17 June 2022

Skills Minister expects CIT to 'reset' and focus on teaching after 'unacceptable' multi-million-dollar contracts

| Lottie Twyford
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Chris Steel

Minister for Skills Chris Steel has described it as “unacceptable” that CIT entered into multi-million dollar contracts after he and Procurement ACT had raised concerns about them. Photo: Region.

Expressing concerns about its “unacceptable” conduct, ACT Skills Minister Chris Steel has accused the board of the Canberra Institute of Technology of causing “significant reputational damage” to the institution.

Mr Steel has written to board chair Craig Sloan instructing the board to “act with urgency” to restore confidence in CIT for staff, students and the community after it was revealed more than $8.5 million worth of contracts were awarded to a “systems and complexity thinker” apparently without board oversight.

He has also told the board it must prioritise teaching and learning.

In a letter sent to the Opposition and the Minister, a CIT staff member said they had “lost confidence” in the institute’s executive and was seriously concerned about its priorities.

“We have seen a huge disconnect between teaching staff and administrative staff at CIT. Teaching staff have constantly raised issues of failing infrastructure, inadequate online learning platforms and IT support services for both teachers and students,” the teacher wrote.

“It is difficult to see the value created within the organisation [by these contracts].”

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The Minister admonished the CIT board who earlier this week said they couldn’t confirm if an almost $5 million contract with a company owned by consultant Patrick Hollingworth for items such as “establish[ing] and self-sustain[ing] practices that allow for iterative learning cycles” represented value for money.

Instead, the board said responsibility for those contracts sat with the executive.

But an “underwhelmed” Minister did not accept this and has now demanded the board review the governance arrangements which allowed that to happen.

“It’s concerning that it appears the board did not have significant visibility of these contracts, particularly for this latest, large contract that has been signed for $4.99 million,” Mr Steel said.

The Minister said he would now be issuing broad directions to the board to ensure that the board would have financial controls and oversight in place in the future.

The board, which already committed to an audit of the recent contract, has until the end of next month to complete this.

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Since news of the contracts broke last week, it has emerged Mr Steel’s office had previously raised concerns with other contracts also issued to Mr Hollingworth’s companies – as had Procurement ACT on issues such as lack of deliverables and an unusually short time frame.

Mr Steel said it was unclear whether Procurement ACT’s advice had been followed and he believed the audit would pick up on that if it had, in fact, been the case.

“It is unacceptable that after I gave the message that [previous contracts] weren’t in line with community expectations, ultimately CIT didn’t do anything and went ahead with the latest contract anyway,” he said.

It’s understood current deputy-chair and former ACT Senator Kate Lundy will be appointed as chair at the end of this month as the current chair’s term is set to expire. A new deputy chair will also be appointed, and Mr Steel said he expected a “reset” would take place going forward.

Mr Steel said he would issue a new statement of expectations to the incoming board chair and he was confident in a change of leadership.

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Due to CIT’s governance structure, Mr Steel does not have oversight of the CEO’s appointment and when asked if he had confidence in CIT CEO Leanne Cover, the Skills Minister would not be drawn, instead describing that as a matter for the board.

“It is clear through my letter that they should be reviewing what has occurred and that includes what the executive has done in relation to these contracts,” he said.

“I’ve encouraged them to review that matter and I’ve made it clear that senior executives are expected to appropriately manage the financial, human and reputational resources of an organisation.”

Mr Steel has repeatedly pointed out he does not have day-to-day oversight of CIT and that he cannot ask the institute to do “specific things”. But he said the government had moved quickly and he would continue to do what he could.

Elizabeth Lee

Leader of the Opposition Elizabeth Lee has called for Minister for Skills Chris Steel to resign. Photo: Region.

Governance structure notwithstanding, Opposition Leader Elizabeth Lee has argued the buck stops with the Minister.

She argued the board is answerable to the Minister who is then answerable to the Assembly and, through it, to the public.

“The Chief Minister and the Minister for Skills still have not come clean with the public about what it is they knew, when they knew and why – under their watch – millions and millions of dollars have gone into these contracts,” she said.

“This government is in desperate damage control when they know this absolutely stinks – it’s too late.”

She has called for the Minister to resign and for the CEO to “answer questions”.

CIT and Mr Hollingworth have been contacted for comment.

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canberraflorey0111:06 am 19 Jun 22

CS was Teflon on the radio, no responsibility for CIT board, no influence over their decisions or governance. Under ACT legislation Minister for Skills is RESPONSIBLE for governing in relation to CIT and a few other matters. With respect to this matter, you were not paid for tick and flick.

Mr Complexity Thinker, the $5m consultant, sharing insights on why the future belongs to the alpinist:

Adrian Faccioni1:54 pm 18 Jun 22

CIT has been a finalist in the national RTO awards (top 3) in 3 of the last 5 years (achieved under the current transformation plan). If that is an example of an organisation losing its way, maybe we need more of our current directorates “losing their way”!!

To put this into context as taken from the Australian Training Awards website-‘The Australian Training Awards is the culmination of winners from state and territory training awards articulating as finalists in aligned categories’ I.e, if they win the state award for best largest RTO then they move to the category of 8 in the finals, I.e., the represent the ACT in a National final.

It would be interesting to compare if the actual winners of the category over the years also allocated equivalent funds for this type of work? Or are they getting there through there own in house expertise, or with more appropriately procured services?

The point is why are exec asking for mentoring to the tune of 8 million? Do all the other categories winners spend this much too or need this much support?

What an adorable display of gallantry toward the (now stood-down) CIT CEO. Naive and foolish, in so many ways, but an admirable attempt. The awards referenced are actually known as The Australian Training Awards, not the “national RTO awards”. I doubt ol’ mate Hollingworth’s KPIs included ensuring CIT get nominated for the “national rto awards”, or did they?

Stephen Saunders10:01 am 18 Jun 22

Open and shut case but nobody is punished and it looks as if the perp keeps the massive loot. That should teach-the-teachers the timeless lessons of discipline and due diligence – not.

Stephen, how exactly is it an open and shut case?

Whilst I have my concerns around the wording of the contract, so far there is little evidence either way.

And even if the contract delivered nothing, the consultant is not a “perp”. He’s simply delivered a product as defined by a contract. Of course he would get to keep the money, he’s got a legal agreement in place.

If you’ve got some actual evidence of fraud, I’m sure the government would love to hear it.

Even with the claim that nobody can do anything, each party has the ability to make the right decisions based on their own evaluation of the situation and take responsibility for their roles in this whether through a lack of skills, a lack of follow up, a lack of listening, a lack of oversight etc.

– Has someone started a petition on this so that the public can have their say too?

I don’t really feel that those involved (CEO, Contractor, Board and Minister) are really listening to the CIT staff, students and the ACT public. And I don’t think an internal review and some ‘strong’ words is enough…not 8 million enough.

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