The Local Government Investigations and Compliance Inspectorate has released a scathing report following its investigation into the Central Goldfields Shire, claiming there has been “many areas where council has failed the community”.
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The investigation uncovered numerous instances of malpractice in asset mismanagement, financial mismanagement, human resources mismanagement and governance failures.
The inspectorate examined more than 700 documents in formulating the 25-page report.
The report revealed in August 2012 council paid almost $70,000 in private legal fees for a former councillor who had been found guilty of two conflicts of interest and was ordered to pay $24,000 in fines.
The investigation also revealed malpractice in the sale of several council assets, including the sale of the former Maryborough Primary School site on Inkerman Street.
In 2008 the council purchased the site 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.
In a statement, Chief Municipal Inspector David Wolf 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.”
The report comes after chief executive Mark Johnston was stood down from the role following separate charges.
In the report, Mr Wolf said “in accordance with the judicial process, (the) report does not reference those specific allegations or circumstances”.
Mr Johnston has previously stated his innocence and said he would fight the charges.
Council and the interim chief executive have since replied to the report, stating “while there were some explanations of why certain matters had occurred the facts of the report are not disputed”.
Local Government Minister Natalie Hutchins will demand a formal response from the council within 28 days.