Carol Altmann – The Terrier

More on the Ombudsman’s incredible report:

If ever there was an example of how loose the goose was running down at 25 Liebig St, it is this one – the “spend local” idea during the Liebig St upgrade.

A large swathe of the spending on credit cards held by managers other than David McMahon – including City Growth Manager Andrew Paton and former Economic Growth Manager Shaun Miller – is explained away by the council through its “spend local” idea.

According to the Ombudsman’s report, the council had set aside a budget of $170,000 a year for “support local” activities during the Liebig St upgrade.

Under this, “council officers were encouraged to hold work-related meetings at local cafés and restaurants, and to use their Council credit cards to pay for food and coffees”.

A noble cause, perhaps, but this is a remarkably generous eat-and-drink plan that I don’t recall ratepayers ever being told about.

More importantly, as the Ombudsman points out: “No guidance was issued by Council to assist Council officers decide what was an acceptable purchase using Council funds and what was not, other than the directives in the Procurement Policy and the Credit Card Policy.”

No guidance and a $170,000 a year budget: that’s a winning formula.

Mr Paton told the Ombudsman he was mindful of community perceptions and told his team that the “rules” were the meeting had to be business related, and involve another council officer or stakeholder.

(Call me naive, but that sounds like a recipe for pretty much anything goes.)

Here is Mr Paton’s response to the Ombudsman: “… it’s easy to look at a spreadsheet and say, ‘You spent $600 on coffees. How do you justify that?’ with no context of why that meeting occurred and why that expenditure occurred. And that’s a hard one to explain sometimes even to the people who are involved in it …

“I can see how that would look. But in terms of the context of the space we were in and the battle we were in, I’ll use that language … it was a bit of a battle to try and keep the wheels spinning because it was a day-today thing.”

I am not sure how this accounts for the after-hours work drinks on a Friday night at places like the Hairy Goat or the Warrnambool Hotel.

I am also curious as to why the “spend local” was confined to pretty much the same places: Fishtales, The Hairy Goat, Seanchai, Whaler’s, Warrnambool Hotel….

Nobody ever opted for Mack’s Snacks.

As the Ombudsman says, while this “shop local” idea may have been well-intentioned, the approach was “fundamentally unwise” and the public perception could rightly be council staff eating and drinking on the public purse, as opposed to doing “business”.

Again, this report not only reveals what was clearly misuse of a credit card by one person, but what was permissible use of a credit card by others who were simply following the “rules”.

Thankfully those rules have now changed.

Carol Altmann – The Terrier

More on the Ombudsman’s report: The Myrtle Bar & Kitchen.

Readers will recall the story on The Terrier about the almost $700 dinner held at the Myrtle Bar & Kitchen and attended by City Growth Manager Andrew Paton, David McMahon, Cr Sue Cassidy and the head of the Great Ocean Road Regional Tourism authority.

This dinner was paid for on Mr Paton’s credit card and included five bottles of shiraz.

Here is what Mr Paton has told the Ombudsman by way of explanation:

“When the evening finished and we settled the bill, I looked at the bill and I was shocked by it. My initial thought was to query it, and then split the bill; and I didn’t do that, and, and I regret it.

“So I can see what that looks like, it’s about, oh we’re building a relationship with GORRT (Great Ocean Road Regional Tourism) by wining and dining them, and I get that, totally get that perception.

“But the picture for me and how I rationalised it, was the outcomes that I got from that discussion, that on balance I had good outcomes, but it didn’t meet my personal standards.

“That dinner with Great Ocean Road Regional Tourism delivered some good things, but there are some things that could have been done better that I regret.”

—-

I wonder what the “outcomes” and “good things” from this dinner were – wouldn’t it be great to see a public report!

The Ombudsman records that Cr Sue Cassidy last October voluntarily repaid $200 toward this bill after she regarded it as “excessive”. I guess that’s something.

On a similar note, the $1476 dinner held at Pippies By the Bay Restaurant in May 2018 – reported as part of this same story – has led to greater restraint on Sister City functions.

In 2018, it was “free reign in ordering”, so of course everyone went for the lobster and abalone.

As the Ombudsman reports: “(this) did not meet community expectations and it (the council) has taken steps to allocate a moderate per head allowance to these meals”.

All of which reminds me of the line I wrote in that original story:

“…this is not about catching people breaking the law…but exposing the steaming pile of inappropriate and unjustifiable spending that gives so little return to the ratepayer.

It’s this unjustifiable spending – via poor governance – that people want independently audited, cleaned up and cleaned out.”

I have to say I am feeling a little emotional as I write all this, knowing that this has now all been exposed after a true team effort, and change has come as a result.

It has been a long road.

More soon.

Carol Altmann – The Terrier

Here is a story of two lavish Warrnambool dinners, held two months apart, costing more than $2000 and paid for via another Warrnambool City Council corporate credit card.

“It’s just one credit card,” Mayor Tony Herbert keeps repeating, “just one”.

No, not one. Not two. Now three, and it’s not over yet.

I have to keep rolling these out, because two months’ after the first bombshell hit, the WCC still refuses to accept it has a deep-seated culture of entitlement and secrecy that has seen questionable spending of public money for years (#notallstaff).

This time it’s a dinner at the Myrtle Bar and Kitchen last July for perhaps three or four people, including a current councillor, who between them spent almost $700 on servings of eye fillet, five bottles of shiraz (@$79 each) and more wine by the glass before things wrapped up a few minutes before midnight.

The guests, I am guessing, must have had a decent old hangover the next day.

But wait, there’s more. There always is.

Another dinner, costing an eye-watering $1476, but for more people – maybe 10 – was held at Pippies By the Bay restaurant in late May last year and included dishes of eye fillet with crayfish tail, abalone entrees, yellowtail kingfish, duck breast, fresh oysters and desserts.

The food was washed down with five bottles of wine and six glasses of champagne, with several more wines bought by the glass before everyone piled out the door and into the night.

Both of these dinners were paid for by a senior council manager using a WCC credit card and were held less than two months apart.

I don’t know what these dinners were for and perhaps they were of enormous benefit to Warrnambool, so on Monday I asked the senior manager and the councillor three simple questions:

i) the purpose of each dinner?

ii) the demonstrable outcome for Warrnambool as a result of each dinner?

iii) who signed off on the cost of each dinner?

I still don’t know the answers to those questions, but you can read the response today from the WCC media adviser in full here.

I don’t want to incite a riot and this is a truth I hoped I wouldn’t have to expose, because I trusted the council would be in full blown action mode by now, but it just doesn’t get it.

All the council hopes to do is tweak a few internal policies and pray the whole thing goes away: it won’t.

Because this is not about catching people breaking the law – which is what Cr Herbert fails to grasp – but exposing the steaming pile of inappropriate and unjustifiable spending that gives so little return to the ratepayer.

It’s this unjustifiable spending – via poor governance – that people want independently audited, cleaned up and cleaned out.

There was the perfect chance for the Mayor, CEO Peter Schneider and the councillors to stand before the public at at last Thursday’s emergency meeting and say we are so sorry for allowing your money to be wasted. We are on to it. We are taking it very seriously and we are doing all we can to flush it right out.

Instead, they all – bar one in Cr Hulin – behaved like kids dragged before the headmaster, twitchy and testy, as if they didn’t want to be there, because they didn’t.

Local MP Roma Britnell recently confirmed to a resident that both she and the Local Government Minister were poised to intervene: “The opportunity was provided to the city council, by both myself and the Minister, to conduct an independent review, they have chosen a certain way to proceed,” she wrote.

So the council was dragged kicking and screaming to the table and it showed.

Cr Herbert stuck to his mantra. Cr Anderson sat there and said nothing. Cr Neoh – briefly – lost his temper, while Cr Gaston stood up and announced she was “very confident” all was well.

No, Cr Gaston, all is not well.

Let’s not forget that this council first talked about breaking the rate cap in 2017, yet throughout 2018, the unbridled spending on food, drinks and alcohol rolled on.

Nothing changed.

And because nothing changed, we are now picking up the bill through higher rates.

It is outrageous and yet we know it is just one part of a much bigger picture where so much waste was and is allowed to happen.

There was nothing illegal about a senior manager buying a shed for $100,000 and the council selling it for $2000. There was nothing illegal about throwing $3 million of taxpayers’ money into Flagstaff Hill and it now costing ratepayers $750,000 a year to prop up. There is nothing illegal about building an unnecessary roundabout outside the Warrnambool Bowls’ Club where Cr Anderson is a member.

And there was nothing illegal about council staff spending hundreds of dollars on food and wine, because it was happening in plain sight and approved by those in charge.

I have now reported on three council credit card holders who have indulged in questionable spending, and there are more (#notallstaff).

If our councillors don’t know about all of this by now, then our CEO is not doing his job for his $320,000-a-year package.

I know Mr Schneider is a busy man, but he did find time to email me last week, not with any answers or insights, but asking me to refrain from naming council staff.

As a journalist, I never publish a name without it being relevant, but I will wait and see – in this case – if the senior manager and councillor involved will step out and name themselves.

In the meantime, those of us outside the tent will continue to dive deep, down to the very bottom of this culture of entitlement and waste, and use every muscle we can to turn it around.

We still have some way to go.

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Carol Altmann – The Terrier

These were my questions about the two dinners:

i) the purpose of each dinner?

ii) the demonstrable outcome for Warrnambool as a result of each dinner?

iii) who signed off on the cost of each dinner?]

I will let the Warrnambool City Council response speak for itself. Here is it in full:

“We are aware you recently emailed questions relating to credit card expenditure to a councillor and Council officer.

This is Council’s response to those inquiries.

As we have previously advised, Council is fully aware of its reporting obligations to referral authorities and any actions that are required.  Those obligations are taken very seriously. The regulations around reporting responsibilities mean that Council cannot confirm whether a referral has been made and nor can Council provide publicity or commentary on the process.

The constraints on Council around the referral process have been made known to the media on several occasions in recent weeks.

The questions you have asked are also part of a current FOI inquiry initiated by you. Given these matters are yet to be finalised, it would be inappropriate to provide further detail at this time.

In addition to the above, at the recent Special Council meeting the following resolution was passed:

1a)       That Council, via the Audit & Risk Committee, immediately (Audit & Risk Committee Meeting of the 27 August 2019) engage an External Auditor to undertake an audit to review and assess the adequacy of:-

• Existing policies, governance, reporting and investigation processes/procedures in the handling of the current credit card misuse issue that was identified in September 2018.

1b)       The scope of the audit to include:-

            SCOPE

Review the adequacy of Council policies, procedures and processes in relation to:-

• Dealing with expenditure authorisation and delegation;
• Trigger points for reporting (unusual transactions and/or misuse and/or fraud) to the Audit & Risk Committee (via confidentiality reports or meetings);
• Trigger points when an auditor should be brought in (i.e. the period after unusual/misuse has been identified to when possible fraud is suspected);
• Guidelines on “taking face value explanations” vs “appropriate inquiry”;
• Guidelines to ensure there are procedures to mitigate and prevent the acceptance of face value assumptions;
• Adding another layer of probity and transparency by providing trigger points for the use of an auditor.

1c)       Should the External Auditor require clarification of the scope of the audit, as outlined in 1b) then the Auditor shall communicate directly with Cr Neoh and Cr Cassidy and the Chair of the Audit & Risk Committee.

1d)       Once appointed, the External Auditor to meet, in camera with Cr Neoh, Cr Cassidy and the Chair of the Audit & Risk Committee, to outline the scope (in accordance with 1b).

1e)       That the External Auditor report directly to the subsequent (post 27 August 2019) Audit & Risk Committee Meeting or early if called by the Audit & Risk Committee Chairman.