An inner-city council has boosted its chief executive's pay to almost $400,000 a year, despite a leaked internal report saying the council's customer service "lacks functional effectiveness".
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Darebin City Council has had a state government inspector overseeing its work since January, after an Ombudsman investigation revealed misuse of council funds, dodgy planning issues and conflicts of interest.
Despite this, and despite an outstanding bullying allegation against him, chief executive Rasiah Dev's last week gained a pay rise from $387,000 to $395,000.
His salary is topped in the metropolitan area only by Melbourne City Council's chief executive Kathy Alexander, who is on about $420,000.
Mr Dev has overseen the council since 2010 and is set to be reappointed next month for up to five years by a majority of Darebin's councillors.
His reappointment would come despite the wide-ranging Victorian Ombudsman investigation into his council in 2013.
The investigation was serious enough to lead to municipal inspector Peter Lewinsky being appointed to keep a watchful eye on the council until 2016.
Mr Dev sent an emotional and highly unusual farewell email to all 1300 Darebin staff two years ago, in which he said he had "lost the will to fight back and decided to quit from local government".
He said he had been interviewed five times by the Ombudsman's investigators, "and then called about 10 times on the phone" by inspectors for more questioning over allegations at the council.
A spokesman for the council confirmed that an investigation had been conducted into the bullying allegation from a staff member against Mr Dev, and had now concluded. "The matter was confidential and we are unable to comment on it," she said.
The Age has also seen a confidential report prepared for the council as part of a restructure, which describes its customer service department as ineffective and lacking linkages with other departments.
"Customer service in its current form is dysfunctional ... and lacks functional effectiveness," it says. The report cites behavioural issues, poor functioning and low morale.
A spokeswoman for the council said that its customer service team had provided "very effective service to our community", and rated well in satisfaction surveys.
