Victoria's anti-corruption watchdog says the head of Bendigo Health used the organisation's employees to do unpaid work on his wife’s properties.

Independent Broad-based Anti-corruption Commission (IBAC) inquiries into CEO John Mulder and hospital construction manager Adam Hardinge found evidence that Mr Mulder used Bendigo Health resources for his own benefit.

The IBAC was looking into corruption claims relating to the $630 million Bendigo Hospital, which opened to much fanfare in January.

Mr Mulder got employees to work at properties owned by his wife in the Bendigo suburbs of Flora Hill and Spring Gully, and to deliver a set of glass doors to a property at Torquay.

The work – which IBAC says was worth about $10,000 – was either unpaid or paid belatedly, after Mulder became aware of the IBAC investigation.

“Mr Mulder's conduct is particularly concerning in light of his responsibilities as CEO,” IBAC’s report said.

“He effectively sent a message to staff that it was acceptable to use the health service's resources for personal benefit.”

The investigation also found former construction manager Adam Hardinge engaged in corrupt conduct including the theft of building materials and collusion with contractors to defraud Bendigo Health of thousands of dollars.

Mr Hardinge used Bendigo Health materials in renovations to his private residence, selling a $70,000 electrical transformer that was the property of Bendigo Health to a contractor without proper authorisation.

He also arranged for more than $21,000 to be paid into his personal trust account, being the proceeds of scrap from works associated with the new hospital.

Mr Hardinge was also found to have authorised 25 demolitions and minor building works without building permits.

IBAC says Bendigo Health is taking steps to certify the integrity of that building work.

Mr Mulder was found to have engaged in conduct that was contrary to the Victorian Public Sector Code of Conduct as well as Bendigo Health’s organisational values. He temporarily stood down as Chief Executive Officer in early February 2017.

Mr Hardinge was charged by IBAC and subsequently pleaded guilty to seven charges of theft, one charge of obtaining property by deception, and one charge of attempting to obtain financial advantage by deception.

He was convicted on all criminal charges and fined $15,000 in relation to the theft charges, and has agreed to pay $5000 to the Bendigo Health Foundation on the other two charges.

IBAC’s investigation identified deficiencies in Bendigo Health’s systems and controls in a number of areas, and made the following recommendations to address the issues:

  • reviewing Bendigo Health’s integrity and corruption prevention policies and procedures
  • introducing a ‘declarable associations’ policy
  • increasing training to staff that addresses corruption risks and ethical dilemmas

IBAC’s full report is accessible here.