Mr Demeo is also alleged to have improperly split orders of capital works, so to avoid issuing tenders for projects. He is also accused of misuse of a council credit card.

Here, The Courier looks more closely at what is alleged by the 'Investigation of alleged improper conduct by Executive Officers at Ballarat City Council' report.

READ MORE

'Devastated': Councillors react to scathing report about executives

Jobs for mates allegations: CEO and senior executive under fire, council in turmoil

THE City of Ballarat's environment and infrastructure director Terry Demeo has been accused of improperly recruiting friends and former colleagues from the City of Greater Geelong to senior positions at Ballarat Council.

In her report tabled on Thursday, Ombudsman Deborah Glass also accused Mr Demeo of being involved in splitting purchase orders to avoid a tender process for council construction projects including works on City Oval, claims Mr Demeo has denied in the report.

The report also found council had failed to tender the Creswick Road car park whose value went from an anticipated $200,00 to an actual $714,000.

The recruitment allegations against Mr Demeo relates to the roles of three officers. While The Courier is aware of the three people, it has chosen not to name them. In relation to Officer A, Ms Glass alleges Mr Demeo had a conflict of interest from his previous dealings with the officer.

"This conflict arose from Mr Demeo's personal friendship with Officer A, which extended beyond simply having worked together at Geelong Council," she said.

"The evidence shows Mr Demeo invited Officer A to work for the council, agreed to pay Officer A's company a higher rate than Officer A was paid for similar work at Geelong Council, did not take steps to identify competitive rates for the work (and) chaired a tender evaluation panel that subsequently selected Officer A's company as a preferred supplier to council" (without declaring his previous relationship).

In relation to Officer B, Ms Glass said evidence shows Mr Demeo invited Officer B to apply for the 'Site Supervisor' position, chaired a selection panel comprised of two people and obtained an agreement to extend Officer B's contract.

She said Mr Demeo conceded the projects allocated to Officer B could have been completed by more junior council officers. Ms Glass said Mr Demeo also had a conflict of interest regarding Officer C arising from their personal association.

"Mr Demeo was not involved in Officer C's initial recruitment to Ballarat Council, but was involved in promoting Officer C to positions in his team," she said.

"Mr Demeo's actions tainted the recruitment processes involving Officer C, regardless of the merits of her candidature."

In response, Mr Demeo denied any improper involvement in the trio's recruitment, but accepted there was a "potential perception of conflict" and he should have completed a formal statement or declaration.

In separate findings, the ombudsman alleged there was a splitting in purchase orders to repairs at City Oval to avoid a public tender process.

"Mr Demeo also asserted there was no breach of tender requirements," Ms Glass said. "He submitted that a tender was not required for repairs costing $300,000, on the basis that the repairs consisted of multiple and distinct works individually valued at less than $125,000.

According to the report, the evidence compiled in the investigation "suggests that fragmenting the cost of works is an accepted practice for time-sensitive matters, at least for some Council officers" but Mr Demeo denied council used this approach to avoid tenders.

The final allegation about Mr Demeo was that he misused council's purchasing card.

Investigators obtained records of Mr Demeo's card from 2016 to 2018, showing he had spent "approximately $7000 on coffees, meals and beverages for various stakeholders, including councillors".

It noted "the purchases appear to be inappropriate and not in accordance with Council's Corporate Purchasing Card Policy.

However, while the purchases may evidence poor judgement on Mr Demeo's part, they do not appear to constitute 'improper conduct' for the purposes of the Protected Disclosure Act."

A major investigation into the conduct of the executive management of the City of Ballarat is highly critical of the actions of chief executive officer Justine Linley, saying her actions in employing two staff members with whom she was previously acquainted were "unwise at best, and may have been improper."

The report Investigation of alleged improper conduct by Executive Officers at Ballarat City Council tabled yesterday by the Victorian Ombudsman found two senior council officers appointed by Ms Linley 'do not appear to have had the necessary skills or experience to satisfy the selection criteria.'

One officer appointed by Ms Linley had a pay increase from $114,000 to $230,000 in less than 12 months, while the other received a $55,000 pay increase (to $230,000) less than five months into his new HR job.

The ombudsman's report, which took two years to compile, pulls no punches in its critique of the actions of Ms Linley as CEO and her director of infrastructure Terry Demeo, regarding senior appointments and the conduct of council business in managing conflicts of interest.

"I am not tabling this report because of the scale or severity of the conduct: the findings about the chief executive are at the lower end of the spectrum of bad behaviour," Ms Glass asserts in the introduction to the report.

The allegations against Ms Linley are she 'was improperly involved in recruiting or promoting six friends and/or former colleagues to senior positions at Council.'

The six people are referred to in the report as officers D, E, F, G, H, and I. The Courier is aware of the identities of the officers but will observe the protocols of procedural fairness laid out by the Ombudsman, in that those persons 'are not the subject of any adverse comment or opinion.'

The report dismisses the allegations regarding Ms Linley and four of the officers, noting 'The available evidence does not support a conclusion that Ms Linley was improperly involved in, or improperly influenced, the recruitment of Officer F, Officer G, Officer H or Officer I to Ballarat Council.'

However in regards to her appointment of and dealings with Officer D and E, the ombudsman's report found, 'Ms Linley had a conflict of interest regarding employment decisions concerning Officer D which she didn't declare or manage appropriately in a timely way,' and, 'Ms Linley appears to have given preferential treatment to Officer E in respect of his recruitment to Ballarat Council as a Deputy Director; and it would have been prudent for her to declare a conflict of interest.'

The report alleges Officer D and Ms Linley had maintained a working and mentoring relationship from her time at Northern Grampians Council, that Officer D was advanced despite lacking the qualifications of other candidates, and that Ms Linley did not declare a conflict of interest in D's appointment when she should have.

With regard to Officer E, the ombudsman found he received preferential treatment in the selection process, despite arguing his suitability because of his 'leadership style, past experience, qualities and cultural fit.'

'It is difficult to accept this submission given the two other shortlisted candidates had superior qualifications and significantly greater experience at the relevant level,' the report found.

In her response to the report, Ms Linley stated her 'disappointments in the investigation and the findings made'. Her response expressed 'considerable concerns about the basis of those findings and the commentary of the investigator'.

If you are seeing this message you are a loyal digital subscriber to The Courier, as we made this story available only to subscribers. Thankyou very much for your support and allowing us to continue telling Ballarat's story. We appreciate your support of journalism in our great city.