ICAC pings two former TAFE NSW execs over software deal

The NSW anti-corruption watchdog has labelled two former Western Sydney TAFE execs corrupt for accepting almost $450,000 from IT consultancy Oscillosoft to promote its budgeting software.

The Independent Commission Against Corruption (ICAC) yesterday released its Operation Lancer report [pdf] into the conduct of the two finance managers at the Western Sydney Institute of TAFE.

The three-year investigation found the managers, Hasan Mamun and Samiul Kabir, engaged in corrupt conduct when they were paid by Oscillosoft to favour the software over four years.

Between August 2014 and December 2018, the pair solicited and received up to $228,153 and approximately $220,435, respectively, in relation to the budgeting planning software program, iPlan.

The iPlan program was meant to be a “band aid” for WSI TAFE, while the institute waited for the release of the TAFE-wide educational planning and integrated costing program at the end of 2014.

But it spread to other institutes across the state, leading to questions over the original procurement with Oscillosoft, which “did not have the appropriate ICT accrediation under the NSW government's standard commercial framework for ICT services”.

iPlan was ultimately purchased by nine of the 10 TAFE NSW institutes at a cost of $3.4 million between January 2014 and August 2018. At the time allegations of corruption were referred to ICAC in May 2017, Oscillosoft had been paid more than $2 million.

ICAC also found that Oscillosoft directors Kazi Hassan, Ashique Ibrahim and Mohammad Suza-Ud-Dawllah “engaged in serious corrupt conduct” by facilitating the payments and gifts to Mamun and Kabir.

Original procurement

The report said Mamun approached Oscillosoft founder Kazi Hassan, who he knew through the Bangladeshi community, in mid-2013 to ask if he would develop a software program for the TAFE.

A prototype was quickly developed within a three-to-four month period and presented to WSI TAFE executives in March 2014, with Mamun subsequently asked to “roll it out”.

However, ICAC found Mamun had not obtained three quotations for the work, despite WSI TAFE having paid more than the $30,000 threshold to Oscillosoft ($45,544) for the original proposal.

“The Commission is satisfied that Mr Mamun knew that he did not comply with proper procurement processes when he acquired the iPlan software program,” the report said.

“He knew that he was required to get approval to directly negotiate with a contractor and that an IT contractor should be on the list of ICT accredited suppliers.

“The Commission is also satisfied that Mr Mamun deliberately ignored and circumvented the proper procurement processes in order to engineer the sourcing of the program from Oscillosoft.”

The report also found Mamun attempted to conceal the fact that proper procurement process were not followed by making changes to the Oscillosoft deal to bring it under the $30,000 threshold.

iPlan spreads to other TAFEs

In mid-2014, other institutes began expressing an interest in the iPlan program, namely the Illawarra Institute of TAFE NSW and the Western Institute of TAFE NSW.

ICAC found in June 2014, Mamun approached Oscillosoft to establish an arrangement where he and Kabir would receive 20 percent of the profits if the iPlan program was sold to other TAFEs.

“He told the commission he asked for ‘a bit of consultancy, a bit of commission or whatever it is’ and Oscillosoft agreed,” the report said.

Oscillosoft accepted these terms, but not before its founder Hassan raised concerns about a conflict of interest with Mamun, which were dismissed.

Mamun also knowingly signed declarations falsely declaring no conflict of interest for the procurement in 2015, 2016 and 2017.

He now accepts that there was a conflict of interest by accepting payments and that his conduct was dishonest, ICAC said.

Payments were made to relatives and friends of Mamun and Kabir, including around $200,000 into the account of Mamun’s wife.

The pair were engaged as “subject matter experts” until November 2014, but Oscillosoft continued paying them until late 2018.

The commission was also told that after the initial arrangement, Mamun approached Oscillosoft director Ashique Ibrahim in 2017 wanting equity in Oscillosoft.

Following this approach, the firm sought legal advice about forming a company with Mamun and Kabir, and was later told this was not possible as they worked for TAFE NSW.

Despite this legal advice, Oscillosoft made additional payments to Mamun and Kabir in January 2018, October 2018 and December 2018 at their request.

Potential prosecution

ICAC will now consider obtaining the advice of the state Director of Public Prosecutions over whether or not to prosecute Mamun and Kabir, as well as the three Oscillosoft directors, for various alleged offences.

It said “insufficient governance and the iPlan program being developed outside an ICT governance framework” and “repeated non-compliance with procurement policy” contributed to the conduct.

TAFE NSW has been asked to “constrain local ICT projects that are ‘architectural exceptions’” by closing regional data centres, moving applications and software into the TAFE NSW private cloud or a local cloud provider [and] evaluating local software modules, applications and version for requirement and removal”.

The Commission also recommended ensuring “robust and measurable criteria are used… for the governance of ICT projects by uplifting capability to members of project control boards”, and that TAFE NSW develop strategic category plans that cover all ICT spend and denote which spend is significant.