Hobsons Bay has been named as one of three metropolitan councils that used “risky” practices that could allow corruption in handing out ratepayer dollars at councillors’ discretion.
The Local Government Investigations and Compliance Inspectorate, in its Review of Councillor Discretionary Funds report, listed Hobsons Bay as one of the councils that had practised little or no accountability.
Maribyrnong was among four identified as having transparent and “accountable” practices.
Thirty-two of Victoria’s 79 councils have a councillor discretionary fund (CDF), allowing councillors to allocate money as they see fit.
The report stated CDFs lacked accountability and transparency, and created a situation that “may allow” corrupt practices. “Generally, feedback received confirmed that councillors are protective of discretionary fund practices, almost to a point of treating available funds as being for their own personal distribution, without the need for adherence to stringent allocation/approval guidelines,” the review stated.
“Allegations of ‘rubber stamp’ approvals for CDF payments in council meetings were common in the course of the inspectorate’s review.”
The review prompted the inspectorate to investigate the actions of two councils, not named in the report, including one council where three councillors committed expenditure without proper authorisation, and another council where complaints have been made relating to their CDF.
Hobsons Bay was flagged as having “poor CDF practices” with a mayoral discretionary fund of $44,000 that required no accountability on the part of the mayor, had no recorded costings, timeframe, transparency or assessment criteria.
Hobsons Bay CEO Chris Eddy said the council had included details of mayoral and ward-fund spending in its annual report for the first time last financial year.
“The council has already taken steps to improve the process for allocating funds under the mayoral program, and now reports this expenditure in its annual report. We will take all necessary additional steps to ensure that the mayoral program is fully compliant.”
The inspectorate recommended all Victorian councils incorporate CDF schemes into other grant programs, to avoid breaching the Local Government Act. Municipal Association of Victoria president Bill McArthur said there was no need for CDF legislation or “heavy-handedness” and called on councils to acknowledge the inspectorate’s review.
Local Government Minister Jeanette Powell said she would consider the inspectorate’s recommendations.
