YARRIAMBIACK Shire Council is under fire after it was revealed yesterday in a Local Government Inspectorate report alleging of mismanagement and possible theft of ratepayer funded assets had occurred within the council structure.
The report ‘Protecting Integrity: Yarriambiack Shire Council Investigation’ describes the governance culture of the organisation prior to late 2018 being “generally poor”.
After a whistle-blower came forward with allegations of council staff who had sold machinery, chemicals, fuel and gravel, and profited from proceeds, the local inspectorate started their investigations in June 2018.
A number of allegations were raised with the Inspectorate in relation to the use and procurement of resources at the Hopetoun depot.
The allegations include private works, inappropriate use of council equipment, unauthorised sale of plant equipment and consumables and leasing of staff vehicles by council.
Inspectorate staff attended council offices in September 2018, April 2019 and May 2019 to request documents and interview council staff; they interviewed 20 staff from the Hopetoun depot in August 2019.
The report also addressed the claim of a cherry picker disappearing in the 1990s without explanation or documentation for which the council continued to pay registration and insurance for until recently.
There were also concerns around staff use of corporate credit cards without management approval.
Fixing local governance
Yarriambiack Shire Council Mayor Graeme Massey said they want to be transparent and remedy all the issues presented to council.
“We’re not hiding anything, we want to be completely transparent and we accept the findings,” Mayor Massey said.
“We’ve got to work hard, people expect value over the rate dollars and if some people are being favoured over other groups of course you will be upset. We’ve got a better understanding now as councillors of how we can address matters like that.
“We control where money goes, but we can’t control how they spend that money, when it gets to their department.
“That’s what we need to get better control over. We need to have it all documented that it’s completely above board all the acts are complied with.
“There’s degrees of frustration and anger, we accept what’s been done, we’re endeavoring to rectify that. You should still have faith in your council.”
Chief Municipal Inspector David Wolf said they are confident Yarriambiack Shire Council will work to improve their current status.
“Our work focused on specific allegations where community assets and resources had either not been properly managed or were used to the benefit of individuals, no the community as a whole,” Mr Wolf said.
He said the shire has expressed strong interest to improve local governance and practices.
“We have been encouraged by the willingness to improve and the assistance from administrative and operational.
“All the details of the allegations, issues and findings are contained in our report and the inspectorate will continue to mentor the implementation of recommendations made in that report.”
Staff leaving the shire
Mayor Massey said two members of council recently resigned, however there was no indication the release of the report was the reason for their leaving.
“Indirectly their leaving is coincidental with the report coming out and it’s confidential, the reasons have not been made public. I can’t say that because of the report is why they left council,” Mayor Massey said.
“Over a period of time there’s been more than that who have left, there’s been retirement and people who have resigned, if it’s related to the report is still unclear.”
Leasing out council assets
The whistle-blower told the Local Government Inspectorate that prior to June 2018 staff were encouraged to make some extra money by purchasing trucks privately, then leasing them to council.
One staff member reportedly made $174,500 in less than two years, for the lease of his truck and trailer; another was paid $457,000 over eight years.
Mayor Massey said there were no formal contracts in this case.
“There was no proper contract, it was a verbal contract. The tender process for procurement wasn’t open to anyone and it was just very poor practice,” he said.
The report stated senior management also claimed to be unaware of the payments.
Allegations were raised in an anonymous complaint and during the Inspectorate’s visit to council that private works were carried out by council staff using council equipment.
Some private works were being done during work hours with staff allegedly receiving cash payments or payments in kind for the work such as slabs of beer.
Mayor Massey said the practices conducted under the council was a product of an old school country mentality of helping out a friend.
“It’s been a practice that has always gone on in smaller country areas, use of equipment to help people out and it was never really controlled. You are allowed to use council equipment so long as it’s recorded what you’re using it for, and the accounts are done,” he said.
The report states plant and equipment such as graders and rollers were allegedly seen working on farm properties, with cash in hand or gifts being given to the operator of equipment or depot manager.
The Inspectorate found the council was not keeping electronic storage of documents prior to March this year and they were storing documents in cupboards, drawers and on desks.
It was also found a number of staff were using their own databases to record the work but which was not openly accessible to the entire organisation.
Mayor Massey said under current council governance they will be implementing modern file storage systems.
“All council staff now have a code of conduct work practices have been informed on what their job is and it needs to be carried out in a correct way,” he said.
“Those older practices are no longer conforming to community values, we’ve got to update to be contemporary rather than live in the past. We accept the report, we accept that over times there have massive errors of judgment and we want to move forward.”
Miscalculated redundancy packages
Allegations were also made where four senior officers potentially received termination payments which ranged between $166, 000 and $416, 000.
There was no documentation provided as to how these arrangements were created but the former CEO was responsible for ensuring senior officer contracts followed the legislation and met industry standards and community expectations.
When asked about the allegations, the former CEO did not offer an explanation and believed he may have “inherited them” from previous contracts.