Investigation summaries

IBAC's investigation did not substantiate any allegation of corrupt conduct by councillors. Likewise, the investigation did not establish any instances of favouritism being afforded to specific developers by public officers.

However, IBAC's investigation did establish that a senior employee of the Council failed to adequately manage a conflict of interest when they engaged a consultant for several years. The consultant was a friend of the senior employee. The senior employee disagreed the relationship with the consultant gave rise to a conflict of interest; however IBAC considered the initial and continuing engagement of this consultant did not comply with the Council's policies and guidelines around procurement, recruitment, and the staff code of conduct.

Additionally, it appears this non-compliance was not identified in any audits or reviews of the Council's procurement during the period the consultant was engaged.

Operation Eden identified a number of opportunities for Wodonga City Council to strengthen its training and communications to ensure that all staff understand their obligations and are supported to report suspected misconduct and corruption, and that procurement is subject to regular audits to verify compliance.

In September and November 2020, Wodonga City Council wrote to IBAC outlining the actions it had taken to address the corruption vulnerabilities identified in Operation Eden.

The Council's response outlined changes which were implemented in 2017, prior to the investigation, and those which have been subsequently implemented.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

Wodonga City Council's response is as follows:

Actions to ensure all staff understand their obligations including in relation to the Staff Code of Conduct, procurement and conflicts of interest

In 2017, the Council implemented online compliance training to ensure all staff understand the range of obligations that apply to them. The on-line component supplements the in-person induction training undertaken by all staff and other training that may be undertaken by individual staff and which is specific to their professional skills and the requirements of council.

The online compliance training is mandatory for all staff and is to be completed every two years. The modules include key governance policies and integrity protocols, ranging from conflict of interest to procurement to public interest disclosures and fraud prevention. Staff without computer access complete the training in hard copy.  

The online compliance training will be supplemented every other year by in-person training.

All new staff complete the conflict of interest module at the commencement of their employment. The module is updated to ensure it addresses any changes in the law and industry expectations that take place from time to time. Conflict of interest obligations are also expressly addressed in each employee’s letter of offer of employment.

Staff are required to confirm that they have read and agree to abide by the Staff Code of Conduct upon commencement with the Council and again every 12 months as a part of annual performance reviews. The Code of Conduct is revised every year to address changes in the law and industry standards. This process is audited and followed through to ensure a signed confirmation has been received.

Council has a range of policy and procedures available to all staff to reference on its intranet site, covering topics including procurement, conflict of interest, fraud prevention and control, and gifts benefits and hospitality. Electronic approval systems are in place for procurement that includes procurement thresholds, delegations required, specified limits and supporting documentation. All exemptions can only be approved by the CEO and requires extensive and detailed rationale. The procurement policy and processes are discussed with every new employee during the mandatory induction session.

Training and communication about obligations to report suspected misconduct and corruption, and which external agencies can receive such reports

When Council in 2017 implemented online compliance training for all staff, it required all staff to complete a module on (then) protected disclosures (PDs). The module explained what PDs are, staff members’ obligations to report, and the range of ways to report suspected corrupt or improper conduct both within Council and externally. Since then all new staff complete this module at the time of the commencement of their employment. The module is updated to ensure it addresses any changes in the law and industry expectations, and so now carries the title 'public interest disclosures'. Staff who do not have access to this module electronically receive the information in hard copy to read and sign the acknowledgment form.

A Public Interest Disclosure information is also publically available on Council's website.

Every quarter Council conducts "all staff forums" and these include presentations on key strategic and governance policies, such as fraud, gifts and hospitality, and conflict of interest. For example, the next all staff forum will include a video presentation on Public Interest Disclosures. The forums are video recorded and available for subsequent viewing for staff unable to participate on the day.

Staff noticeboards continue to be used to support the on-line messaging, and this is evidenced by new posters recently printed and distributed on the subject of Public Interest Disclosures.

Council annexes to every employment contract its Staff Code of Conduct, Fraud Prevention and Management Policy and its Public Interest Disclosure Procedures which the new employee must read and acknowledge they understand. These include detailed information about fraud and corruption and mechanisms through which reports can be made both within Council and externally, including the names and details of the agencies that can receive these reports.

The Staff Code of Conduct includes a strong focus on integrity in local government including sections on making good publicly accountable decisions, being bold and speaking up, corrupt conduct and how to make a public interest disclosure, fraud, compliance with policy and the law, conflict of interest, gifts, meals and entertainment, and appropriate use (and how to avoid misuse) of Council equipment, assets, intellectual property and services.

Strong complaint handling systems and processes, including in relation to public interest disclosures and breaches of Staff Code of Conduct and organisational policy and procedures

Council has complaint handling systems and processes for external complaints (Complaint Handling Policy), internal grievances (Issue Resolution Directive), public interest disclosures (Public Interest Disclosure Procedures) and staff misconduct (Discipline Directive). Each of these are well established at Council and have provided appropriate frameworks and support for the allocation of responsibility and process for the management and response to complaints and reports of wrongdoing that have arisen from time to time. This has included the enforcement of the Staff Code of Conduct and Council policy and procedures.

Additionally, Council has a staff complaints directive and procedures to manage staff complaints, grievances and problems effectively and efficiently in a coordinated and systematic manner. This directive addresses, but is not limited to, complaints/concerns relating to inappropriate staff behaviour, breaches of the staff code of conduct and the management and mismanagement of Council policies and procedures. This directive is centred on a strong culture where all staff members are encouraged to safely contribute to the reinforcing of reasonable behavioural expectations with the purpose of achieving and maintaining a respectful and ethical workplace culture.

Council is presently developing a Staff Complaints Framework which is expected to be finalised within the month and then issued to staff. This is an easy reference chart to enable staff to follow the correct channels to quickly take appropriate action on any complaint/workplace issue.

Ensuring procurement is subject to regular audits that verify compliance with procurement and conflict of interest policies

Council's internal auditors compared the recommendations in the September 2019 IBAC Special report on corruption risks associated with local government against their most recent procurement internal audit dated March 2018 and presented a summary of the gaps to the September 16, 2020 Audit and Risk Committee meeting. Due to the small number of gaps and the low risk associated with them, the Audit and Risk Committee’s recommendation was that a separate review was not warranted and to incorporate them into the next procurement review due within the next 2 years.

Council has nominated councillor and staff conflict of interest as an internal audit topic to be included in the next Internal Audit Plan which is currently in development for adoption in mid-2021.

Council has completed an 'Accounts Payable' internal audit, incorporating the use of data analysis, in the first half of 2020, with the report presented at the September 2020 Audit and Risk Committee meeting.

Council presented a scope for a 'Credit Card and Expense Reimbursement' internal audit to the September Audit and Risk Committee meeting which was endorsed. However, the timing of the review has been delayed to the 2021 year as Covid-19 related pressures have impacted the implementation of a new expense management system and roll-out of new credit cards that are to be included in the review.

Council always includes Procurement, Accounts Payable, Payroll and Credit cards and expense reimbursements as topics for internal audit in each internal audit plan, so they are reviewed at a minimum every 3-4 years.