Former New South Wales premier Barry O'Farrell lost his job from an ill-judged freebie, and staff at the Victorian government-owned water businesses have now been given tighter instructions for reporting and accepting the gushing hospitality sent their way.

Gifts have included travel to a conference in Florida valued at $5542 from a contractor, an Austrian study tour valued at $2000, a free barbecue, camera, pearl necklace, silk scarf, nine slabs of beer, bottles of Moet & Chandon and tickets to a Tony Blair luncheon at Sofitel.

Most of the gifts are from businesses that have existing contracts or financial relationships with the water companies and the reason for providing the largesse is often recorded as  "relationship building" and "networking". Some of those providing the hospitality have contracts worth millions of dollars with the water businesses.

When asked about the hospitality, one contractor said they did it because "developing and maintaining client relationships is fundamental to sustainable business. Sometimes this may include appropriate and modest hospitality".

In two years, staff at City West Water received more than $90,000 in gifts and hospitality, at South East Water the offers hit almost $70,000 over five years. The total value of gifts and hospitality at Melbourne Water and Yarra Valley Water was unknown.

Gifts included a ticket to corporate box at a Collingwood vs Hawthorn Game last year for the manager of risk and compliance at City West Water.

The general manager finance and company and the chairman at Yarra Valley Water were given tickets to the Australian Open Tennis by "current internal audit services provider" Moore Stephens.

There is no suggestion there was anything illegal or outside the rules from the acceptance of the gifts – but rules of disclosure at the water businesses have been tightened.

Earlier this year, Victoria's Auditor-General found there had been an almost 40 per cent increase in gifts and hospitality to the water businesses in one year and recommended water corporations "conduct training, on a regular basis, for employees to ensure they are well aware of, and understand, the policies and procedures relating to gifts, benefits and hospitality".

Water companies refused to release their gift registers at the time of the Auditor-General's report and the details of the gifts have only emerged following a freedom of information request.

After the report, Victoria's Water Minister, Lisa Neville, ordered auditors RSM Bird Cameron to investigate why there had been such a big increase in gifts.

The RSM Bird Cameron report has noted some employees at South East Water were given gift cards and these were considered "as money or pecuniary equivalents".

"There is a risk that South East Water employees may be perceived as accepting gifts that are intended to influence the performance of their roles," the RSM Bird Cameron report said.

South East Water has now changed its rules around gifts.

As of May, South East Water's policy is for all staff to decline all gifts – this does not include "events and dinners".

Rupert Posner, corporate affairs manager with South East Water said a handful of gift cards valued at $100 had been recorded over a five-year period, "we recognised the need to strengthen reporting and as such the policy and its protocols were enhanced to reinforce our commitment to transparency and accountability. As such, no gift cards have been accepted in the last 12 months," he said.

Much of the recent increase in gifts and hospitality occurred at Melbourne Water –  where they were up from 75 in 2012/13 to 193 in 2013/14.

Melbourne Water updated its gifts and hospitality policy in December 2014 – before then, there was no formal approval required for the acceptance of gifts, benefits and hospitality, the RSM Bird Cameron report noted.

Melbourne Water chief financial officer, Anthony O'Shannessy, said: "Melbourne Water adheres to a strict gifts, benefits and hospitality policy and reviews our policy every year."

A spokeswoman for Yarra Valley Water said it had tightened its gifts policy since the Auditor-General's report in February.

"Our staff attend corporate functions hosted by key suppliers and partners. We have comprehensive internal policies and guidelines for the acceptance or offer of gifts, benefits and hospitality that all employees are required to comply with," she said.

City West Water managing director Anne Barker said it had comprehensive internal policies and procedures for receiving gifts and the majority of gifts and entertainment are declined when offered.

She said two employees travelled overseas last year to attend a conference hosted by a key supplier. The supplier paid the $3700 for the conference tickets and City West Water paid travel and accommodation costs.

Many of the gifts to metropolitan water corporations came from contractors or businesses with financial links to the corporations.

RSM Bird Cameron found  "no correlation between the number of gifts, benefits and hospitality offered and tendering activities".

Ms Neville said she would write to all 19 water corporations asking them to review and update their gifts and hospitality policies.

"I will also be advising them that they will be required to implement minimum standards for disclosing and accepting gifts and hospitality across all water corporations, which the department is currently developing," she said.

She said any gift or hospitality worth $100 or more "definitely needs to be declared, disclosed and approval sought before acceptance".

"It may be a lower threshold from people or organisations about whom they are likely to make decisions involving procurement," Ms Neville said.

She said introducing a new culture around gifts and hospitality would be the first task of the new boards at all water Corporations in from October.

The gifts

 

Gift: $5542 for conference in Florida for South East Water senior systems analysts from OpenText.

OpenText IT contracts with South East Water are valued at $230,000 over two years.

Gift: $3700 for conference tickets to Oracle Open World event in San Francisco plus local baseball match both paid for by Oracle. Travel and accommodation paid for by City West Water.

Oracle provides software support to City West Water. Contract from June 1, 2015 to May 31, 2017 valued at $1.4 million.

Gift: Melbourne Spring Fashion Week tickets.
Maddocks provided ticket to Melbourne Water team leader Maddocks on legal panel of Melbourne Water. Estimated business worth $20,000 in 2013.

Gift: $500 in shopping vouchers and gift cards (including Bunnings) provided to staff at South East Water.

Accountants RSM Bird Cameron said the "gifts are considered as money or pecuniary equivalents. It said the acceptance of these gifts represents non-compliance with the water corporation's policy. There is a risk that SEW employees may be perceived as accepting gifts that are intended to influence the performance of their roles".

Gift: $578 on Australian Open Tennis ticket from Jonoco P/L to mechanical and electrical asset management co-ordinator at South East Water for "ongoing business relations".

Jonoco provides electrical, civil and mechanical services to South East Water. Contract 2013-2018 valued at more than $6 million.

Gift: 2 x tickets to Bruce Springsteen Concert at AAMI stadium from Programmed Facilities Management to Yarra Valley Water CFO and corporate secretary .

Contract with Yarra Valley Water around $400,000 a year. Contract 2006-2015.

Gift: Ticket to 2014 AFL grand final, breakfast and river-boat ride on Yarra River from Finsbury Green to brand and sponsorship manager at Yarra Valley Water as "token of appreciation and renewed partnership with YVW marketing department".

Finsbury Green is preferred supplier on print panel. Average annual spend on marketing printing is about $75,000.