Victoria’s anti-corruption watchdog has slammed practices which occurred during construction of the new $1.1 billion Bendigo Hospital, saying lax procedures enabled a former construction manager to engage in corrupt conduct and also finding that the chief executive officer engaged in conduct which contrary to the values of the public service.

In a special report tabled in the Victorian State Parliament, the Independent Broad-based Anti-Corruption Commission outlined details of corrupt behaviour which it uncovered in respect of Bendigo Health’s construction of the new Bendigo Hospital.

The investigation found that former construction manager Adam Hardinge had engaged in corrupt conduct including theft of building materials and collusion with contractors.

It established, for instance, that Harding directed his staff to have more than $21,000 which Bendigo Health received from the sale of scrap metal (mostly copper wiring) which was stripped as part of enabling works for the new hospital to be paid into his family’s trust account.

In addition, Hardinge was found to have used building materials owned by Bendigo Health in renovations to his private residence, sold an electrical transformer which was worth $70,000 and was owned by Bendigo Health to a contractor without authorisation and authorised 25 demolitions and minor building works within permits.

In addition, the service’s chief executive officer John Mulder was found to have engaged in conduct which was contrary to the Victorian Public Sector Code of Conduct as well as Bendigo Health’s organisational values as a result of using $10,000 worth of Bendigo Health resources for his own private benefit and using employees to undertake work at properties owned by his with (without payment or with belated payment once becoming aware of IBAC investigations).

In its report, IBAC found a range of vulnerabilities and inadequacies within the Bendigo Health internal control system.

Procurement policies and procedures had been systematically circumvented by Hardinge within the Buildings and Infrastructure division, it found.

Enabling works associated with the build, for example, did not appear to have been subject to usual financial and management controls.

The theft of property and materials, meanwhile, had been enabled by a lack of control over assets, IBAC said.

Finally, the investigations had uncovered a ‘toxic culture’ at the service and a particularly unhealthy workplace environment.

Commenting on the findings, IBAC Commissioner Stephen O’Bryan said the conduct was extremely disappointing.

“Public sector corruption has wide reaching consequences that often go beyond the financial costs,” IBAC Commissioner Stephen O’Bryan said.

“The Victorian community rightly expects every public-sector employee to behave ethically and to use public resources responsibly and for the good of the community.

“Public sector employees, especially senior managers, are required to use their powers in a responsible way. They are not allowed to seek or obtain personal benefit for themselves, their families or associates.”

“Hardinge has been convicted on multiple criminal charges and fined $15,000 in relation to theft charges as well as agreeing to pay $5,000 to the Bendigo Health Foundation on two other charges.”

Mulder was temporarily stood down as chief executive officer in early February.