A tourism manager used council credit cards to pay for espresso martinis, car washes, spa resort massages for family members and hundreds of dollars worth of booze, a report from the Victorian Ombudsman shows.
The misuse was first exposed in 2018 but senior management’s response was so inadequate it ‘gave rise to the impression of a cover-up’, Ombudsman Debrorah Glass says in a report tabled in parliament last week.
Deborah Glass said while integrity bodies received a number of complaints about credit card misuse at Warrnambool City Council her office focused on one individual.
David McMahon started as Manager Visitor Economy and City Growth at Warrnambool on November 2016.
He resigned in 2019 after his credit card spending continued to raise red flags .
$800 espresso martini bill
After a Victorian Tourism Industry Council Conference held at the RACV Cape Schank resort in July 2018 Mr McMahon submitted a receipt for $2,195 for food and beverages.
Itemised receipts worth $1,600 show hundreds of dollars were spent on alcohol including almost $800 on espresso martinis over three days.
The people of Warrnambool do not expect their hard-earned payment of rates to be funding espresso martinis, travel to Melbourne coinciding with football games, spa resort massages for family members, or hundreds of dollars in alcoholic beverages.Deborah Glass
A list of Mr McMahon’s credit card expenses between 2017 and 2018 for $5,666 also included alcohol, car washes and spa retreat vouchers.
In September 2018 Mr McMahon incorrectly invoiced more than $1,000 of dollars of food and drink – including pork belly, Bombay Gin, Frangelico and $325 dollars for three bottles of wine – as ‘room hire’.
There were also invoices for four massage vouchers from the Logan’s Beach Spa Retreat valued at $90 each, two of which were used by Mr McMahon’s family members.
The ombudsman also raised questions about a payment of $1,200 for tickets to the Port Fairy Folk Festival in 2018, and 35 tickets worth $1,750 for Oktoberfest.
Mr McMahon paid back $5,000 in November 2018 after meeting with the CEO Bruce Anson when the transactions were reviewed. He paid back $3,000 when he resigned in June 2019.
Mr McMahon said he worked long hours his job, drank too much and became tired, which led to him making some “poor decisions” and errors, the report said.
Deborah Glass said while her investigation didn’t find evidence of systemic abuse at the council, her inquiry didn’t deal with all the allegations of misuse that arose, and media reports and other complaints to integrity bodies suggested it was much more “prevalent and persistent”.
“How many bad apples were spoiling the Warnambool City Council barrel?” she asked.
“Local reports of widespread credit card and other financial misuse suggested many, as did the number of allegations being made to Victoria’s integrity bodies.
“The people of Warrnambool do not expect their hard-earned payment of rates to be funding espresso martinis, travel to Melbourne coinciding with football games, spa resort massages for family members, or hundreds of dollars in alcoholic beverages, described on the invoice as ‘Room Hire’.
The impression of “large number of snouts in the public trough” was exacerbated by overly generous hospitality policies, the ombudsman said, and she added and there was a lack of guidance about wrong behaviour.
In 2018-19 council had 93 credit cards with limits of between $500 and $10,000. That has since been reduced.
Policy and guidance at Council have also been tightened, the report said.
Comment has been sought from Council.
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