Central Goldfields Shire Council report released; mismanagement rife

Serious allegations: The Local Government Inspectorate has been investigating Central Goldfields Shire Council. Picture: Rodger Cummins.

Serious allegations: The Local Government Inspectorate has been investigating Central Goldfields Shire Council. Picture: Rodger Cummins.

UPDATE10.30AM 

A damning report detailing extensive financial and administrative mismanagement by the Central Goldfields Shire Council has been released by Victoria’s Local Government Inspectorate.

The report shines a light on the extensive losses council incurred through the sale of certain assets, including a $285,000 loss on the Maryborough Primary School and a 15 per cent loss on a former abattoir site.

The investigation into the shire revealed it sold the former Penney and Lang abattoirs site, in Madmans Lane, Flagstaff, for a 15 per cent loss in 2015, the cost of which would be borne by the ratepayers.

The Madmans Lane site has been the subject of recent controversy, with volunteer Country Fire Authority crews possibly exposed to asbestos during a controlled burn carried out at the request of the shire.

Related: Carisbrook CFA potentially exposed to asbestos by Central Goldfields Shire Council

The report revealed in 2008 the council purchased the Maryborough Primary School site on Inkerman Street for $780,000 and it was later valued at $1 million.  

After a sale offer for the evaluated price fell through in 2011, council proceeded to sell the block for $485,000 – a loss of $285,000. 

Combined with the sale of two other nearby assets, council registered an estimated net loss of  $732,500. 

EARLIER A damning report detailing extensive financial and administrative mismanagement by the Central Goldfields Shire Council has been released by Victoria’s Local Government Inspectorate.

Misuse of government grants, corporate credit cards and errors relating to the sale of council-owned land form the crux of the Local Government Investigations and Compliance Inspectorate report. 

The report highlighted systemic failures in the shire’s governance, from mismanagement of special committees, delegations and councillor code of conduct processes to breaches of procurement processes. 

In a statement, Chief Municipal Inspector David Wolf, who spearheaded the investigation into the shire, said “one of the fundamental issues uncovered in this investigation was the lack of transparency in decision making and management practices”. 

“This has affected the local community and the shire, which is one of the most disadvantaged local government areas in the state,” he said.

Central Goldfields Shire Council mayor Cr Geoff Lovett said he was disappointed his council’s internal processes were in “such poor shape”, while acknowledging there was significant work to be done to ensure its compliance levels were satisfactory.

Related: Central Goldfields Shire CEO stood down following charges

“Our Interim chief executive officer Vince Haining, along with Municipal Monitor Bill Jaboor and Audit Committee Chair John Watson, are preparing a comprehensive draft action plan to address all issues raised in the report”

“This council is disappointed that its internal processes are in such poor shape however we are committed to implementing a plan to achieve best practice outcomes across all shire operations.

“The community can be assured that we are working hard to ensure the positive direction of Central Goldfields Shire and will implement all necessary steps to address and remove current weaknesses.”

The shire’s CEO Mark Johnston was stood down indefinitely from his position in July.

Johnston is facing 41 charges of obtaining financial advantage by deception, false accounting and conflict of interest brought by the LGICI.

Minister for Local Government Natalie Hutchins said: “This is a damning report. Ratepayers and residents deserve a council they can trust and a council that works for them.”

“The council has a case to answer and I look forward to seeing how they respond to the government and their community.”

Minister Hutchins will demand a response from the council within 28 days to the report’s findings.

Full report is available here: http://www.vic.gov.au/lgici/reports-and-newsletters/protecting-integrity-central-goldfields-shire-council-investigation.html 

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