Councils warned about corruption

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MORNINGTON Peninsula Shire, neighbouring Frankston and municipalities across the state have been warned to watch out for corruption when buying goods and services.

The Independent Broad-based Anti-corruption Commission (IBAC) says corruption and kickbacks uncovered at Darebin and Ballarat councils “are likely to be faced by most, if not all, councils in Victoria”.

“Allegations of corruption associated with council procurement practices and processes are a recurring theme in the complaints received and investigated by IBAC,” IBAC commissioner Robert Redlich QC said.

In a special report to parliament IBAC warns that councils need to consider the way they manage procurement to reduce risks of corruption.

“This report highlights a range of procurement-related corruption risks and vulnerabilities which, while they were found in two councils, are likely to be faced by most if not all councils in Victoria,” Mr Redlich said.

IBAC investigated allegations that council employees at Darebin and Ballarat subverted procurement processes for their own benefit and the benefit of associates.

The report to parliament states that a former project manager at the Darebin City Council received cash, gifts and other benefits for helping an associate’s company win more than $16 million in contracts.

A former manager at the City of Ballarat Council had enabled associates and family to win contracts, in exchange for financial “kickbacks”. In 2017, the manager was convicted of a range of offences and sentenced to three years’ jail and ordered to repay $31,200.

Three other people, including his wife, pleaded guilty to other charges.

IBAC says Victorian councils collectively manage about $84 billion in public assets and annually spend around $7 billion on services.

“Considerable power is vested in council employees to source suppliers, manage contracts and authorise payment for goods, services and works – spending millions of dollars of public money,” Mr Redlich said.

“Public sector corruption it is not a victimless crime. It wastes taxes and rates that should be used to operate and maintain Victoria’s schools, hospitals, roads and other vital public services and projects. And it damages the reputation of organisations and undermines community’s confidence in the public sector.”

As a result of its investigations IBAC has recommended Local Government Victoria consider developing a code of conduct for local government suppliers, which would outline the standards expected of suppliers including in relation to reporting suspected misconduct or corrupt conduct on the part of council employees and other suppliers.

First published in the Frankston Times – 14 October 2019

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