AN AUDITOR-General’s report has exposed City of Greater Bendigo practices that may have ripped off ratepayers.
The report reveals that the conflict of interest policy, supplier payment and tender application policies needed upgrading.
The council paid one contractor almost $800,000 more than the limit for a contract that did not go to tender, according to the Tender and Contracting in Local Government report. The report was tabled in State Parliament yesterday.
Other revelations include:
- The council could not prove its internal civil works unit Bencon was not advantaged in the public tender application process;
- The staff code of conduct had to be completely revised to emphasise conflict of interest issues;
- Seventeen cases of cumulative payments to suppliers exceeding public tender thresholds;
- Members of tender evaluation panels did not have to sign conflict of interest declarations;
- Tender evaluation panels did not provide the council with enough information to support their decisions; and
- Bendigo is the only council audited that did not centralise tendering administration, resulting in “inadequate and inconsistent practice’’.
The report finds that Bendigo failed six of eight “establishing and applying probity standards’’ benchmarks and four of six benchmarks in relation to “procurement practices for promoting value for money’’.
Mount Alexander Shire, which is one of the other four councils audited in the report, also fared poorly.
The council failed to have a code of conduct for staff in relation to probity, passing only two probity standards benchmarks. The shire passed three of six procurement practices benchmarks.
City of Greater Bendigo organisation support director Marg Allan said the council had improved many of its practices while the audit was taking place.
Ms Allan said it was impossible to gauge the effect of past practices on controversial projects such as the Hargreaves Mall redevelopment and Walk Bendigo, but it seemed the previous tender process had put the council at a disadvantage.
“That’s always the benefit of an external audit . . . it identifies the areas in which we can improve.’’
Ms Allan defended the three breaches of the Local Government Act in relation to contractors whose payments exceeded the $150,000 limit required for public tender.
One supplier received $942,000 for marketing services and another received $760,000 for maintenance services between 2007 and 2009 that were not publicly tendered.
She said the amount received by the marketing company had been magnified because it had been given money to pass on to advertisers for advertisements.
Maintenance spending had blown out because different departments were using a supplier’s services, but nobody was tracking the cumulative amount spent.
Auditor-General Des Pearson concludes in the report: “Council procurement policies were adequate. Nevertheless, limited guidance to staff coupled with weaknesses in local management controls and oversight arrangements meant there was generally less than desirable assurance that probity standards had been consistently applied, and that conflicts of interest were avoided.
“There is significant scope at the councils examined to achieve better value for money through procurement. There is a lack of attention to the benefits of strategic procurement, and a lack of clarity on statutory obligations was evident when aggregate payments to suppliers exceeded the tender thresholds.’’
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