Daniel Andrews labels damning report 'educational'

Victorian Premier Daniel Andrews has downplayed an anti-corruption investigation which found his government exerted pressure on health department officials to award a $1.2 million contract to a health union.

The Independent Broad-based Anti-corruption Commission released its Operation Daintree report on Wednesday, after investigating the awarding of the contract in the lead-up to the November 2018 election.

Violence against health workers was a growing problem at the time and the Labor government had long promised to address it.

The Health Workers Union put in a pitch in June 2018 to run a staff training program to tackle the issue, with the government ultimately unfairly awarding it the contract on the eve of the election.

The following year, an anonymous source tipped off the watchdog alleging serious corruption.

Mr Andrews on Wednesday stressed the report was "educational" and said therefore there were no findings against anyone.

However, the report's recommendations were about a number of serious matters, he said.

"The staff members who are referred to in this report do not work for the government anymore and have not worked for the government for years and … the ministers who are referenced in the report are not even members of the parliament any longer," he said.

"Obviously, I am accountable and fundamentally responsible for driving a process to consider these 17 recommendations."

The watchdog's investigation substantiated that a ministerial advisor working for then-health minister Jill Hennessy exerted pressure on Department of Health and Human Services staff to award the contract to a Health Workers Union entity.

It also found an advisor to subsequent health minister, Jenny Mikakos, and an advisor to Mr Andrews intruded on the department's management of the contract against the public interest.

Above all, the inquiry named the premier as ultimately responsible for the misconduct. 

The investigation did not detect any corruption. 

"(Mr Andrews) remains accountable to parliament for the conduct of his staff and its consequences, regardless of whether or not he has personal knowledge of it," the report said.

"Parliament may hold him personally responsible for the conduct of his staff and its consequences, where he was aware of their actions or ought reasonably to have been aware of them."

The premier was grilled by the watchdog and played a tape of himself announcing a "partnership" with the union ahead of it being awarded the contract. 

He initially contended in evidence that did not mean the union secured the contract by the time of the announcement, but later accepted he could have told the union about the intended commitment ahead of the announcement. 

Conduct by senior public servants also fell short of that required by Victorian standards.

"The pursuit by advisors of the perceived interests of their ministers, including the premier, at the expense of proper process and standards is another example of the phenomenon of grey corruption that is of increasing concern to integrity bodies around Australia," the report said.

The operation found ample evidence of the misuse of power and influence by ministerial advisors and departmental executives.

Health department staff held significant concerns from the start about whether the union entity, the Health Education Fund, had capacity to deliver on the contract.

Despite that, a non-competitive process went ahead and the concerns persisted, with Andrews government staffers ultimately dissuading the health department from terminating the contract.

Safeguards designed to ensure the procurement process' integrity and fairness were bypassed and, as a result, the government's conflict of interest was improperly managed, the inquiry found.

The union entity was not a registered training organisation when it was awarded the contract.

Ms Mikakos gave evidence to the inquiry that all ministers and their advisors were under a clear direction of the premier that election commitments must be delivered.

She described the government as "very centralised", with the premier's private office "having its tentacles everywhere".

The investigation made 17 recommendations to ensure, among other things, the role of ministerial advisors was more transparent, and ministers had a clear understanding of their obligations and accountability,