National corruption watchdog mishandled complaint against commissioner

Australia Broadcast Center

28-05-2025

The federal anti-corruption watchdog has admitted it failed to comply with its own legislation by not referring a complaint about a commissioner to the agency's independent watchdog.
Made seven months ago, the referral was wrongly dismissed instead of being immediately passed to the National Anti-Corruption Commission's inspector, as required by law. The misstep has only come to light via a private apology to the complainant, shared with the ABC.
The admission confirms an early and significant credibility setback for the new anti-corruption body, which was established with great fanfare — and significant crossbench pressure — to raise ethical standards in public life. Designed to hold others to account, the NACC is now under scrutiny for its handling of its own internal oversight.
Under its governing legislation, any complaint involving the conduct of NACC staff or commissioners — including conduct prior to their appointment — must be referred to the inspector, regardless of how serious it is deemed to be.
In a letter dated February 5, NACC deputy commissioner Kylie Kilgour admitted the matter should have been referred and transferred the complaint to inspector Gail Furness.
"Unfortunately, the commission staff who received your referral assessed only whether your matter raised a 'corruption issue' and did not consider whether the matter should be referred to the Inspector," the correspondence, seen by the ABC, said.
"I apologise for this error."
The letter also confirms the commissioner in question was not notified of the allegation.
It's understood Ms Furness considered the complaint for three months and concluded it fell outside her jurisdiction. Her reasons have not been made public.
In a statement, a NACC spokesperson said the delay in the referral of the complaint was due to "human error".
"Systems have since been put in place to safeguard against this from happening in the future," they said.
"The commission confirms it takes its reporting obligations to the inspector under the NACC Act seriously. Beyond that it is not appropriate for the commission to comment further on matters within the inspector's jurisdiction."
ABC News is not suggesting any wrongdoing by the employee in question, only that the referral was not handled in accordance with the body's legal obligations.
However, the referral has reignited scrutiny over the NACC's internal judgement after a high-profile mistake last year in which the commission initially ruled out investigating six public servants involved in the illegal debt recovery system known as Robodebt.
About half a million Australians were affected by the program, with some debt notice recipients later committing suicide.
Following a public outcry and 1,160 objections, Ms Furness launched an independent review into the watchdog's decision-making process and found NACC chief Paul Brereton unintentionally engaged in "officer misconduct" by not entirely removing himself from deliberations about whether to investigate, despite declaring a "close association" with one of the six public servants involved.
Following that decision, the NACC conceded it would pursue an investigation into the Robodebt officials.
The latest referral is the third time since the body was established in July 2023 that section 203 of the NACC act, requiring an inspector review of a complaint relating to a watchdog staff member, has been triggered.
The inspector-general's annual report last year indicates that prior to October only two "mandatory referrals" had been made by the NACC to the oversight body.
The first case involved a person who allegedly offered money to a NACC staff member — a gesture that may have been an attempt to improperly influence them.
After further investigation, Commissioner Brereton concluded the person likely didn't realise they were dealing with a NACC official and hadn't asked them to do anything in their official role. The Inspector agreed no further action was needed.
The annual report said the second referral prompted more debate, with the commissioner and the inspector discussing a range of options — including sending the case to the Australian Federal Police, launching a joint investigation, or handling it internally.
"In the end, the NACC took it on as a corruption issue and investigated it directly," the report read.
The inspector's official guidance states:
"If the NACC commissioner becomes aware of any NACC corruption issue, they must refer it to the NACC inspector. Once referred, the inspector has discretion to decide whether the issue meets the serious or systemic threshold to warrant an investigation."
The requirement applies even to alleged conduct predating a staff member's appointment.
Independent crossbenchers have previously told the ABC they would push to make the integrity watchdog more transparent and hold more public hearings if they held the balance of power this term of parliament, but that will be harder after Labor won in a landslide.
Do you know more? Please email Olivia Caisley at [e-mail]