In what one councillor described as a " pretty sombre" final meeting of this council term, the interim CEO Janet Dore said themes from the cultural review of some sections of the organisation were "very worrying".

She told them that one suspected improper procurement had been referred to the Independent Broad-based Anti-corruption Commission [IBAC].

The revelations were made during a highly charged discussion about a recent internal auditor's report, which was commissioned by Ms Dore in response to revelations about the costs of two City of Ballarat projects: the Gatekeeper's Cottage and the Fernery.

A summary - but not the full report, which was an issue for several councillors - was included in the CEO report. Ms Dore also confirmed that the report had been referred to the Local Government Inspectorate. She said the inspectorate was "probably the best authority to assess the report.

"If they deem it serious enough, they will have a duty to refer to either IBAC or the Ombudsman," she said.

The Courier first reported on the unexpectedly high costs for the Gatekeeper Cottage and fernery in early August, and an internal audit was subsequently ordered.

It was, however, separate revelations from the workplace review that proved the biggest news of the evening.

Responding to a question about the review from the deputy mayor Cr Belinda Coates, Ms Dore outlined some of its early findings.

"It continues to uncover an array of improper and appalling behaviour in some areas, I should say," Ms Dore said, adding that more than 70 interviews had so far been conducted by Susan Halliday, an external consultant.

"They are staffing matters. They vary from bullying, assault, sexual harassment, improper procurement - and that one will go to IBAC."

"There have been two investigations as a result of what Ms Halliday has found and I've appropriately dealt with them."

Ms Dore said a progress report on the review would be presented to council before it went into its caretaker period ahead of next month's elections.

Cr Grant Tillett asked for clarification about the issues uncovered by Ms Halliday, saying he was concerned the public would conflate the staffing concerns with the councillor group.

Ms Dore responded: "This is not anything the councillors and the council could have done anything about.

"The council [ie the nine elected representatives] itself could not have known about any of these staffing issues."

While she said a full version of the workplace cultural review would not be made available publicly as it related to staffing matters, Ms Dore said that recommendations should be published in full.

"Susan Halliday will draw her conclusions," she said. "There are clear themes emerging. The final report, which will be able to be released, would focus on those themes and areas and will form the basis for an action plan the CEO will be held accountable for."

Ms Dore said the issues were "not irretrievable".

"I wouldn't say it was rife at all," she said. "I think we're already starting to see some real improvements. We are dealing with matters that perhaps have festered for years and are now being cleaned up."

Ms Halliday conducted a similar process at the City of Greater Geelong in 2015/16.

On the issue of the auditor's report, which was carried out by Pitcher Partners, Ms Dore said the summarised version was included in her agenda report for the sake of transparency.

It made sharp criticisms of the budget planning for the Gatekeepers Cottage project and the new fernery. It also queried purchasing procedures under the former mayor Cr Samantha McIntosh.

Ms Dore said the full version "could be used in quite a damaging way" in the run-up to an election period.

"There is potential for misuse. This is exactly why I am referring it to the inspectorate".

Cr Mark Harris, who had requested a full report on the spending for both the Gatekeepers Cottage and the fernery, as well as the background to the purchase of a chandelier for the town hall, made clear his disappointment that more details had not been published.

Crs Des Hudson and Amy Johnson also pushed for more information, with Cr Hudson arguing that not publishing them could implicate the whole councillor group. Ms Dore said she understood his concerns but said the report requested by Cr Harris could go before the next councillor group.

Cr Daniel Moloney meanwhile expressed his shock at the workplace review findings.

"No-one deserves to turn up to work and be bullied and harassed," he said, before thanking Ms Dore for prompting the cultural review.

"Some good will come of this in the end."

Independent report criticises Gatekeepers Cottage, fernery and spending procedures

Read The Courier's original report on the Gatekeepers Cottage here.

There are several pointers to improvement from the independent review undertaken by Pitcher Partners:

1. Proper project management discipline is needed which requires a business case including whole of life costing, staged approval processes and verification for all projects over an identified value.

2. Expenses for Mayoral duties need clarification within the Councillor expenses policy.

3. Purchasing of all goods, services and materials must follow the appropriate procurement processes through an authorised officer.

4. A policy for acquisition of gifts and special assets should be developed.

5. Training for staff in record keeping requirements should be implemented. Ordinary Council Meeting Agenda 16 September 2020 8

Gatekeepers Cottage Conclusions

Record keeping regarding this special acquisition is lacking and therefore cannot support the application of an appropriate acquisition process, particularly given the unique nature of this asset.

A full business case, commensurate with the nature and risk associated with the asset was not produced.

The asset acceptance appears to have been agreed based on a cost analysis that did not adequately contemplate the full extent of costs. There are no approved variations to the planned $300k.

The acceptance of the asset does not seem to have received explicit council approval. There was no policy or procedure in place, to specifically address this type of asset, which possibly should have required additional steps to be undertaken, such as the involvement of restoration specialists to provide their process and costs estimates etc.

While there is no specific supporting information, it appears that this asset was incorporated into the normal capital development process associated with the fernery re-development. In the absence of any policy guidance with regards to gifted and special assets this may be considered, without the benefit of hindsight, to have been an appropriate approach at the time.

Fernery Conclusions

Council had clear line of site of this project and the general reasoning for it being undertaken. The process was conducted over several years with various assessment steps being undertaken. There was no relevant business case and reasoning, final scope or budget provided to support the approval.

The old Batten Fernery on which the new project is based

Costs have exceeded the approved budget and subsequent variations were approved by the Contracts Approval Special Committee. It is unclear from the way in which the delegations are phrased if the Contracts Approval Special Committee had the ability to approve the larger variations.

In the absence of a project scope, it is unclear what would constitute full completion.

Chandelier Conclusions

The acquisition met the relevant policy and procedural requirements. It is unusual for capital acquisitions to be paid for by credit card, but understandable given the circumstance. It is unclear why staff coded the cost of the item to the Councillor expense code.

The lack of the broader town hall refurbishment project scope and budget, results in there being no documented support for this specific acquisition. The absence of a gifted assets and special acquisitions policy makes it difficult to determine if the acquisition would be considered unnecessary or have required a special procedure of approval or acquisition.

It would be expected that all intended purchases and commitments made by Councillors on behalf of Council would be requested through, approved by and procured by council officers

Auditor's report

The expenditure was incurred for Council purpose and the item is on display in the town hall. Recommendations Resulting from this work we offer the following recommendations for management to consider: Development of full scope, business case and budget before approval of acquisition.

Recording and retention of relevant approvals and considerations.

Appropriate gatekeeper steps through larger projects and acquisitions, to ensure appropriate approvals and consideration of changes and next steps.

Development of a policy and procedure with regards to gifted and special assets.

Clarifying the delegations with respect to the financial value of variations that can be approved by delegated positions. Other transactions Conclusions In relation to the additional transactions, based on discussions with staff and documentation received, it appears that there was involvement from the Mayor in relation to a number of these purchases and activities some of which appear to have been made without pre-approval or involvement of Council officers.

Within the purchasing policy and procedures, it would be expected that all intended purchases and commitments made by Councillors on behalf of Council would be requested through, approved by and procured by council officers.

In addition, greater guidance with regards to the extent of involvement by Councillors in directing Council officers to procure items and services of behalf of City of Ballarat would be helpful.

Recommendations

Assess and where possible strengthen various policies that relate to Councillor activities and expenditures as well as addressing the procurement policy and procedure followed by management when dealing with Councillor requests and expenditures.

You can read the council agenda here

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