Senior bureaucrats accused of $260m COVID cover-up now in top NDIS jobs

October 28, 2026 — 5:00amTwo Victorian bureaucrats found by an integrity watchdog to have attempted to conceal that almost $260 million in COVID-19 grants were paid to ineligible businesses now work in top jobs overseeing the $50 billion National Disability Insurance Scheme.A damning report by Victoria’s corruption watchdog this month revealed three senior public servants withheld or provided misleading information about the payment of pandemic support grants to 9000 ineligible businesses.IBAC commissioner Victoria Elliott said there had been a “clear failure to act in line with the high integrity standards expected of Victoria’s public officers”. Simon SchluterThe Independent Broad-based Anti-corruption Commission made adverse findings against the three public servants from what was then the Department of Jobs, Precincts and Regions, saying their conduct was a “clear failure to act in line with the high integrity standards expected”.IBAC did not name the trio. However, The Age can reveal the two most senior of the three now work in management positions running the National Disability Insurance Agency.The NDIA – which administers the $50 billion scheme that supports 782,000 people – has refused to respond to questions about whether it will take any action as a result of the watchdog’s findings.The Age has confirmed the trio’s identities with three sources familiar with the integrity investigation who were not authorised to speak publicly, but has chosen not to name them after IBAC decided there were compelling reasons not to do so. The watchdog referred to two of them as the “associate secretary” and the “deputy secretary”.However, IBAC’s damning assessment of the pair’s conduct raises questions about their suitability to serve in high-ranking positions in the NDIA, which is in charge of a scheme that has been beset by fraud and waste.People with Disability Australia chief executive Megan Spindler-Smith said the NDIA needed to uphold the highest standards of integrity and accountability, particularly among its senior leadership.“People with disability need to be able to trust the NDIA and the people making decisions about our supports and our lives,” Spindler-Smith said.Transparency International Australia CEO Clancy Moore said the IBAC report described behaviour that was clearly contrary to the Australian Public Service’s values of stewardship, integrity and ethical behaviour.Two public servants who were the subject of adverse findings by Victoria’s anti-corruption watchdog are now helping oversee the $50 billion National Disability Insurance Scheme.Marija Ercegovac“The IBAC report was very clear. Tone from the top is important,” he said.IBAC’s investigation found there was widespread rorting of the Victorian government’s Business Costs Assistance Program, intended to help businesses affected by pandemic lockdowns.Businesses had to be registered for GST to claim the grants, worth up to $97,200 each. But in November 2021, the department’s integrity services unit estimated almost $285 million had been paid to businesses that were ineligible but had claimed the grants by legally backdating their GST registration.That information was included in a report brief intended for the then-minister, Martin Pakula, and the state auditor-general.Martin Pakula (right) at a press conference in September 2021.Joe ArmaoHowever, IBAC found the deputy secretary directed that the information be deleted from the report after discussing it with the associate secretary, who also failed to disclose the suspected significant loss of public money to their boss, department secretary Simon Phemister.IBAC’s own analysis estimated about $257 million was paid to 9000 ineligible businesses, with $108 million going to businesses that had been inactive six months before the pandemic.Despite this, only $8 million has been repaid to the state government so far, with another $5 million being returned through repayment plans, IBAC reported.IBAC concluded that the magnitude of the suspected loss had not been raised with Phemister, who in turn could not notify his minister, which was a “substantial failure” by the public servants to provide frank and fearless advice.‘The convoluted rationalisation of the department’s decision to withhold information suggests that ethics and integrity were secondary considerations in the face of scrutiny.’IBAC’s Operation Harmonia report“Had that information been provided, decisions could have been made, including to suspend and/or recoup payments,” it found.IBAC also found the deputy secretary provided misleading information to now premier Ben Carroll when Carroll took over the portfolio in 2022, including that no payments had been made in error and that Pakula had been “fully apprised” of any issues with the grants.The two senior public servants defended their actions in evidence to IBAC and disputed the adverse findings.The deputy secretary told IBAC they had simply followed the associate secretary’s instructions to remove the GST-backdated figures from the report. This was “entirely reasonable” in the circumstances and did not support the conclusion they had deliberately concealed the suspected loss, they said.The deputy secretary said they believed the figures were deleted so that their accuracy could be verified and then reported with confidence.The deputy secretary also said they believed at all relevant times that Pakula was aware of the GST-backdating issue. If Pakula had not been told, “then it is only the Secretary [Phemister], who did know, who will be able to explain that”, they said.The associate secretary told the watchdog they did not believe at the time – and still did not believe – that payments to businesses that backdated their GST were disallowed under the scheme, and that IBAC’s assertion they deliberately withheld information about the issue was “simply untrue”.However, IBAC said the associate secretary should have reported the integrity team’s analysis to Phemister, even if they disagreed with that analysis.The associate secretary also “strenuously denied” the deputy secretary’s claim that they talked about deleting the $285 million figure from the report, and said Phemister knew that a large number of businesses with backdated GST registrations were claiming grants. “It was common knowledge at the time,” they said.IBAC rejected these arguments, saying: “The convoluted rationalisation of the department’s decision to withhold information – proffered in response to IBAC’s enquiries – suggests that ethics and integrity were secondary considerations in the face of scrutiny.”“While officers within the department spoke up, their leaders failed to act, meaning the government was left uninformed and unable to move quickly to address this suspected significant loss of public funds,” IBAC commissioner Victoria Elliott said.IBAC found that although there was no political pressure to withhold evidence from the government, it was understood Pakula would not welcome the news.Pakula told IBAC that the watchdog should not support the idea that public servants could be excused from giving frank and fearless advice simply because it may anger their minister.“Whilst a small minority of public servants might seek to conceal mistakes for fear that they may have to contend with a ‘cranky’ minister, such a response can never be justified,” he said.The report noted that because the public servants were no longer employed by the Victorian department, its current secretary was “unable to take further action in relation to their identified conduct”.IBAC would not say why it chose not to name the individuals in its report, but said those decisions generally factored in a report’s purpose, an individual’s health, safety and welfare, and the potential for reputational harm.“In Operation Harmonia, IBAC determined that the use of titles was appropriate to expose the conduct,” an IBAC spokesperson said.The three public servants referenced in the report – the third individual no longer works in government – declined to answer questions from The Age.A spokesperson for the Department of Jobs, Skills, Industry and Regions, which has replaced Jobs, Precincts and Regions, said it reviewed all 192,000 grants issued under the Business Cost Assistance Program and the Small Business COVID Hardship Fund, after the auditor-general raised concerns about the programs in 2023.The department identified that 4894 grant recipients were potentially ineligible, and contacted those businesses to ask for proof of eligibility or to pay back the loan.The department has written off $72.5 million in incorrect payments that it has not been able to recover, the spokesperson said, adding it had to balance the responsibility to seek refunds with the cost of recovering those funds.“The pandemic demanded a response that was unprecedented in scale and desire for speed,” they said. “The department … has undertaken process improvements since the pandemic.”Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.Patrick Hatch is state politics reporter at The Age. Contact him at patrick.hatch@theage.com.au, or via Signal at @pwhatch.61Connect via X or email.From our partners