Executives bringing private sector norms into the public sector continue to cause concern, with a water corporation boss found to have claimed a high-end barbecue, household furniture and alcohol on the public purse.
Former Goulburn Murray Water managing director Patrick Lennon claimed about $40,000 in expenses while on a $380,000-plus annual salary, Victorian Ombudsman Deborah Glass has found.
Lennon received a ‘living away from home allowance’ following his move from Melbourne to Shepparton, despite advice he was not eligible and had already claimed a relocation expenses reimbursement of $20,000.
This included household items Glass says “could not reasonably be considered as ‘relocation expenses’” such as a mattress and bed worth over $4000, a $2000 dining set, and a barbecue and outdoor dining setting, each costing around $1700.
The living away from home allowance provided Lennon with an $11,000 tax break. His ongoing pursuit of the tax break led the corporation to spend over $17,000 on legal and accounting fees to determine his eligibility.
He also claimed more than $21,000 of expenses in 13 months for food and drinks, including alcohol and hotel stays in Melbourne. This was despite Goulburn Murray Water’s board policy for director reimbursement making it clear that “alcohol is not claimable”.
The reimbursement claims were approved by then-chair Joanne Anderson.
“He thinks everything that happens to him between seven in the morning to when he goes to bed is necessarily an expense incurred relating to Goulburn Murray Water,” reads one witness statement.
It’s the latest example of a problem Glass has previously highlighted — recruits from the private sector feeling entitled to claim expenses clearly out-of-bounds for public servants.
“What may be acceptable behaviour in a corporate environment — ‘you’d claim for everything’, we were told — is simply not acceptable when the shareholders are the public,” Glass argues.
“Public sector codes, rooted in core public sector values of integrity and accountability, exist for a reason.
“We do not expect our senior officials to be housed, fed and watered on the public purse, on top of a generous salary. We do not expect to pay for relationships to be lubricated by alcohol.”
These expectations should not have been foreign to Lennon, who started his career as a public sector engineer and held both public and private positions along the way.
More than a drop in the river
And it’s not just about the amount of money.
Given Goulburn Murray Water manages over $4 billion, allegations its managing director was inappropriately claiming expenses in the thousands of dollars “may seem minor”, Glass says.
“But to a community facing years of hardship because of the drought and dairy crisis, and with an organisational message that GMW needs to cut costs and lower debt, this conduct seems particularly out of line with public expectations.”
The former managing director started in October 2016 and “ceased employment with GMW” in late September 2018 — to use the ombudsman’s phrasing — while the former chair resigned in July 2018.
Glass made seven recommendations, all of which have been accepted. This includes that the Victorian Public Sector Commission develop inductions for incoming board members, chief executive officers and managing directors including instruction on codes of conduct, and the gifts, benefits and hospitality policy.
The ombudsman also thanked the whistleblower who made the protected disclosure complaint which prompted the investigation, saying this case demonstrated the value of people raising concerns with independent bodies.
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