The ‘room hire’ was not room hire at all, but in fact an unofficial thankyou party for a council staff member, organised by former tourism head David McMahon and paid for on his credit card.
The invoice was a foil to hide a drinks bill of $538.50 that included three bottles of red wine for a total cost of $325. (Food made up the total bill of $736.50).
According to the Ombudsman’s report, City Growth Manager Andrew Paton and Director Corporate Strategies Peter Utri both attended this function and offered to pay their share as they did not consider it work related.
Mr McMahon had a different view: ” I can’t speak for them, but I went there under the full knowledge that this was a work ‘thank you’ function. I don’t remember anyone having a discussion …”
Mr McMahon’s lawyer had a similar view and told the Ombudsman’s investigation:
“[David McMahon] was asked to arrange a thank you dinner by his employer for a staff member. There was never any discussion about payment. His employer attended the dinner. There was no offer to pay or contribute to the bill.”
The second “room hire”, as it turns out, was also a euphemism for a huge drinks bill.
I will post that in a moment. (My head is swooning at the lies.)
Ombudsman’s report into WCC credit cards exposes largesse
Carol Altmann – The Terrier
JUST IN: The Victorian Ombudsman’s long-awaited report into credit card use and misuse at Warrnambool City Council has just hit the decks.
The bottom line to this 10-month Ombudsman’s investigation is that Warrnambool ratepayers can now take much greater comfort in knowing that every cent spent on a WCC credit card will come under much greater internal scrutiny.
As we know, this whole scandal revolved around not only blatant and unauthorised largesse by one individual in former tourism manager David McMahon, but the spending by several others that was permissible under the council’s then policies and rules.
This is part of the Ombudsman Deborah Glass’s eloquent summary:
“The conclusion of this investigation is that while there is evidence of lax practices by staff and poor judgment by some in senior management, credit card misuse was not widespread.
“Serious misuse was limited to one individual, although the level of abuse was greater than had been exposed or admitted to, in some instances also suggested a deliberate intention to deceive.
“The people of Warrnambool do not expect their hard-earned payment of rates to be funding espresso martinis, travel to Melbourne coinciding with football games, spa resort massages for family members, or hundreds of dollars in alcoholic beverages, described on the invoice as ‘Room Hire’.
‘But while the individual no longer works for the Council and has repaid the money, the damage has been done.
‘Senior management could and should have done more at the time the misuse was first exposed in 2018.
‘Although this inaction was neither dishonest nor systemic, it gave raise to the impression of a cover-up.
‘The then CEO told us he ‘would have dealt with it differently had the full picture been known at the time – an important, indeed painful lesson that integrity rules exist for a reason.
‘The impression of large numbers of snouts in the public trough was also exacerbated by overly generous hospitality policies.
‘It was understandable that Council should wish to support local traders affected by the city centre construction works. But to an observer, the holding of meetings by Council officers in local cafes and restaurants was no different from the staff going out for lunches and coffees on the public purse.
‘Combined with lax adherence to processes and insufficient oversight by some, it is not surprising these public displays of eating and drinking gave rise to the impression they apparently did.
‘Policies and guidance have since been tightened, external audits and reviews are being implemented and fewer credit cards are now in use’.”
The report goes on to make three recommendations:
the council consider referring Mr McMahon’s actions to the police;
the council reconsider the number of credit cards in use and the rationale of the issuing of the cards. (There were up to 93 cards in use in 2018-19, it’s now down to around 70.) and;
Implement the recommendations of the two audit reports and report back to the Ombudsman within six months.
There are a number of interesting revelations that start to answer some long-standing questions, including:
Mr McMahon repaid $5666.84 on Nov 5 and was given a first and final warning from then CEO Bruce Anson.
Mr McMahon also handed in his credit card. On 20 December, however, City Growth Manager (and Mr McMahon’s boss) approved Mr McMahon’s request to have his credit card back.
After a series of exclusive stories published by The Terrier last July, Mr McMahon met with the new CEO Peter Schneider and admitted further unauthorised transactions. He repaid another $3071.73 and handed in his resignation. Mr Schneider referred the matter to IBAC;
The curious receipt for “room hire” at the Lady Bay hotel on 10 October 2018 that cost ratepayers $736.50 – was an unofficial thankyou dinner for a colleague attended by Andrew Paton, Peter Utri, David McMahon and others.
Drinks at the infamous Cape Schanck tourism conference in July 2018 – the knees-up that started this whole investigation – included 34 espresso martinis at $18 each and a single shot of Sullivan’s Cove American cask whiskey for $38.
No wonder this whole saga has left ratepayers – and the council – with a massive headache.
More to come.
WCC: does top job reappointment pass the pub test?
Warrnambool City Council Acting CEO Vikki King was due to have her previous contract expire in August, but has now been reappointed for another five years. Photo: WCC.
Carol Altmann – The Terrier
As promised, I am determined to keep unpicking the stories in and around the sacking of the former Warrnambool City Council CEO, Peter Schneider.
One of them is how the acting CEO, Vikki King, kept her other job as a senior council manager.
Let me break it down.
Before becoming acting CEO on 14 July, Ms King was the council’s Director of Community Development and had been since 2015.
But that contract was due to expire in the first week of August.
I have since learned that this position was going to be advertised by Mr Schneider and, of course, Ms King would be able to apply.
(This is not unusual in the public service, where there are no guarantees a contract will be renewed, or – if you re-apply – that you will be reappointed.)
As it came to pass, Ms King did not have to reapply for her job because, as we know, by the first week of August, Mr Schneider was gone and Ms King was named as his replacement for up to 12 months.
It was then revealed that Ms King was not only acting CEO, but would also continue on as Director of Community Development.
How?
Well, it turns out her contract was renewed in August for another five years.
How?
Well, as acting CEO, Ms King can’t hire herself, but it is legal under the Local Government Act for a CEO to delegate this task off to someone else.
So Ms King was able to keep her old job by – as acting CEO – having someone else in council re-hire her.
Just to reiterate, such delegation is legal under the Local Government Act 2020, but does it pass the proverbial “pub test”?
I have been searching for another example of this very same scenario: where a senior council manager who was due to have their contract expire, is appointed acting CEO, and then delegates off the authority to re-hire themselves.
I couldn’t find an example – maybe you will have better luck – but no wonder it feels like Warrnambool has fallen down a rabbit hole and woken up to find a Mad Hatter’s tea party in full swing.
There are other questions:
Did the council use an independent consultant to help assess Ms King’s performance over the past five years?
This would help reassure all of us that this part of the resigning was completely at arm’s length.
Why was the reappointment for another five years and not 12 months or 24 months?
This would have allowed a new CEO to make his or her own decision on the position.
And, lastly, who was the council person delegated to re-hire Ms King?
My understanding is that it was not a senior council manager, as you would perhaps expect, but a part-time staff member.
We shall see if all of the above is made clear in the council’s responses.
As it sits, the council can’t start looking for a new CEO, because the old CEO – Mr Schneider – is taking action in the Supreme Court to try and get his job back.
That case could take several months to resolve.
In the meantime, Ms King has a new job, plus her old job, and the four councillors who got rid of Mr Schneider are seeking re-election.
Imagine if Mr Schneider is successful and resumes his spot as CEO?
More tea? Cake?
Would you like to see The Terrier keep digging? Please visit the tip jar.
CEO sacking: Secret meetings and confidential documents
Confidential documents relating to the former CEO were sent anonymously to Cr Cassidy. Image: Governmentnews.com
Carol Altmann – The Terrier
If everything that dumped Warrnambool City Council CEO Peter Schneider says in his affidavit is true, our council has gone bad.
Mr Schneider’s allegations – which will be put to the Supreme Court on Thursday for a directions hearing – paints a picture of a toxic council, broken by old rivalries and unhealthy, cosy relationships that must end.
And they can only end by a metaphorical deep clean at the next election.
I am hopeful that the full affidavit can be published after Thursday, under the protection of the court, but many of the allegations are out there and they are ugly.
They include the decade-old hate fest between Crs Mike Neoh and Kylie Gaston and their nemesis Peter Hulin which just rolls on.
It includes concerns about the “close relationships” of some councillors to senior council staff, including the Director of Community Development Vikki King, now acting CEO, and former governance manager Anne-Maree Neal.
And it also raises claims that three councillors – Neoh, Gaston and Cr David Owen – allegedly rated Mr Schneider so poorly in a review in May that the consultant, Peter Berry, who was running the review said it could only have been motivated by “vindictiveness” and “spite”.
These are strong words.
And then there is my personal favourite: Cr Neoh allegedly laying the heavy on Mr Schneider for his handling of the credit card saga.
We all know, from the council’s own statements, that it was former CEO Bruce Anson who allowed David McMahon to repay money, to keep his job as a senior manager, and who kept the whole thing under wraps.
Just a blip.
No wonder ratepayers are starting to wonder if Mr Schneider was dumped because he wasn’t up to the job, or dumped because he wasn’t Mr Anson, or dumped because he got along with Cr Hulin.
One thing is certain, the push to get rid of Mr Schneider became dirty, very early.
Here is something you don’t know:
You may recall that Cr Gaston, in a string of questions to Mayor Tony Herbert at this month’s council meeting, asked why he and Cr Sue Cassidy had met at Mr Schneider’s private home for two hours’ on a Sunday in February.
Cr Gaston told the council a number of “red flags” were raised at this gathering.
What I have since learned is that Cr Cassidy had, by that time, received highly confidential documents, anonymously, in the mail, about Mr Schneider’s job application.
From what I understand, these documents related to personality and psychological testing that formed part of the job application.
This is highly personal stuff, and so very few people connected to the council had access to these documents.
Yet they were mailed – anonymously – to Cr Cassidy, and for a reason. Who was behind that move?
No wonder Cr Cassidy was keen to talk to Mr Schneider, face-to-face, in February.
Interestingly, Cr Cassidy was not among the councillors named in Mr Schneider’s affidavit as having acted with “spite” or “vindictiveness” in his May review.
Perhaps, in May, Cr Cassidy still thought he was doing a good job.
Cr Cassidy has declined to comment on this leaked document and Cr Herbert would only say “there were some concerns about confidential information that was sent to Sue.”
On top of all this, Mr Schneider’s affidavit also refers to a particular email written by Cr Gaston.
This email, written in July,Gas allegedly confirms Cr Gaston was seeking legal advice back in February about Mr Schneider’s contract.
In other words, several councillors were starting to seek legal advice on how to get rid of him and how much it would cost.
Who did these councillors expect to pay for this advice? Remind me again?
The Local Government Inspectorate is looking into all this and its findings can’t come soon enough.
Neither, in my view, can the election when ratepayers and residents will decide whether this is the sort of council we want to serve us, or whether it is time for a generational change.
CEO sacking: secret meetings, missing docs and payout shock
The more is revealed about the sacking of the WCC chief, the more questions arise. Stock image.
Carol Altmann – The Terrier
For those who missed my post stream during the final meeting of the Warrnambool City Council, here is the string of revelations regarding the dumping of the CEO:
Good god – this is getting interesting! Cr Kylie Gaston has asked a number of punchy questions to the Mayor about the whole sacking of the CEO saga.
We are now learning:
1. Nine applications during the recruitment of the previous CEO went missing. The recruitment agency had an IT problem. (I hope we got a refund from that recruitment agency).
2. The council and CEO Schneider met on 21 February to discuss issues with the CEO’s performance.
3. Crs Cassidy and Herbert went to Peter Schneider’s private house on a Sunday morning on February 23 to discuss issues that Cr Cassidy had with the CEO. Cr Herbert set up this meeting. Cr Cassidy says she now considers it was unprofessional to have this meeting at Mr Schneider’s house.
4. Cr Gaston says councillors didn’t realise what they signed up for with the CEO’s contract that would allow such a big payout of around $364,000.
5. Another big allegation – that the former CEO signed up long-term contracts of several senior managers knowing that he was leaving. I wonder who these people were? (Ms King – the new acting CEO – was not among them.)
6. Cr Sycopoulis is raising whether the CEO payout is the end of the matter or if extra legal fees may be coming, if there is legal action by Peter Schneider.
7. Cr Gaston says a performance review of the former CEO in May was not favourable and that, in effect, his sacking was not “out of the blue”.
8. It sounds like the WCC didn’t know what it signed up for with the former CEO’s contract. (Good grief). The size of the payout came as a surprise. Not good enough councillors.
9. Bring on the election – there are no winners here.
Carol Altmann – The Terrier
