Corruption Red Flags: What Can Organisations Do Before ICAC Gets Involved?

This week, we attended a presentation by NSW Independent Commission Against Corruption (ICAC) Commissioner the Hon Paul Lakatos SC, hosted by the Australian HR Institute (AHRI).

The Commissioner discussed two recent ICAC investigations and their findings:

• Operation Landan (April 2026): Exposed widespread failures in recruitment, procurement and organisational oversight at School Infrastructure NSW, including favouritism, improper contractor engagements, undisclosed conflicts of interest and reprisals against employees who raised concerns.

  
  

• Operation Tivoli (August 2026): Uncovered false qualifications and employment references, improper contract awards to an associated business, contract splitting and undeclared secondary employment within the Illawarra Shoalhaven Local Health District.

Drawing on these investigations, Commissioner Lakatos highlighted several corruption red flags HR professionals should watch for.

Many of these warning signs are also familiar to us through our work in workplace and corporate investigations. They can arise long before misconduct is established, often during routine recruitment, appointment and decision-making processes.

The Red Flags

Below are some hypothetical scenarios illustrating the types of warning signs organisations should be alert to, and why seemingly minor inconsistencies can warrant closer examination.

1. Unusually high number of qualifications obtained in a short period.

A candidate applying for a senior executive position claims to have completed a Master of Business Administration at the University of Sydney, a Master of Public Policy at the University of Oxford and a Master of International Relations at the University of Melbourne, all between 2023 and 2025.

On reviewing their CV, the recruitment team notices that the study periods overlap, with the candidate apparently undertaking full-time postgraduate studies in Sydney, Oxford and Melbourne during the same period.

While completing multiple qualifications is not inherently suspicious, the combination of overlapping dates, different geographical locations and typical course durations raises questions about how the qualifications were obtained and whether they can be independently verified.

2. Questionable professional memberships or membership categories.

A candidate applying for a senior finance executive position lists themselves as a Fellow of CPA Australia (FCPA) on their CV, suggesting they have achieved a senior level of professional recognition.

During routine credential verification, the recruitment team discovers that the candidate holds a lower membership category and has not been admitted as a Fellow. Despite this, they have used the FCPA post-nominals on their CV, LinkedIn profile and previous job applications.

The red flag is not that the candidate holds a lower membership category, but that they have represented themselves as holding a professional designation they have not earned.

A candidate who accurately describes their membership status presents no obvious concern. However, someone who claims a senior professional designation without the corresponding recognition warrants further investigation, particularly where that designation may have influenced the recruitment decision.

3. Qualifications from dubious institutions or certificates that appear inauthentic.

A candidate applying for a senior management position claims to hold a Master of Business Administration from an American university called Westbridge International University.

During routine credential verification, the recruitment team discovers that the institution's website claims international accreditation, but the university does not appear in the US Department of Education's database of accredited institutions.

Further examination of the candidate's certificate reveals an unusual university logo, inconsistent formatting and the signature of a university president whose name cannot be independently verified.

The red flag is not that the qualification was obtained overseas or from an unfamiliar institution, but whether the university is legitimate, its accreditation claims are accurate and the qualification can be independently verified.

A degree from a small or lesser-known university may be entirely legitimate. However, an institution with unverifiable accreditation, questionable certificates or no reliable record of the qualification warrants further investigation.

4. Unusual familiarity between a panel member and candidate, or seemingly rehearsed answers.

A candidate interviewing for a senior executive position at a NSW government agency provides exceptionally detailed responses to questions about managing internal staff conflicts and addressing operational risks.

During the interview, the candidate refers to a confidential organisational restructure that has not been publicly announced. They also provide answers that closely follow the panel's internal interview questions and scoring criteria.

One panel member appears particularly familiar with the candidate, referring to previous conversations and professional experiences that were not disclosed in their conflict-of-interest declaration.

The red flag is not that a candidate is well prepared or has previously worked with a panel member, but whether they have received preferential access to confidential information or whether an undisclosed relationship has compromised the independence of the recruitment process.

A candidate who has thoroughly researched the organisation and prepared strong responses is demonstrating good interview skills. However, advance knowledge of confidential interview questions, undisclosed relationships or unusual familiarity with internal assessment criteria warrants further investigation.

5. Limited understanding of the role, recruitment processes or legal obligations.

A recruitment panel member is responsible for selecting a senior manager but cannot clearly explain the position's essential requirements, how candidates will be assessed or the organisation's conflict-of-interest declaration requirements.

When questioned about the recruitment process, the panel member provides inconsistent explanations of the selection criteria or cannot explain why particular qualifications and experience were considered necessary.

The red flag is not simply a panel member's lack of technical expertise, particularly where HR specialists are supporting the process, but whether those responsible for recruitment understand and properly apply the requirements governing their decisions.

A panel member who seeks clarification about an unfamiliar recruitment policy may be acting appropriately. However, a panel chair who cannot explain the assessment criteria, applicable procedures or basis for recommending a candidate warrants further examination.

6. Apparent favouritism towards a particular candidate.

A recruitment panel at a NSW government agency interviews four candidates for a Director of Operations position. Three candidates have extensive management experience and meet the essential selection criteria. The fourth candidate has limited leadership experience and receives the lowest overall interview score.

Despite this, the panel chair repeatedly advocates for the fourth candidate, arguing that they are the "best cultural fit" without providing evidence to support this assessment.

When other panel members raise concerns about the candidate's lack of experience, the chair dismisses their objections and arranges an additional informal meeting with the preferred candidate, an opportunity not offered to the other applicants.

The chair subsequently recommends the candidate for appointment, despite the panel's documented assessment favouring another applicant.

The red flag is not simply that panel members disagree about the strongest candidate, but whether one applicant receives preferential treatment or is recommended for reasons that cannot be justified against the established selection criteria.

A panel member may legitimately prefer a candidate based on relevant experience, demonstrated capability or other job-related considerations. However, overlooking significant deficiencies, providing unequal opportunities or disregarding assessment results without documented justification warrants further investigation.

7. Failure to follow recruitment procedures, document decisions or act independently.

A recruitment panel at a NSW government agency is responsible for appointing a new General Manager. The agency's recruitment policy requires a three-person interview panel, documented assessment scores and signed conflict-of-interest declarations.

However, the panel chair conducts an interview with a preferred candidate without the other panel members present. The chair subsequently recommends the candidate for appointment, despite no completed assessment matrix, interview notes or documented comparison with the other applicants.

When HR requests the recruitment records, the chair advises that the decision was based on their personal assessment of the candidate's suitability. Further enquiries reveal that the chair had also received informal instructions from a senior executive to progress the candidate's appointment.

The red flag is not necessarily an isolated administrative error, but whether departures from established procedures undermine the transparency, fairness or independence of the recruitment decision.

A missing signature or minor documentation error may be readily explained and corrected. However, bypassing mandatory recruitment steps, failing to retain assessment records or allowing individuals outside the panel to improperly influence appointment decisions warrants further investigation.

Importantly, the red flags outlined above are exactly that: warning signs, not proof of misconduct. Each may have a legitimate explanation, but that does not mean they should be ignored.

So, now that we know what to look for, what can organisations actually do about it?

You don't need ICAC's powers to act on red flags

ICAC has extraordinary statutory powers to compel evidence, execute search warrants and examine witnesses. But by the time matters reach ICAC, the individuals involved may have been in their positions for years, with questionable recruitment practices potentially leading to further misconduct, compromised decisions and significant organisational harm.

There is a great deal organisations can do to identify, question and independently verify red flags as they arise, by building checks and safeguards into recruitment processes to identify and address integrity risks as soon as they arise.

So what does this look like in practice?

Organisations can take practical, proportionate steps to identify and address recruitment red flags before an appointment is made.

The key is to go beyond what is written on paper or stated during an interview. Independently verify the information, seek corroborating evidence and test whether the facts support what is being claimed.

How Scout Investigations & AML can help

Not every organisation has the time, resources, tools or specialist expertise to independently examine recruitment red flags.

At Scout Investigations & AML, we help organisations investigate concerns proportionately, fairly and independently, drawing on our expertise in factual investigations, due diligence, financial crime and digital intelligence.

Whether it's verifying questionable credentials, examining undisclosed relationships or reviewing recruitment irregularities, we help organisations establish the facts before concerns become bigger problems.

If you've identified a red flag but aren't sure how to investigate it, contact us for a confidential discussion.

Sources

• NSW ICAC, Investigation into the conduct of the then-chief executive of School Infrastructure NSW and others (Operation Landan), April 2026.

• NSW ICAC, Investigation into the conduct of an Illawarra Shoalhaven Local Area Health District employee (Operation Tivoli), August 2026.

• NSW ICAC, LinkedIn summary of Commissioner Paul Lakatos SC's AHRI presentation, 28 October 2026.

ICAC Commissioner Hon. Paul Lakatos SC at the AHRI Presentation at Hays Recruitment Sydney office on 28 October 2026.