Credit cards: Roma Britnell pushes for independent inquiry
Carol Altmann – The Terrier
South-West Coast MP Roma Britnell has weighed into the credit card scandal at WCC, pushing the Local Government Minister to launch an independent inquiry.
Here is Ms Britnell’s statement in full:
Member for South West Coast Roma Britnell will ask Minister for Local Government Adem Somyurek to investigate governance procedures at Warrnambool City Council.
Ms Britnell said she has had contact from several members of the community concerned about the use of credit cards at the council.
Ms Britnell said she requested and has received a briefing on the matters from Warrnambool City Council Chief Executive Officer Peter Schneider where she told him of her intentions to speak with the Minister.
“Ratepayers rightly want reassurance the city council has appropriate governance procedures in place, to ensure the money it receives from the community though rates is used responsibly and appropriately,” Ms Britnell said.
“At the moment there is a lack of trust and the relationship between the community and the council is strained and cannot continue on this path.
“At our meeting Mr Schneider reported the council already has several investigations and audits underway. But I believe the Minister also has a responsibility to play a role.
“An independent investigation is the only way the relationship between the council and the community can begin to be rebuilt and I’ll be asking the minister to launch such an investigation to ensure ratepayers can have confidence their money is being spent responsibly for the benefit the city.”
Ms Britnell said she has also met with Warrnambool Ratepayers Association President Brian Kelson to discuss these matters.
Mayor Herbert swept up in WCC credit card scandal
Silence: Mayor Tony Herbert is running a mile from the credit card scandal that has been exposed within council. Image: WCC.
Carol Altmann – The Terrier
Tonight I start drilling into the detail of that big fat spending on one Warrnambool City Council corporate credit card and who is supposed to be keeping an eye on things.
Because, as it turns out, three of the people who are supposed to be keeping an eye on things have also been sitting at the very tables where the breakfasts and brunches have been served.
This includes Mayor Tony Herbert.
And it includes City Growth Manager Andrew Paton, who is designated to scrutinise and authorise spending on the credit card held by Visitor Economy Manager David McMahon.
Both of these people – Mayor Herbert and Mr Paton – are on a council tourism committee (VEAC) with Mr McMahon, with Cr Herbert as co-chair.
Cr David Owen was also on the committee.
As a result of Freedom of Information and cross-checking, I can tell you that this committee held every single one of its meetings in 2017 and 2018 over breakfast at either a café or restaurant.
And, you guessed it, each time the bill was paid with Mr McMahon’s credit card.
And each time that bill was well over $100: a $165 breakfast at the Pavilion, a $161 breakfast at the Mid City Motel, a $133 breakfast at Brightbird, another $112 meeting at Brightbird…
VEAC is the only committee of the council’s seven advisory committees to do this.
Official meet and eat: Breakfast at the Mid City Motel in May last year for $161.
All the other committees hold their meetings in council offices, probably under harsh lights and over a packet of assorted creams.
But wait, there’s more. There always is.
According to the documents released through FOI, Mr McMahon also wrote “VEAC” on a string of receipts that have nothing to do with VEAC’s official meetings.
In terms of accountability, this is the most worrisome.
Yet Mr McMahon’s receipts show claims for a string of “VEAC” breakfasts and brunches for which there are no minutes, or any public record at all that I could find.
Perhaps this is because most of these meals were enjoyed in the summer holiday period and so maybe everyone was wearing shorts and nobody had a pen.
As a result, we have no idea why the gathering was held, who was there, or what was discussed.
These five summer gatherings included:
a $154 breakfast at Main Beach Kiosk on 21 December 2017,
a $51 lunch at The Pavilion on Wednesday 3 January 2018;
$13 spent at Fishtales on Saturday 6 January 2018;
an $80.50 brunch at The Pavilion on Friday 12 January 2018 and;
a $102 breakfast at Clovelly Restaurant on Thursday 15 February 2018.
Boy, that is one very enthusiastic committee, which it isn’t, because it recently fell over and pretty much had to start again, but that is another story.
Of the above, one receipt in particular leaps off the page: the $80.50 spent at The Pavilion on 12 January 2018.
This $80.50 brunch was held during school holidays and included a kid’s pancake and two milkshakes: one caramel, one banana. In the absence of any further explanation, make of that what you will.
For other meals, there was no itemised receipt at all.
Despite this, all of the receipts were approved, so you and I and every other Warrnambool ratepayer picked up the bill.
An unofficial VEAC meeting over a $102 breakfast at Clovelly Restaurant in February 2018. There is no public record of who attended or what was discussed.
Mayor Herbert has made much of the council being “transparent” and he loves to use this word when he talks about the council under his watch: it sounds impressive, noble even, but in reality it rings hollow.
As he was committee chair and is the Mayor, I sent Cr Herbert a number of questions 12 days ago about this VEAC spending, including why it was allowed, whether he knew about the “unofficial” meetings, and how it could be justified to ratepayers.
The response from Mayor Herbert has been silence.
The response from the council has been silence.
Welcome to transparency and accountability, Warrnambool City Council style.
Only Cr Owen, who as we know is battling cancer, got back to me within 30 minutes of my questions and said he was “mortified” to learn that the meals for the official VEAC meetings had been paid for by ratepayers. He offered to repay his share.
This whole scenario strikes at the heart of what this credit card saga is all about:
Can all of the spending be justified?
Is all of it scrutinised?
As we are talking about public money, these questions apply whether it is a $7 banana milkshake or $600 worth of grazing plates.
It appears at some point that someone raised a red flag, because between $5000 and $6000 was repaid on Mr McMahon’s credit card before this all became public via FOI.
That is a lot of money. It means either the council’s credit card policy was extremely vague, or it was ignored.
We are not supposed to know about the repayments, but I will be writing more about those later.
The CEO of Strathbogie Shire Council resigned earlier this month after the Auditor General exposed credit card problems very similar to those we are seeing here.
And remember, what I am exposing is just one of the 81 credit cards in use at the WCC.
More soon.
In the meantime, I want to thank each of you for supporting The Terrier by either throwing something into The Terrier Tip Jar, which helps pay for FOIs, or sharing my stories on social media, or telling a friend, or liking the FB page…. thankyou. We are keeping the bastards honest.
On we go.
*VEAC is made up of two councillors, two senior WCC staff and five members of the community. I am not naming the community members, as they are not responsible for running the committee. Cr Peter Hulin is the new chair of VEAC and Cr Herbert is co-chair. Its first meeting for 2019 was held in offices at Flagstaff Hill.
Eye fillet, pork belly and seafood linguine: your rates at work
Carol Altmann – The Terrier
Just a week after the Warrnambool City Council voted to increase rates by 4.5%, I can reveal that ratepayers have footed the bill for thousands of dollars spent on dozens of dinners, lunches and breakfasts racked up on just one corporate credit card, by one council manager.
Freedom of Information documents show the council signed off on at least $6800 in meals, including dishes of eye fillet, seafood linguine, pork belly, softshell crab and tapas plates, paid for with a corporate credit card used by WCC Manager Visitor Economy David McMahon.
This credit card recorded more than $40,000 in spending for the 18 months from February 2017 to the end of October last year, which is when I lodged the FOI. The FOI finally came through in early June.
It shows the corporate credit card was used to cover food and drinks at meetings, gatherings, get-togethers and other social occasions that occurred with eye-popping regularity.
The local venues for these outings have been many and varied and include the Hotel Warrnambool, Graze, Hairy Goat, Fishtales, The Pavilion, Bojangles, Simon’s Waterfront, Mid-City Motel and the Main Beach Kiosk, with the bill often costing more than $150 at a time.
To be clear, Mr McMahon, who is based at Flagstaff Hill, was not spending this money only on himself.
The total credit card bill of more than $40,000 covers a broad range of expenses, from $20 car washes, to groceries bought at service stations, to hardware, a $470 helicopter ride as a competition prize, $434 to hire a function room at the Lady Bay Resort, right up to thousands spent on accommodation and travel.
Receipt for a breakfast meeting held at the Mid City Motel in May last year at a cost of more than $160.
Much of this spending may be perfectly legitimate in the course of conducting normal council business, but for this first story – this is the first of a series – I am focusing on the incessant eating and drinking, which, the council argues, is all part of the job.
Let me give you a few examples, from just one month, May 2018. (You can see the full list at the end of this piece).
On 17 May last year, Mr McMahon’s card was used to pay for a breakfast meeting at the Midcity hotel at a cost of $161.30.
The next day, the card was used for breakfast at Fishtales for $97.10.
A week later, on 27 May, another $57.90 was spent on breakfast at Fishtales and $13.50 at the Main beach kiosk.
Four days after this, on 31 May, another $172.50 was spent on “meals” at Bojangles.
And that is just for May 2018.
Dinner at the Hotel Warrnambool, May 2017, at a cost of $173.
If we wind back to 12 May 2017, we find $173 was spent at Hotel Warrnambool on a dinner that included dishes of eye fillet, pork belly and seafood linguine.
Less than a month later, on 1 June 2017, another $213.60 was spent on more meals at the Hotel Warrnambool that included more dishes of eye fillet, seafood linguine and soft shell crab.
Swing into July 2017 and you will find a neat $546 spent on share plates and tapas at The Hairy Goat on 8 July.
A few weeks later, on 14 August, another $314.50 was spent at the same place, on more share plates and tapas.
Bang, there goes another $1200, and we have no idea why, because the council has provided no details.
And then there are the coffees, the endless coffees: $20 here, $15 there, $48 and $56 other times, and on it goes as ratepayers pick up the tab for coffees on a regular basis.
For example, in March this year, more than $64.20 was spent on coffees in just one day, from two different locations: the Espresso Mobile Café and at Rough Diamond.
You get the picture.
But there is more, because this is not a complete picture.
The credit card statements released exclude a number of transactions removed by the council because they deemed them “not relevant” as someone repaid them.
The council won’t reveal who made these repayments, for which transactions, and why, but I have good information to suggest the total repayments were between $5000-$6000.
This means a further $5000-6000 was spent on this card that should not have been.
Missing: the cost of meals and drinks consumed at a tourism conference last year have been removed from the credit card documents released under FOI.
I can also say that at least one of these missing transactions is for more than $1000 spent on food and drinks at the Cape Schanck RACV resort during a tourism conference last July, which I wrote about earlier this year and which prompted this deeper investigation.
So that’s thousands in spending on meals we know about, and thousands more that was repaid and is now considered secret.
The fact that this sort of thing is going when ratepayers are being asked to pay more because of “tough times” is disgraceful.
And remember that this FOI covers just one credit card, for one council staff member.
There are 81 corporate credit cards in circulation at WCC (elected councillors don’t receive cards).
It is also important to remember that we are not talking about spending by a private business. This is local government, which means this is public money, your money and for which every cent must be accountable.
Receipt for another dinner at the Hotel Warrnambool in June 2017, at a cost of $213.
So who was scrutinising Mr McMahon’s credit card transactions?
The council won’t say exactly, but confirms it must be a line manager, so I would assume this means Mr McMahon’s manager, Director City Growth Andrew Paton, must have signed off on the eye fillets and grazing plates and endless breakfasts and coffees, and considered it all perfectly okay.
Such is the culture that has been allowed to develop within the upper echelons of council over the last decade – a culture of entitlement, with very little public scrutiny.
It is this culture that most ratepayers hoped would end under the new CEO Peter Schneider.
To be honest, I thought that when this FOI came to light, Mr Schneider and the council would rush to explain that these days of excess were long gone, but I was completely wrong.
Instead, the responses to my first questions were a big bowl of corporate, alphabet gloop.
Here is one spoonful, given in answer to one very simple question “how is this justified to ratepayers?”:
“Each authorized (sic) holder of a corporate credit card will perform different roles requiring different stakeholders, different working hours and locations, and therefore different costs of doing business. Some roles may require extensive engagement with business and industry, volunteers, residents, regional engagement and statewide engagement, other roles may not.
“The use of credit cards as a payment mechanism can be of considerable benefit to the Council, ratepayers and the various individuals and organisations that supply goods and services. The benefits are in the form of efficient procurement and reduced administration costs.”
As it happens, the Victorian Auditor General’s Office has just released a report about the potential for corruption and fraud around council corporate credit cards, particularly on spending for meals, travel and petrol. The council says it is taking notice of the recommendations.
I will be writing much more on this particular credit card because there is so much more to tell.
The next instalment is coming soon. In the meantime, here is the full list of dining to digest. See below.
[Thankyou so very much to those who have supported The Terrier with a contribution to the Tip Jar:this story is the Tip Jar at work. You can be part of it here.]
March 2017
21.2.17 Pavilion $18.30
May 2017
3.5.17 Fishtales $18.00
12.5.17 Warrnambool Hotel $173.00
23.5.17 Bottega Toscana $7.60
25.5.17 Zambrero Warrnambool $11.90
June 2017
1.6.17 Hotel Warrnambool $213.60
7.6.17 Pavilion $10.00
7.6.17 Pavilion $29.00
8.6.17 Warrnambool Hotel $63.00
21.10.17 Café Lava $10.00
26.6.17 Figsellers café $27.60
26.6.17 Wines Patisserie $26.20
26.6.17 Fishtales $14.00
27.6.17 Wines Patisserie $27.00
27.6.17 Wines Patisserie $12.00
30.6.17 Coffee Treat $28.70
30.6.17 Lady Bay Resort $188.40
July 2017
1.7.17 Graze $78.50
1.7.17 Fishtales $10.20
2.7.17 Fishtales $42.30
3.7.17 Curly’s Pizza $26.80
8.7.17 Coffee Treat $38.20
4.7.17 Pinky’s Pizza Ribs $32.70
4.7.17 Pinky’s Pizza Ribs $9.80
4.7.17 Coffee Treat $38.20
5.7.17 Coffee Treat $20.20
5.7.17 Coffee Treat $32.20
7.7.17 Coffee Treat $20.20
8.7.17 Seanchai Irish Pub $48.10
8.7.17 The Hairy Goat $546.00
8.7.17 Brown’s Depot Bakery $41.00
9.7.17 Cactus Jam $40.00
9.7.17 McDonald’s $18.60
10.7.17 Fishtales $22.20
14.7.17 Bottega Toscana $35.30
19.7.17 Two Tarts Baking $139.00
August 2017
4.8.17 Hoppy’s Café $19.20
7.8.17 Fishtales $20.00
14.8.17 Hairy Goat $314.50
Sept 2017
21.9.17 Pavilion $79.00
21.9.17 Pavilion $4.00
22.9.17 Brightbird $18.40
22.9.17 Fishtales $33.70
October 2017
4.10.17 Fishtales $80.80
26.10.17 Pavilion $165.50
November 2017
1.11.17 Hotel Warrnambool $202.00
3.11.17 Espresso van F/Hill $56.00
4.11.17 Red Spoon Thai $49.80
6.11.17 Espresso van F/Hill $17.00
28.11.17 Rafferty’s Tavern $233.20
28.11.17 Rafferty’s Tavern $36.10
December 2017
15.12.17 Pavilion $106.50
21.12.17 Main Beach Kiosk $154.00
26.12.17 Main Beach Kiosk $45.00
January 2018
3.1.18 Pavilion $51.00
6.1.18 Fishtales $13.80
9.1.18 Pavilion $185.00
12.1.18 Pavilion $80.50
13.1.18 Fishtales $19.50
17.1.18 Brightbird $48.60
24.1.18 Espresso van F/Hill $33.00
25.1.18 Simon’s Waterfront $26.50
February 2018
03.02.18 Maritime $175.00
15.02.18 Maritime $102.00
28.02.18 Graze $21.90
March 2018
01.03.18 Fishtales $45.00
06.03.18 Fishtales $24.00
07.03.18 Espresso van F/H $48.00
08.03.18 Rough Diamond $48.00
10.03.18 Figsellers $60.00
15.03.18 Brightbird $133.00
23,03.18 Fishtales $12.00
April 2018
15.04.18 Coffee Treat $35.00
17.04.18 Pavilion $50.00
26.04.18 Fishtales $9.00
May 2018
08.05.18 Graze $60.00
09.05.18 Figsellers $9.20
15.05.18 Figsellers $24.60
17.05.18 Mid City $161.30
18.05.18 Fishtales $97.10
27.05.18 Fishtales $57.90
27.05.18 Main Beach kiosk $13.50
30.05.18 Coffee Treat $13.50
31.05.18 BoJangles $172.50
June 2018
27.06.18 Coffee Treat $12.00
27.06.18 Whalers $614.00
July 2018
04.07.18 Fishtales $32.90
06.07.18 Brightbird $37.60
19.07.18 Bightbird $112.00
24.07.18 Pavilion $10.00
August 2018
01.08.18 BoJangles $164.00
02.08.18 Brightbird $74.60
17.08.18 Graze $26.80
September 2018
24.09.18 Fishtales $18.00
26.09.18 Pavilion $53.40
27.09.18 Browns Bakery $125.00
October 2018
05.10.18 Graze $19.20
08.10.18 Fishtales $22.00
16.10.18 Graze $55.60
30.10.18 Graze $9.60
Total: $6845.70
WCC responses to first batch of credit card questions in full
These are the W’bool City Council responses to my first batch of questions about the use of a corporate credit card by one of its senior managers. That story is here.
Is the WCC aware of the use of a corporate credit card for such expenditure and is this type of expenditure the norm for all WCC managers who use corporate credit cards?
No.
How is this spending justified to ratepayers?
Each authorized holder of a corporate credit card will perform different roles requiring different stakeholders, different working hours and locations, and therefore different costs of doing business. Some roles may require extensive engagement with business and industry, volunteers, residents, regional engagement and statewide engagement, other roles may not. The use of credit cards as a payment mechanism can be of considerable benefit to the Council, ratepayers and the various individuals and organisations that supply goods and services. The benefits are in the form of efficient procurement and reduced administration costs.
Does Mr McMahon’s manager, Director City Growth Andrew Paton, sign off on Mr McMahon’s monthly credit card expenditure? If Mr Paton does not give this approval, who does?
The line manager of the authorised holder of the corporate credit card provides approval.
Several transactions have been deleted from the statements released because they were deemed irrelevant, ie. they were repaid. Who has repaid these funds and for what reason? How much has been repaid since Mr McMahon received a corporate credit card?
A Corporate Credit Card Policy* exists to ensure relevant internal controls are in place. These apply to all authorised credit card holders.
Does Mr McMahon still have access to a corporate credit card?
Yes.
* I asked for a copy of this credit card policy and the council’s travel policy. Neither are available to the public.
We don’t want ‘sexy’, we just want sensible spending
Carol Altmann – The Terrier
Isn’t it fascinating how most of the W’bool City councillors take zero responsibility for whacking us with more rates, as if it all just happened around them?
Like a dog that destroys the couch, the councillors are anguished and tormented once the damage has been done, but did nothing to stop the damage in the first place.
Instead – they plead – the problems that have led to us paying 4.5% more in rates for the next two years were “inherited”.
They also plead that WCC is “special” compared to every other council in Victoria because, after all, 77 of the 79 councils will keep their rates capped.
Hold on.
What we have “inherited” is more than 10 years of most councillors being too weak to ask probing questions of former CEO Bruce Anson and his senior staff.
Not only did these councillors avoid any probing questions (and here Crs Neoh and Gaston, I am looking at you), they kept ticking off on Mr Anson’s annual performance reviews and pay-rises because he and his team were apparently doing such a terrific job.
We paid Mr Anson and his senior staff handsomely because they were in charge of the ship: the captain and his crew.
And we elected our councillors in the belief that they would raise their binoculars, keep an eye on the ship and steer it well away from the rocks.
We didn’t ask to be “sexy” or “special”: we just wanted the council to do its job.
In this, we are like residents of every other city and town across Victoria.
But here we are, on the rocks, for the next two years at least, and the couch is wrecked, yet our councillors are still expecting a pat on the head.
Not this time.
Good on the ratepayers for biting back. We need Warrnambool to be guided by watchdogs, not lapdogs.
