21 Nov 2019


Scope of the examination

What the investigation and audit involved.

The Inspectorate is the dedicated integrity agency for local government in Victoria. The Chief Municipal Inspector (CMI) leads the Inspectorate and has powers as set out in the Local Government Act 1989 (Act) to enable the Inspectorate to examine, investigate and prosecute any matter relating to a Council’s operations and any breaches of the Act.

An anonymous complaint was received in June 2018, making a series of allegations that related to possible offences and breaches of the Act and governance and operational failings at the shire. Inspectorate staff attended council offices in September 2018, April 2019 and May 2019 to request documents and interview council staff, culminating in a coordinated interview of 20 staff from the Hopetoun depot in August 2019. The Inspectorate conducted a comprehensive investigation into the specific allegations related to the council, which focused on the key topics of staff use of plant and equipment, and mismanagement of council assets including the unauthorised use or sale of council equipment, sale of land, rates recovery and corporate credit cards.

Alongside the investigation, the Inspectorate also examined governance and operational matters including asset, financial and employment management arrangements. The examination took into account findings from a 2012 review, relevant audits by other government agencies, internal audits and the actions subsequently taken by the council.

The Inspectorate did not examine all areas of council activity but concentrated on a number of risk areas or where particular allegations were made.

Advertisements were placed in local newspapers appealing for public assistance with the Inspectorate’s examination

Snapshot of Yarriambiack Shire Council

Location and profile of the council.

Yarriambiack Shire Council covers 7158 km2 and at the 2016 Census, had a population of 6,674. The Shire is divided into three wards, split between seven councillors. Hopetoun Ward includes Patchewollock, Tempy, Speed, Lascelles, Woomelang, Hopetoun, Yaapeet and Beulah. Warracknabeal Ward includes Brim and Warracknabeal. Dunmunkle Ward includes Minyip, Murtoa and Rupanyup.

The population is concentrated in a number of small towns which service the surrounding broad-hectare farming properties. Yarriambiack Shire is the heartland of grain production and handling in the Wimmera and Mallee.a The main industry is agriculture which accounts for almost half the workforce. Many other residents depend indirectly on farming as they are employed in services used by the farming population.b On the Index of Socioeconomic Disability, Yarriambiack ranked 73rd out of 79 councils.c

a Source: Know Your Council website

b Source: Yarriambiack Shire Council Annual Report 2017/18

c Source: Census 2016, 2033.0.55.001, Socio Economic Index of Areas (SEIFA) (Australia)


Main allegations and concerns and previous audits of the council.

As part of this investigation, the Inspectorate looked at the council's governance practices and need for improvements, the specifics of allegations about wrongdoing, and previous audits conducted at the council.

Main areas of investigation

Asset and resource management

Issues with the use and disposal of assets and equipment.

A fundamental role of councils governing for the present day and the future is the responsible management of public assets. To ensure the best outcomes for the community, councils must plan for the long term and consider the cumulative effects of all decisions made regarding public assets.

Allegation topics

Financial management

How procurement, rates, credit cards and grants programs were managed.

Councils are responsible for the management of public funds, which includes federal and state government grants and ratepayer contributions. The Act requires a council to ensure that resources are used efficiently and effectively and services are provided in accordance with best value principles to meet the needs of the community. The importance of responsible administration by local government of public finances cannot be overstated.


Human resources management

Contracts and employment issues.

Councils must responsibly manage employees and external contracting staff and ensure that all relevant human resources procedures and policies are in place and adhered to. Effective human resources management is fundamental to any organisation’s operation but is particularly important for councils as a publicly-funded employer and even more so in regional areas as a major employer.


General governance

Issues with areas such as record keeping, policies at committees at the council.

Governance arrangements are the necessary procedures and monitoring systems to ensure that council is performing all of its functions to the required standard and in accordance with its legal obligations.

As part of the examination, the Inspectorate identified governance areas where improvement is recommended. It was flagged by council that improvement is required across the organisation in regard to engaging staff at all levels to ensure they are aware of their legislative requirements and responsibilities.


Conclusion and council response

The overall governance culture of the organisation prior to late 2018 was described as being generally poor and one where individuals relied on others to do the right thing, rather than accept the responsibility themselves.

Across key facets of the organisation the focus was predominantly on ‘getting the job done’, which was often done at any cost with little regard to following policies, processes and legislation. There was little focus on good governance.

Leadership from the top is an essential element in creating a positive organisational culture. The council leadership team must communicate expectations to staff and demonstrate appropriate values. For example, in works depots, given their sometimes isolated nature, management needs to be visible and to effectively communicate desirable organisational behaviours.

The Inspectorate acknowledges the steps taken by council since mid-2018 but notes this report contains many recommendations for issues that need to be addressed as a matter of priority. Importantly, it is incumbent on the elected council to maintain oversight on governance arrangements for the organisation they represent. This is achieved through: a strategy and policy framework that councillors drive; proper management of the CEO; and effective management reports that provide overarching insight into the operations of the organisation.

Council response

The council and individuals that may be identified due to their current or former position were provided a copy of this report in advance and invited to provide comment. One formal response was received from the council which was reproduced in the report and can be viewed below.

Yarriambiack Shire Council response
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