By Paul Hemsley
Federal parliamentarians might be hogging the limelight on dubious expenses claims, but the Victorian state government is hard on the trail of highly questionable purchases by councillors elected to local government positions.
A report handed down by Victoria’s municipal watchdog, the Local Government Investigations and Compliance Inspectorate, has found that 32 out of 79 of the state’s councils operate councillor ‘discretionary funds’ or CDF programs.
These included up to a dozen local governments that allowed councillors to freely authorise unlimited CDF payments from a combined total of more than $9 million per year across Victoria, with grants ranging from $3,000 to $500,000.
The discretionary nature of the funds may well save on tedious bureaucracy, but the Inspectorate isn’t happy about the risks of money without a paper trail.
The report firmly warned that some councillors risk breaching the Local Government Act if councils don’t require them to seek formal approval through a council resolution or if they don’t have stringent approval guidelines.
Such “risky” behaviour could include potentially fraudulent or corrupt practices by individual councils where CDFs could be committed to self-interest groups, which is in breach of the Act and could have councillors liable for a “requisite penalty”.
A council’s reputation could also take a hit if public funds are misspent, the report said.
The investigation has been a wake-up call for local government in Victoria as it has resulted in three councils scrapping their CDF schemes, along with one council suspending its scheme pending review and 16 councils committing to reviewing their CDF policies and seven councils amending their CDF processes.
Victorian Minister for Local Government Jeanette Powell said council expenditure should be properly authorised by decisions of the full council or special council committees, or by officers exercising clearly documented delegations in accordance with council policies.
“I will now consider the inspectorate’s recommendations including the proposal to amend legislation to abolish or place tighter controls on councillor discretionary funds,” Ms Powell
She said council funds are for the benefit of the whole community and it is not the role of individual councillors to hand out public money to community groups at their sole discretion.
“Given the risks involved with discretionary funds, all councillors, Council chief executive officers and senior finance officers are strongly recommended to read and act on the issues contained in the Inspectorate’s report,” Ms Powell said.
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