated that the cost of major inquiries and reviews will increase in the short-term due to the planned increase in their complexity. As the focus of the Commission's corruption prevention and education function shifts from broad and general public sector corruption issues to more limited or agency-specific matters, the efforts required to complete this work will be raised proportionately. Additionally, there are several minor inquiries earmarked for completion. In the long-term the average costs should become more stable.

Average cost per major education material produced Average cost per minor education material produced

Major education materials include research reports, DVDs and any item that requires comparable input due to its size and the effort of production (for example, through significant research, scripting and editing, etc). Minor education materials include brochures and other items of similar size and effort of production. The average costs of major and minor educational materials were $37,341 and $7,468 respectively. Similar to inquiries and reviews, it is anticipated that the forecasted increasing complexity of these materials will raise the average cost of these items in the short- term, but that costs will stabilise in the long-term.


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Service Two: Oversight and conduct of public sector misconduct investigations (misconduct function)

Efficiency Indicator Average cost per matter assessed, monitored and reviewed

2005-06 $564

Average cost per matter investigated

Weighted average time taken per completed investigation 1 70 Days

$59,059

Weighted average time taken per matter assessed, monitored and reviewed

Table 20: Efficiency Indicators: Service Two

49 Days

The efficiency indicators for Service Two are difficult to analyse because this is the first year in which these indicators have been reported against. Nonetheless, they offer a means of establishing initial baseline data for use in future analysis. The nature and complexity of individual matters undertaken by the commission may display significant variation between, and within, given reporting years. For example, the Commission's entire investigative resources could be deployed on a small number of complex and protracted investigations during one year, and then engaged in a series of short and comparatively simple investigations in the following year. Consequently, it may require the collection of several years' data to accurately determine the distribution pattern of the averages and standard deviations that can be quantified objectively.

Average cost per matter assessed, monitored and reviewed

This KPI measures the average cost of the Commission's core service of managing misconduct allegations and notifications concerning public sector agencies. It is established by calculating the number of matters dealt with in relation to the cost of the resources applied to complete them. The average cost was $564 per matter during 2005-2006.

Average cost per matter investigated

Similar to the previous KPI, this is a measure of the average cost of the serious misconduct investigations conducted by the Commission in relation to operating costs of the Investigations Unit. It involves both preliminary investigations and investigations under sections 32(2) and 33(1) of the Act. The average cost per matter investigated by the Commission was $59,059 during the reporting period. The average cost per investigation might reduce through the efficiencies associated with increasing experience; however, the variation in length and relative complexity of investigations may cause this to fluctuate considerably.


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Average time taken per matter assessed, monitored and reviewed

This KPI measures the average time spent by the Commission in the handling of public sector agencies' misconduct matters. It is anticipated that this figure will remain relatively consistent, reflecting the number of complaints and notifications received by the Commission. Although improved efficiencies may be obtained through increased experience, this KPI may also be affected by variations in the quantity and complexity of matters received: factors that are largely outside of the Commission's control.

The times taken for all matters assessed, monitored and reviewed are combined in a weighted average that may be used for comparative purposes. During the financial year the average time per completed assessment was 10 days; the average time taken to monitor agencies' investigations was 11 1 days; and the average time taken to review agencies' investigations was 38 days. These three elements, utilised internally for management purposes, are calculated to a weighted average figure of 49 days for application to the key performance indicators. To derive the weighted average, each of the three elements is calculated as a proportion of the total matters handled. These three figures are then multiplied by the average time taken for their respective elements and totalled to provide the result.

Average time taken per completed investigation

As previously mentioned, the allocation of the Commission's investigative resources may vary considerably depending upon the nature and complexity of the matters identified for investigation. Although, in the long-term it could be expected that a normal distribution pattern would emerge for the average time taken per completed investigation, this may vary considerably between individual years.

In the year to 30 June 2006, the weighted average length of a Commission investigation was 70 days.

Service Three: Facilitation of investigations into organised crime (organised crime function)

I Efficiencv Indicator 1 200546 I

Average cost per exceptional powers finding application considered, approved and monitored

N/A

Average cost per fortification warning notice application considered and approved

Table 21: Efficiency Indicators: Service Three

N/A

Average cost per organised crime examination applied for and conducted


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N/A

Average cost per exceptional powers finding application considered, approved and monitored Average cost per fortification warning notice application considered and approved Average cost per organised crime examination applied for and conducted

Performance against these key performance indicators has been recorded as NIA (not applicable) because no significant, tangible activity occurred within Service Three (Facilitation of investigations into organised crime).

The Commission's delivery of Service Three is dependent upon the receipt of relevant applications from the Commissioner of Police. The KPls measure the Commission's performance in facilitating the Commissioner of Police's organised crime investigations and will depend on the quantity and complexity of matters to which the applications refer.


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AUDITOR GENERAL INUEPENIIENT A1.11)17' OPINION

7'0 the Parliament of Western Australia

COKFIUP'I'ION A N D CRlME COMMISSION FINANCIAL STATEMENTS AND PERFORMANCE INDICATORS FOR THE YEAR ENDED 30 JUNE 2006

Audit Opinion 111 my opinion,

m

(ii)

(iii)

Scope

the financial statements are based on proper accounts and present fairly the financiai posilion of the Corruption and Crime Commission at 30 June 2006 and its financial performance and cash flows for the year ended on that date. They are in accordance with applicable Accounting Standards and other mandatory professional reporting requirements in Australia and the Treasurer's Instructions;

the controls exercised by the Cornmission providc rcasonablc assurance that the receipt and expenditure of moneys, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions; and

the key effectiveness and efficiency performance indicators of the Commission are relevant and appropriate to help users assess the Commission's performance and fairly represent the indicated performance for the year ended 30 June 2006.

The Commissioner is responsible for keeping proper accounts and maintaining adequate systems of internal control, for preparing the financial statements and performance indicators, and complying with the Financial Administration and Audit Act 1985 (the Act) and other relevant written law.

The financial statements consist of the Income Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement, and the Notes to the Financial Statements.

The performance indicators consist of key indicators of effectiveness and efficiency.

Suntmary of my Role As required by the Act, I have independently audited the accounts, financial statements and performance indicators to express an opinion on the financial statements, controls and performance indicators. This was done by testing selected saiiiples of the evidence. Further information on my audit approach is provided in my audit practice statement. Refer "http://www.audit.wa.gov.au/pubs/Audit-Practice-Staten~ent.pd~~.

1411 audit does not guarantee that every amount and disclosure in the financial statements and performance indicators is error free. The term "reasonable assurance" recognises that an audit does not examine all evidence and every transaction. However, my audit procedures should identi@ errors or omissions significant enough to adversely affect thc decisions of users of the financial statements and performance indicators.

JOfIN DOYLE ACTING ALJDXTOR GENERAL. 12 September 2006

4th Flcor Ournas I iouse 2 Havelock Strcrt LVrq Perth 61705 Western Aus~ralia Tel: 08 9222 7500 Fax: 838 93?2 5h6:l


79


CERTIFICATION OF PERFORMANCE INDICATORS FOR THE YEAR ENDED 30 JUNE 2006

I hereby certify that the performance indicators are based on proper records, are relevant and appropriate for assisting users to assess the Corruption and Crime Commission's performance, and fairly represent the performance of the Commission for the financial year ended 30 June 2006.

COMMISSIONER

7 September 2006


8 1

CORRUPTION AND CRIME COMMlSSl~N OF WESTERN AUSTRALIA

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

The accompanying financial statements of the Corruption and Crime Commission have been prepared in compliance with the provisions of the Financial Adminisfration and Audit Act 1985 with proper accounts and records to present fairly the financial transactions far the financhi year ended 30 June 2006 and the financial position as at 30 June 2006.

At the date of signing, we were not aware of any circumstances that would render the particulars included in the financial statements misleading or inaccurate.

+4hmmissioner Accountable Authority

1 I September 2006

Alan Abraham Chief Finance Officer

1 I September 2006


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COST OF SERVICES

EXPENSES

CORRUPTION AND CRIME COMMISSION INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2006

Employee benefits expense Supplies and services Depreciation and amortisation Accommodation expenses Capital user charge Other expenses from ordinary activities

Total Cost of Services

INCOME

REVENUE

User charges and fees Interest revenue Other revenue

Total Revenue

Gains

Gain on disposal of non-current assets

Total Gains

Total lncome other than income

and subsidies from State Government

NET COST OF SERVICES

INCOME FROM STATE GOVERNMENT

Service appropriation Resources received free of charge

Total lncome from State Government

2006 Notes $"OOO

SURPLUSI(DEFIC1T) FOR THE PERIOD

This lncome Statement should be read in conjunction with the accompanying notes.


85

Current Assets Cash assets Restricted cash assets Receivables

Total Current Assets

CORRUPTION AND CRIME COMMISSION BALANCE SHEET

AS AT 30 JUNE 2006

2006 2005 Notes - $'000 ' 0 0 0

Non-Current Assets Amounts receivable for Services Office equipment Computer equipment Property, plant & equipment Office establishment lntangi ble Assets

Total Non-Current Assets

Total Assets

LIABILITIES Current Liabilities Payables Provisions Lease Liability Other current liabilities

Total Current Liabilities

Non-Current Liabilities Provisions Lease Liability

Total Non-Current Liabilities

Total Liabilities

NET ASSETS

Equity Contributed equity Accumulated surplus

TOTAL EQUITY

The Balance Sheet should be read in conjunction with the accompanying notes.


86

CORRUPTION AND CRIME COMMISSION CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2006

CASH FLOWS FROM STATE GOVERNMENT Service appropriation Capital contributions Holding account drawdowns

Net cash provided by State Government

Utilised as follows:

CASH FLOWS FROM OPERATING ACTIVITIES Payments Employee benefits Supplies and services Capital user charge Accommodation Other expenses GST paid on purchases

Receipts Interest received GST receipts from taxation authority Other receipts

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of non-current physical assets Purchase of non-current physical assets

Notes -

Net cash provided by /(used in) investing activities

Net increase I (decrease) in cash held

Cash assets at the beginning of the financial year

CASH ASSETS AT THE END OF THE FINANCIAL YEAR 22 6,300 8,867

The Statement of Cash Flows should be read in conjunction with the accompanying notes.


87

Contributed Equity

Balance at start of period

Other contributions

Balance at end of period

Accumulated Surplus

Balance at start of period

Accumulated Surplus

CORRUPTION AND CRIME COMMISSION STATEMENT OF CHANGES IN EQUITY

AS AT 30 JUNE 2006

Notes - 2006 2005 $I000 $000

Balance at end of period

Balance of equity at end of period Total Surplus/(Deficit) for the period

This Statement of Changes in Equity should be read in conjunction with the accompanying notes


88

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

I. First time adoption of Australian equivalents to International Financial Reporting Standards General

These are the Commission's first published financial statements prepared under Australian equivalents to lnternational Financial Reporting Standards (AIFRS).

Accounting Standard AASB I 'First-time Adoption of Australian Equivalents to lnternational Financial Reporting Standards' has been applied in preparing these financial statements. Until 30 June 2005, the financial statements of the Commission had been prepared under the previous Australian Generally Accepted Accounting Principles (AGAAP).

In accordance with the option provided by AASB 1 paragraph 36A and exercised by Treasurer's Instruction 1101 'Application of Australian Accounting Standards and Other Pronouncements', financial instrument information prepared under AASB 132 and AASB 139 will apply from 1 July 2005 and consequently comparative information for financial instruments is presented on the previous AGAAP basis. All other comparative information has been prepared under the AIFRS basis.

Summary of significant accounting policies

(a) General Statement

The financial statements constitute a general purpose financial report which has been prepared in accordance with the Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the Australian Accounting Standards Board as applied by the Treasurer's Instructions. Several of these are modified by the Treasurer's Instructions to vary application, disclosure, format and wording.

Where modification is required and has a material or significant financial effect upon the reported results, details of that modification and the resulting financial effect are disclosed in the notes to the financial statements.

(b) Basis of Preparation

The financial statements have been prepared on the accrual basis of accounting using the historical cost convention, modified by the revaluation of land, buildings and infrastructure, which have been measured at fair value.

The accounting policies adopted in the preparation of the financial statements have been consistently applied throughout all periods presented unless othewise stated.

The financial statements are presented in Australian dollars rounded to the nearest thousand dollars ($'000).

(c) Contributed Equity

UIG Interpretation 1038 'Contributions by Owners Made to Wholly-Owned Public Sector Entities' requires transfers in the nature of equity contributions to be designated by the Government (the owner) as contributions by owners (at the time of, or prior to transfer) before such transfers can be recognised as equity contributions. Capital contributions (appropriations) have been designated as contributions by owners by TI 955 'Contributions by Owners made to Wholly Owned Public Sector Entities' and have been credited directly to Contributed Equity.


89

(d) lncome

Service Appropriations Service Appropriations are recognised as revenues at nominal value in the period in which the Commission gains control of the appropriated funds. The Commission gains control of appropriated funds at the time those funds are deposited to the bank account or credited to the holding account held at the Department of Treasury and Finance.

Gains Gains may be realised or unrealised and are usually recognised on a net basis. These include gains arising on the disposal of non-current assets and some revaluations of non-current assets.

(e) Property, Plant and Equipment and Infrastructure Capitalisation/Expensing of assets ltems of property, plant and equipment and infrastructure costing over $1,000 are recognised as assets and the cost of utilising assets is expensed (depreciated) over their useful lives. ltems of property, plant and equipment and infrastructure costing less than $1,000 are immediately expensed direct to the lncome Statement (other than where they form part of a group of similar items which are significant in total).

Initial recognition and measurement All items of property, plant and equipment are initially recognised at cost.

For items of property, plant and equipment acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.

Depreciation All non-current assets having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits.

Depreciation on assets is calculated using the straight line method, using rates, which are reviewed annually. Estimated useful lives for each class of depreciable asset are:

Office Establishment 10 years Property, Plant and equipment 3 to 5 years Office equi ment

caP 3 to 5 years

Software 3 years Motor vehicles 3 years

(a) Software that is integral to the operation of related hardware.

(9 Intangible Assets

Capitalisafion/Expensing of assets Acquisitions of intangible assets costing over $1,000 are capitalised. The cost of utilising the assets is expensed (amortised) over their useful life. Costs incurred below these thresholds are immediately expensed directly to the lncome Statement.

Amortisation for intangible assets with finite useful lives is calculated for the period of the expected benefit (estimated useful life) on the straight line basis using rates which are reviewed annually. All intangible assets controlled by the Commission have a finite useful life and zero residual value. The expected useful lives for each class of intangible asset are:

Licences oftw ware'^)

up to 10 years 3 to 5 years

(a) Software that is not integral to the operation of any related hardware.


90

Licences Licences have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses.

Computer Soffware Software that is an integral part of the related hardware is treated as property. plant and equipment. Software that is not an integral part of the related hardware is treated as an intangible asset. Software costing less than $1,000 is expensed in the year of acquisition.

(g) Leases

The office accommodation occupied by the Commission is under a head lease between the lessor and the Commercial Property Branch of the Department of Housing and Works. The Commission has entered into operating lease arrangements for buildings and motor vehicles where the lessors effectively retain all the risks and benefits incident to ownership of the items held under the operating leases. Equal instalments of the lease payments are charged to the Statement of Financial Performance over the lease term, as this is representative of the pattern of benefits to be derived from the leased property.

(h) Cash and Cash Equivalents

For the purpose of the Cash Flow Statement, cash and cash equivalent (and restricted cash and cash equivalent) assets comprise cash on hand.

(i) Accrued Salaries

The accrued salaries suspense account (see note 15 'Restricted cash and cash equivalents') consists of amounts paid annually into a suspense account over a period of 10 financial years to largely meet the additional cash outflow in each eleventh year when 27 pay days occur in that year instead of the normal 26. No interest is received on this account.

(j) Amounts Receivable for Services (Holding Account)

The Commission receives funding on an accrual basis that recognises the full annual cash and non-cash cost of services. The appropriations are paid partly in cash and partly as an asset (Holding Account receivable) that is accessible on the emergence of the cash funding requirement to cover items such as asset replacement.

(k) Receivables

Receivables are recognised and carried at original invoice amount. The carrying amount is equivalent to the original invoice amount, as it is due for settlement within 30 days.

(I) Payables

Payables are recognised as the amounts payable when the Commission becomes obliged to make future payments as a result of a purchase of assets or services. The carrying amount is equivalent to the invoice amount, as they are generally settled within 30 days.


9 1

(m) Provisions

(i) Provisions - Employee Benefits Annual Leave and Long Sewice Leave The liability for annual and long service leave expected to be settled within 12 months after the end of the reporting date is recognised and measured at the undiscounted amounts expected to be paid when the liabilities are settled. Annual and long service leave expected to be settled more than 12 months after the end of the reporting date is measured at the present value of amounts expected to be paid when the liabilities are settled. Leave liabilities are in respect of services provided by employees up to the reporting date.

When assessing expected future payments consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions. In addition, the long service leave liability also considers the experience of employee departures and periods of service.

The expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

All annual leave and unconditional long service leave provisions are classified as current liabilities, as the Commission does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Superannuation The Government Employees Superannuation Board (GESB) administers the following superannuation schemes:

Gold State Superannuation Scheme (GSS); and West State Superannuation Scheme (WSS).

Existing members of the GSS may contribute a defined benefit lump sum scheme to the GSS Scheme.

The GSS Scheme obligations are funded by concurrent contributions made by the Commission to the GESB. The concurrently funded part of the GSS Scheme is a defined contribution scheme as these contributions extinguish all liabilities in respect of the concurrently funded GSS Scheme obligations.

Employees who are not members the GSS Scheme become non-contributory members of the WSS, an accumulation scheme. The Commission makes concurrent contributions to GESB on behalf of employees in compliance with the Commonwealth Government's Superannuation Guarantee (Administration) Act 1992. The WSS Scheme is a defined contribution scheme as these contributions extinguish all liabilities in respect of the WSS Scheme.


92

Leave Loading Leave Loading is paid to each employee for annual leave on the first payday in December of the relevant year. The amount paid relates to the period 1 January to 31 December of the relevant year, and is part of the Industrial Agreement of 13 December 2005, that was Registered on 19 January 2006.

(ii) Provisions - Other Employment On-Costs Employment on-costs, including workers' compensation insurance, are not employee benefits and are recognised separately as liabilities and expenses when the employment to which they relate has occurred. Employment on- costs are included as part of 'Other expenses' and are not included as part of the Commission's 'Employee benefits expense'. The related liability is included in 'Employment on-costs provision'.

Lease incentive liability Lease incentive liability arises as a consequence on the new tenancy occupied by the Commission at 186 St Georges Tce. The Lease incentive was granted as a facet of the lease of the premises, which in effect formed a component of the funds used for the fit-out of the building.

A liability is recorded that is amortised over the life of the lease by having the effect of reducing the rental expense for each period.

This treatment is consistent to the following guidances and was agreed to by Department of Treasury and Finance:

- Abstract 3 (8195) Lessees Accounting for Lease Incentives Under a Non- Cancellable Operating Lease (Urgent Issues Group - AASB) - AGAAP

- Interpretation 115 (July 04) Operating Leases - Incentives (Urgent Issues Group - AASB) - AIFRIS

(n) Resources Received Free of Charge or for Nominal Cost

Resources received free of charge or for nominal cost that can be reliably measured are recognised as revenues and as assets or expenses as appropriate, at fair value.

(0) Comparative Figures

Comparative figures have been restated on the AlFRS basis except for financial instruments, which have been prepared under the previous AGAAP Australian Accounting Standard AAS 33 'Presentation and Disclosure of Financial Instruments'. The transition date to AlFRS for financial instruments is 1 July 2005 in accordance with the exemption allowed under AASB 1, paragraph 36A and Treasurer's Instruction 11 01.


93

Employee benefits expense

Wages and salaries Superannuation - defined contribution plans Long service leave Annual Leave

Supplies and services

Communications Consultants and contractors Consumables Travel

Other

Depreciation and amortisation expense

Depreciation Computer Equipment Furniture & Fittings Leasehold Equipment Office Equipment Motor Vehicles Network Infrastructure Property, Plant & Equipment

Total depreciation

Amortisation Intangible assets

Total amortisation

Total depreciation and amortisation

Accommodation expenses

Lease rentals Repairs and maintenance Cleaning

Capital User Charge

Capital user charge


94

Other expenses Administration Auditing Electronic Collection Employment on-costs Equipment repairs and maintenance Research and development costs expensed Surveillance Other expenses

User Charges and Fees

Contributions to Government Vehicle Scheme

lnterest revenue

lnterest revenue

Other revenue

Expense recoveries current year

Other Revenue

Net gain/(loss) on disposal of non-current assets

Costs of Disposal of Non-Current Assets Plant, equipment and vehicles

Proceeds from Disposal of Non-Current Assets Plant, equipment and vehicles Net gainl(loss)

Income from State Government

Appropriation received during the year: Service appropriation

Resources received free of charge Determined on the basis of the following estimates provided by agencies: - Office of the Auditor General - State Solicitors Office - Dept of Land Administration


95

Restricted cash and cash equivalents

Non-current Accrued salaries suspense account

Receivables

Current receivables GST receivable

Prepayments Total current

Amounts receivable for services

Property, plant and equipment

Office equipment at cost Accumulated depreciation

Computer equipment at cost Accumulated depreciation

Property, plant & equipment at cost Accumulated depreciation

Office establishment at cost Accumulated depreciation


96

Reconciliations of the carrying amounts of property, plant, equipment and vehicles at the beginning and end of the reporting period are set out below.

Property, Plant, Omce Office Computer equipment and establishment

Equipment Equipment vehicles Total

$000 $000 $000 $000 $000 2006 Carrying amount at start of year 180 732 2,394 3112 6.41 8

Additions 128 50 3,415 1,459 5,052

Depreciation (65) (24 1 ) (1,486) (745) (2,537)

Carrying amount at end of year

239 54 1 4.206 3.826 8.812

Property, Plant, office Office Computer equipment and establishment

Equipment Equipment vehicles Total

$000 $000 $000 $000 $000 2005 Carrying amount at start of year

112 605 1,818 433 2,968 Additions

149 1,002 1,870 3,233 6,254 Disposals

Depreciation (29) (121) (1 50)

(81) (456) (1 ,174) (554) (2,264) Carrying amount at end of year

180 1,122 2,393 3,112 6,808


97

Intangible assets

Computer software At cost Accumulated amortisation

Payables Current Trade payables Other payables Total current

20. Provisions

Current Employee benefits provision Annual leave Long service leave

Other provisions

Employment on-costs

Employee benefits provision Long service leave

Other provisions Employment on-costs

Other Provisions

Current

Lease lncentive Liability

Non-current

Lease lncentive Liability

Equity

Contributed equity Balance at start of year

Contributions by owners

Total contributions by owners

Balance at end of year


98

Accumulated surplusl(deficit)

Balance at start of year

Result for the period

Income and expense recognised directly to equity

Balance at end of year

Notes to the Cash Flow Statement

Reconciliation of cash

Cash at the end of the financial year as shown in the Cash Flow Statement is reconciled to the related items in the Balance Sheet as follows:

Cash and cash equivalents 6,253 8,867 Restricted cash and cash equivalents (see note 14 'Restricted cash and cash equivalents') 47 1

Disclose the significant terms and conditions applying to cash and cash equivalents.

Reconciliation of net cost of services to net cash flows provided bv/(used in) operating activities

Net cost of services

Non-cash items: Depreciation and amortisation expense (note 6)

Resources received free of charge (note 14) Net (gain)lloss on sale of property, plant and equipment (note 13)

(Increase)ldecrease in assets: Current receivables Other current assets Non current assets

Increasel(decrease) in liabilities: Current payables Current provisions Liabilities extinguished Other current liabilities Non-current provisions Lease Incentive Provision

Change in GST in receivableslpayables

Net cash provided by/(used in) operating activities

At the reporting date, the Commission had fully drawn on all financing facilities, details of which are disclosed in the financial statements.

Commitments

Non-cancellable operating lease commitments

Commitments for minimum lease payments are payable as follows: Within 1 year 1,106 1,153 Later than 1 year and not later than 5 years 5,227 4,485 Later than 5 years 3,109 5.510

9,443 11,148

The lease commitments include amounts for motor vehicles and office accommodation lease.


99

Explanatory statement

Significant variations between estimates and actual results for income and expense are shown below. Significant variations are considered to be those greater than 10% or $50,000.

Significant variances between estimated and actual result for 2006

2006 2006 Estimate Actual Variation

$000 $000 $000 Expenses Employee benefits 12,447 13,766 1,319 Supplies and services 5,010 1,548 (3,462) Depreciation & amortisation 4,855 2,839 (2,016) Accommodation expenses 1.575 1,939 364 Capital user charge 1,618 1,259 (359) Other expenses 407 1,935 1,528

25,912 23,286 (2,834) Employee benefits The variance is due to number of employees increased over the past 12 months to 146 FTE at 30 June 2006.

Supplies and services The variance is due to different dissection of accounts as per the new standards and reporting requirements. The overall total is less than 10% variance w~th a reduced overall expenditure of $2.834 million.

Depreciation & amortisation The variance is due to lower than estimated capital purchases in the financial year

Accommodation expenses The variance is due to payments of $302,500 for 'Make Good' payments upon vacating two leased premises.

Capital user charge The variance is due to lower than estimated net asset position at 30 June 2006.

Other expenses The variance is due mainly to the classification of expenses in relation to supplies & sewices in the 2005-06 budget.

Significant variances between actual results for 2005 and 2006

2006 2005 Variance Income $000 $000 $000 User charges and fees 16 20 4 Interest Revenue 1 35 34 Other revenue 2 1 96 75

Expenses Employee benefits Supplies and services Depreciation & amortisation Accommodation expenses Other expenses


I 00

User charges and fees The variance relates to Government Vehicle Scheme.

lnterest Revenue The variance is due to no term deposits being held for the past 12 months.

Other Revenue The variance is due to expense recoveries being brought to account in the same year as the expense.

Employee benefits The variance is due to an increase of employees to 146 at 30 June 2006.

Supplies and services The variance is due to increased costs and charges across the Commission.

Depreciation & amortisation The variance is due to purchase of more assets in line with an increase of employees over the past 12 months.

Accommodation expenses The variance is due to the Commission consolidating its rental properties

Other expenses The variance is due to increased costs and charges across all directorates of the Commission.

Financial instruments (a) Financial Risk Management Objectives and Policies

Financial instruments held by the Commission are cash and cash equivalents, finance leases, Treasurer's advances and receivables and payables. The Commission has limited exposure to financial risks. The Commission's overall risk management program focuses on managing the risks identified below.

Credit risk The Commission trades only with recognised, creditworthy third parties. The Commission has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Commission's exposure to bad debts is minimal. There are no significant concentrations of credit risk.

Liquidity risk The Commission has appropriate procedures to manage cash flows including drawdowns of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

(b) Financial Instrument disclosures

Financial instrument information for the year ended 2005 has been prepared under the previous AGAAP Australian Accounting Standard AAS 33 'Presentation and Disclosure of Financial Instruments'. Financial instrument information from 1 July 2005 has been prepared under AASB 132 'Financial Instruments: Presentation' and AASB 139 'Financial Instruments: Recognition and Measurement'. See also note 2(y) 'Comparative figures'.

Interest Rate Risk Exposure

The following table details the Commission's exposure to interest rate risk as at the reporting date.


I01

Weighted Average Effective lnterest

Rate 2006 % Financial Assets Cash Assets Nil Restricted Cash Nil Receivables Nil Amounts receivable Nil for services

Financial Liabilities Payables Other liabilities

2005 Financial Assets Cash Assets Restricted Cash Receivables Amounts receivable for services

Fixed lnterest Rate Maturity

Variable Less 1 to 5 More lnterest than 1 Years than 5

Rate Year Years

Non- Total lnterest Bearing

Nil 311 311 Nil 200 200

511 511

Fixed lnterest Rate Maturity

Weighted Variable Less 1 to 5 More Non- Total Average lnterest than 1 Years than 5 lnterest Effective Rate Year Years Bearing lnterest

Rate % $000 $000 $000 $000 $000 $000

Nil - 8,867 8,867 Nil 1 1 Nil 209 209 Nil - 3,666 3,666

Financial Liabilities Payables Other liabilities

Nil 277 277 Nil 3 3

280 280 Fair Values The carrying amount of financial assets and financial liabilities recorded in the financial statements are not materially different from their net fair values.


102

26. Remuneration of members of the Accountable Authority and senior officers

2006 2005 $'OOO $'OOO

Remuneration on Members of the Accountable Authority The number of members of the Accountable Authority, whose total of fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year, fall within the following bands are:

$ 140,001 - 150,000 1 1

The total remuneration of member of the Accountable Authority-is: 146 138

The Commissioner is the Accountable Authority, and he is not a member of the Pension Scheme

Remuneration of Senior Officers The number of senior officers, other than senior officers reported as members of the Accountable Authority, whose total fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year, fall within the following bands are:

2006 2005 $ $'OOO $'OOO

80,001 - 90,000 1 90,001 - 100,000 1 1 100,001 - 110,000 1 1 110,001 - 120,000 4 4 120,001 - 130,000 3 2 140,001 - 150,000 4 150,001 - 160,000 1 180,001 - 190,000 1 190,001 - 200,000 1 200,001 - 210,000 2 220,001 -230,000 1

The total remuneration of senior officers is: 1,986 1,595

The total remuneration includes the superannuation expense incurred by the Commission in respect of senior officers other than senior officers reported as members of the Accountable Authority.

No senior officers are members of the Pension Scheme.

Remuneration of auditor

Remuneration payable to the Auditor General for the financial year is as follows: 2006 2005 $'OOO $'OOO

Auditing the accounts, financial statements and performance indicators 25 17


103

28. Schedule of Income and Ex~enses by Service

COST OF SERVICES Expenses Employee benefits expense Supplies and services Depreciation and amortisation expense Accommodation expenses Capital User Charge Other expenses Total cost of sewices

lncome User charges and fees Interest revenue Other revenue Gain on disposal of non-current assets Total income other than income from State Government NET COST OF SERVICES

Corruption Prevention and Oversight and Conduct of Total Education Programs, Reviews Public Sector Misconduct and consultancy Services to Investigations

the Public Sector 2006 2005 2006 2005 2006 2005

$000 $000 $000 $000 $000 $000

INCOME FROM STATE GOVERNMENT Service appropriation Resources received free of charge Total income from State Government

Surplusl(deficit) for the period

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

MODEL STATUTORY AUTHORITY (NET COST OF SERVICES)

29. Reconciliations explaining the transition to Australian equivalents to International Financial Reporting Standards (AIFRS)

RECONCILIATION OF EQUITY AT THE DATE OF TRANSITION TO AIFRS: 1 JULY 2004

Previous GAAP 1 July 2004 Adjustments

Note

ASSETS Current Assets

1 Cash and cash equivalents Restricted cash and cash equivalents Receivables

3 Other current assets Total Current Assets

Non-Current Assets Office Equipment Computer Equipment

2 Amounts receivable for services Property, plant and equipment Office Establishment Intangible assets

Total Non-Current Assets

TOTAL ASSETS

Reclassification Write-down Total Al FRS Adjustments 1 July 2004

AASB 101 AASB 5 AASB 138 AASB 119

CORRUPTION AND CRIME COMMISSION OF WESTERN AUSTRALIA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

RECONCILIATION OF EQUITY AT THE DATE OF TRANSITION TO AIFRS 1 JULY 2004

Previous GAAP 1 July 2004

Note

LIABILITIES

Current Liabilities Payables Provisions

(4) Other current liabilities Total Current Liabilities

Non-Current Liabilities Provisions Total Non-Current Liabilities

Total Liabilities

Adjustments

Reclassification Write-down

AASB 101 AASB 5 AASB 138

Tots[ Adjustments

Total AlFRS Adjustments 1 July 2004

AASB 119

Net Assets 12,996

Equity

Contributed equity Accumulated surplus Total Equity

(1) Equivalent AGAAP line item 'Cash Assets' (AIFRS 'Cash and Cash Equivalents') (2) Equivalent AGAAP line item 'Amounts receivable for outputs' (AIFRS 'Amounts receivable for services') (3) Equivalent AGAAP line item 'Other Assets' (AIFRS 'Other current assets') (4) Equivalent AGAAP line item 'Other liabilities' (AIFRS 'Other current liabilities')

RECONCILIATION OF EQUITY AT THE END OF THE LAST REPORTING PERIOD UNDER PREVIOUS AGAAP: 30 JUNE 2005

GAAP 30June2005 Adjustments

Rec[assification Write-down

AASB 101 AASB 5 AASB 138 AASB 119 Note

ASSETS Current Assets

(1) Cash and cash equivalents Restricted cash and cash equivalents Receivables

(3) Other current assets Total Current Assets

Non-Current Assets Office Equipment Computer Equipment

(2) Amounts receivable for services Property, plant and equipment Office Establishment Intangible assets Total Non-Current Assets

TOTALASSETS

woo

AlFRS 30 June 2005

RECONCILIATION OF EQUITY AT THE END OF THE LAST REPORTING PERIOD UNDER PREVIOUS AGAAP: 30 JUNE 2005

Note LIABILITIES

Current Liabilities Payables Provisions

(4) Other current liabilities Lease Liabilities Total Current Liabilities

Non-Current Liabilities Provisions Lease Liabilities Total Non-Current Liabilities

GAAP 30June2005 Adjustments

AASB 101 AASB 5 AASB 138 AASB 119

Total Adjustments

$000

(297)

Total Adjustments

A1FR.S 30June2005

$000

277 1064

3

Total Liabilities 4,438 4,438

Net Assets 15.112 15.212

Equity

Contributed equity Accumulated surplus/(deficiency) Total Equity

The transition to AIFRS includes adjustments for the transition AIFRS as at 1 July 2004 plus adjustments for the period 1 July 2004 to 30 June 2005 (1) Equivalent AGAAP line item 'Cash Assets' (AIFRS 'Cash and Cash Equivalents') (2) Equivalent AGAAP line item 'Amounts receivable for outputs' (AIFRS 'Amounts receivable for services') (3) Equivalent AGAAP line item 'Other Assets' (AIFRS 'Other current assets') (4) Equivalent AGAAP line item 'Other liabilities' (AIFRS 'Other current liabilities')

RECONCILIATION OF INCOME STATEMENT (PROFIT OR LOSS) FOR THE YEAR ENDED 30 JUNE 2005

COST OF SERVICES Expenses Employee benefits expense Superannuation Supplies and services Depreciation Accommodation Administration expenses Capital User Charge Other expenses Total cost of sewices

Income Revenue

User charges and fees Other revenue

NET COST OF SERVICES

INCOME FROM STATE GOVERNMENT

GAAP 30 June

2005 Adjustments

Net Restorati gains on on costs disposal

AASB5 AASB116 AASB138 AASB119 AASB137 AASB101

Al F RS Total 30 June

2005

Output appropriation 22,274 22,274 Resources received free of charge 2 1 2 1 Total income from State Government 22,295 22,295

Surplus for the period 1,349 1,349

RECONCILIATION OF CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2005

CASH FLOWS FROM STATE GOVERNMENT Output appropriation Net cash provided by State Government

Utilised as follows: CASH FLOWS FROM OPERATING ACTIVITIES Payments Employee benefits expense Superannuation Supplies and services Accommodation Administration expenses Capital User Charge GST payment on purchases

Receipts User charges and fees Other receipts Net cash provided byl(used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of non-current physical assets Purchase of non-current physical assets Capital Appropriation Transfer from holding account Net cash provided byl(used in) investing activities

Net increasel(decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

CASH AND CASH EQUIVALENTS AT END OF PERIOD

GAAP Al FRS

30 June Adjustmen Total 30 June 2005 ts 2005

AASB 119


I 10