Red flags over local council expenditure

An audit has flagged concerns about weaknesses in Victorian councils’ fraud and corruption controls after finding holes in documentation and potential ‘double dipping’ by councillors. 

Improper spending of public funds may be slipping through the cracks at Victorian councils, an audit warns, after a number of councils were found to have careless documentation and poor corruption safeguards.

Cases of spending without clear benefit to ratepayers, practices that may not meet public expectations and failure to comply with transparency laws were indentified in a recent report from the Victorian Auditor-General.

The audit, which reviewed four Victorian councils, found weaknesses in integrity controls around credit card and fuel card use, reimbursements, conflicts of interest and responses to suspected fraud.

Senior members of councils must take greater care in considering the public interest in key decisions, the auditor-general said.

“(Some individuals) must appreciate that they are accountable to ratepayers and residents and consider how their communities may perceived their actions.”

Credit card use with poor documentation, transactions contrary to council policies and a lack of scrutiny over staff reimbursements were among the issues flagged by the auditor.

The audited councils were found to have gaps in documentation of entitlements and expenditure, including missing councillor claim forms.

Instances where business reasons for an expense were not recorded were also found including an $800 printing allowance being given to councillors without the need for evidence as to how was spent – and despite councils already providing printers for staff.

Some councillors also failed to provide adequate documentation to support vehicle mileage reimbursement claims.

Other instances of poor transaction records include the purchase of alcohol at a council without a clear business need and a dinner between senior council staff and new councillors and their partners that was not related to travel or council meetings.

Evidence of ‘double dipping’

The audit also found an instance of a councillor’s entire private phone bill and internet bill being reimbursed despite council already covering costs of a work phone.

This was despite reimbursement forms showing the councillor did not itemise the bill despite this being required by council policies.

Three of the four councils audited – Shepparton, Wyndham and Strathbogie – were also found to be non-compliant with laws relating to transparency and scrutiny of council spending including, the audit found.

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