An independent auditor's report was submitted to council officers in September, and has remained secret until this week. It is now available in full in the agenda to the council meeting on Wednesday January 27. Here we summarise the background to the report, which was referred to the Local Government Inspectorate last year, the circumstances leading up to its publication and the newly public findings within it.
Note: this report is not to be confused with a separate one conducted by external consultant Susan Halliday into the City of Ballarat's workplace culture. That has not yet been made public, although it is due to be released on Friday January 29.
PITCHER PARTNERS REPORT IN BRIEF:
- The report was completed in September last year, but not released due to concerns it could be used to influence councillor elections
- $17,000 of procurement went to one local florist, reportedly known to the former mayor Samantha McIntosh, over two years.
- There was no finalised project scope located for the fernery.
- Unclear if cost variations were able to be signed off by the Contracts Approval Special Committee.
- Record keeping was lacking for the acquisition of the Gatekeepers Cottage.
- There was no business case for the Gatekeepers Cottage project.
- Interim CEO Janet Dore has said the council's policies were loose and that action has been taken to tighten up on procedures. She has pointed to poor administration, and stressed she does not want to apportion blame, just improve procedures
An auditor's report was requested by the interim CEO Janet Dore in August, after The Courier reported significant overspending and procedural queries concerning two City of Ballarat projects: The Gatekeeper's Cottage and the fernery. Both of those projects are in the Ballarat Botanical Gardens, and both were championed and pushed by Cr Samantha McIntosh during her three years as mayor.
One article summarised figures released by the City of Ballarat in July. It showed spending on the Gatekeepers Cottage report was five times the amount estimated to councillors in early 2017 when they agreed to relocate the structure from its Gregory Street address to the parks precinct where it originated in the 19th century.
A further report on the fernery suggested that project had also gone significantly over budget - by more than $250,000 - without any clear scope of where ferns would eventually be displayed.
At a subsequent August council meeting several councillors requested an investigation into the project. Ms Dore said she had already put a request for an independent report in motion, to be carried out by auditing firm Pitchers Partners.
Cr Mark Harris, one of the most vocal councillors in calling for a public report, also requested for more detail into the purchase of a light fitting - referred to as a "chandelier" (a description disputed by Cr McIntosh) - included an Ombudsman's investigation published last May.
We can see now that the report was submitted to the council's director of corporate services Sean Portelli on September 2, 2020, drily entitled: "Process, Management and Authorisations Assessment".
Ms Dore came under considerable pressure from several councillors to release the report publicly at the time.
She demurred, saying the report could be adversely used in the council election campaign, which by then had begun in earnest. She committed to release the report in full after a new council was elected, and instead published a broad summary of its contents in the agenda for the final meeting of the previous council last September.
This outlined criticisms of the scoping and management of both the fernery and Gatekeepers Cottage project. The purchase of the 'chandelier' light fitting, in the meantime, was deemed to have "met policy and procedural requirements" - although auditors noted the absence of any detailed town hall refurbishment plans, and there being "no documented support" for this type of acquisition.
WHAT IS NEW IN THE FULL REPORT?
The report is now included in full under the CEO report for the first full council meeting of 2021.
The conclusions and recommendations of the Gatekeepers Cottage report and the Fernery and chandelier purchase were largely covered in that initial summary. The most striking details of the full report does not concern the Gatekeepers Cottage at all, but rather "Additional transactional assessments" [see below for full details].
The Pitcher Partners report reads: "Following on from our in-depth assessment undertaken of the three items above, management requested us to undertake further investigations. The following transactions were identified by management in response to a council resolution in relation to Town Hall expenditure "outside normal maintenance or 'Council approved changes'."
You can read the full list of council expenditure below. There are several "mayoral requests" for flowers and plants for the town hall during Cr McIntosh's time in the role. According to the report, the council's finance department said procurement worth approximately $17,000 was given to the florist - who is named in documents - over the two years from February 2017 to February 2019.
Extracted from the Pitcher Partners report:
Here is an extended extract from the report about those transactions:
"We were advised during interviews with Council officers that the florist may have been known to the mayor.
"Further email correspondence between Council officers indicated that the florist may have been known to the mayor. We were further advised that whilst the purchase of flowers seemed to occur on a regular basis (new flowers delivery weekly) the invoices received from the florist occurred irregularly.
Documentation received indicates that the florist undertook additional work for the council such as moving furniture and attending site visits at the Town Hall. It appears that these activities were invoiced to the Council without any documented requests or pre-approval for these services. These invoices were addressed directly to the Mayor [indicating] that these items were ordered by the Mayor rather than going through the normal procurement processes when ordering a good or service.Pitcher Partners audit report
"Specifically, invoices were not initially provided for the flowers and then when they were provided the florist often dropped a number of invoices off at the town hall for payment.
"Additionally, through staff interviews and subsequent emails, it was stated that payment of these invoices was often followed up by the mayor to ensure payment had been processed.
"Documentation received indicates that the florist undertook additional work for the council such as moving furniture and attending site visits at the Town Hall. It appears that these activities were invoiced to the Council without any documented requests or pre-approval for these services.
"These invoices were addressed directly to the Mayor [indicating] that these items were ordered by the Mayor rather than going through the normal procurement processes when ordering a good or service."
A later snippet reads: "We were advised that plants had been purchased for the town hall offices at the request of the Mayor, subsequently it was decided by the Director Innovation and Organisational Change that artificial plants would be more cost effective."
There are other items listed in the audit that are likely to catch the attention of ratepayers:
- A $180 mayoral photographic portrait requested by the then mayor and CEO, as well as $1,145 spent on photos for frames.
- A $20 weekly fruit bowl top-up for town hall, which auditors conclude was ongoing at time of writing (September 2020).
There is also some evidence of internal tensions about the purchases. "We were advised that staff were sometimes unsure certain councillor reimbursements (eg flowers and plants) were in alignment with Councillors Expenses Entitlement Policy," it reads.
The auditor assessment also details the reported rejection of a mayoral request for a $5,000 piano by a then director at the council. The Courier understands a piano is now in place at town hall, which was gifted rather than purchased.
WHAT IS NEXT?
The report will be discussed in an open council meeting on Wednesday.
The local government inspectorate has responded to the auditors, saying that it endorsed the report. In correspondence dated last December, the acting chief municipal inspector John Lynch said: "At this stage I consider that there is no further action required on the part of the Inspectorate."
It is unclear what, if anything, will change as a result of the report's publication. Councillors will need to acknowledge its findings, but may not push for any further action. A number of procedural changes have already been put in place in recent months, and there has been a complete change in the executive team since the spending highlighted by the report.
In the relatively early days of a new council, it is perhaps more likely they will accept its findings and hope they can move on with the formulating a new council plan designed to help kickstart the city's economy.
Ms Dore has also stressed the focus is on improving and clarifying procedures, rather than blaming individuals, to ensure it does not happen again.
"There are good processes being put in place that will help guide people towards the right way of doing things," she told The Courier on Monday.
"I'm not interested in blame. I am interested in learning. We are in an era of public accountability and transparency, and that's what this is about."
"My focus is for the future and to give [incoming CEO] Evan King a clear runway."
A number of changes since the damaging Ombudsman report was released last May are also highlighted in her report for Wednesday's agenda, including changes to the executive team, and new policies for procurement, hospitality and recruitment.
Read the report in full below (from page 14):
OMBUDSMAN COVERAGE: TIMELINE
May 14: The report is tabled
- City of Ballarat ombudsman report: 'jobs for mates' allegations regarding Ballarat Council executives
- Ombudsman report into Ballarat council: councillors express disappointment
- Ombudsman report into City of Ballarat: Councillors told to scrutinise CEO behaviour
- City of Ballarat ombudsman report: The intriguing finer details
- Ombudsman's report into Ballarat Council: What next for council officers?
May 16, 2020
- ANALYSIS: Troubled waters at town hall
May 18, 2020: Resignation and sacking
May 19: Mayor Ben Taylor talks about Justine Linley's sacking
May 21: Price fixing links of acting CEO confirmed
May 24: Fresh doubts published over recruitment processes/ Fall out continues over decision to terminate Justine Linley's CEO contract
May 28: Push for new interim CEO
June 10: New CEO announced
June 12: First day of new interim CEO, Janet Dore
June 18: Directors jobs to be re-advertised
June 29: Director of business services resigns
July 7: Director Cameron Cahill resigns
July 23: Changes to procurement
July 28: Another director goes
August 2: 'More than half way there'
August 11: Last director resigns
August 27: CEO recruitment begins
September 2: New appointments
September 10: New director of infrastructure and environment
September 11: Final director roles filled
September 17: Cultural review
January 6, 2021: Analysis and CEO appointment
January 26, 2021
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