A new audit on fraud and corruption tells Victorian councils to “appreciate” their responsibilities.
“Some individuals in positions of authority need to take a broader view of their obligations,” the Victorian Auditor-General’s Office (VAGO) said.
“They must appreciate that they are accountable to ratepayers and residents and consider how their communities may perceive their actions.”
The audit looked at whether the fraud and corruption controls used at the councils’ of Shepparton, Strathbogie, Wellington and Wyndham are well-designed and working.
It centred on fraud and corruption in relation to credit card and fuel card use, reimbursements, conflict of interest management and responding to suspected fraud and corruption.
There are gaps in the fraud and corruption controls at the councils, VAGO found.
The report said important controls are not working in some cases, which can lead to a harmful culture, financial loss or reputational damage. The audit did not find fraud or corruption in the councils, however, it did find:
- Expenditure which was unclear on how residents and ratepayers benefited.
- Practices that may not meet public expectations.
- Non-compliance with legislative requirements that ensure transparency over council practices to their communities and regulators.
The audit made 12 recommendations to the councils, relating to policy reviews on fuel and credit cards and meal and alcohol expenditure.
It suggested requiring evidence and transparency around claims and who benefits from expenses.
Reports on CEO expenditure and expenses relating to senior management remuneration packages were also recommended.
The councils should develop and maintain fraud and corruption incident registers, and implement regular fraud and corruption awareness training for staff and councillors.
All councils excluding Wellington Shire Council should publish councillor expenses for the 2017–18 year on their websites immediately, the report said, and ensure future reports comply with regulations. Strathbogie Shire Council should also cease all sales and the provision of vehicles to council staff as part of exit packages.
The community and the law expect local governments to perform “responsibly and with integrity, accountability, impartiality, and in the public interest,” according to VAGO.
“Fraud and corruption undermines public trust in local government and damage the reputation of the sector. When fraudulent and corrupt activities are undetected, or left unchecked, public money and resources are wasted.”