Perceptions of corruption in local government

Music intro

INTERVIEWER: Hello and welcome to this IBAC podcast on perceptions of corruption within local government. IBAC is Victoria’s anti-corruption agency and our role is to expose and prevent public sector corruption and police misconduct.

Victoria’s 79 councils employ around 50,000 people and manage more than $70 billion dollars in public assets. When corruption occurs in one council, it doesn’t just impact that community, it can damage trust across all local government.  And when it comes to trust, perceptions matter. Councils can’t just do good; they must be seen to do good.

IBAC’s latest perception report turns the gaze inward and shows how employees themselves perceive corruption and integrity within their own council.

Derived from surveys IBAC has conducted since 2013, the perceptions show what employees think, how their views have changed, and importantly, where they see gaps and weaknesses.

To discuss these issues, we are joined today by IBAC’s Deputy Commissioner David Wolf and the Municipal Association of Victoria CEO Kerry Thompson.

Thanks for joining us David and Kerry.

INTERVIEWER: David, if I could start with you. What do IBAC’s perceptions survey tell us about the overall ethical culture in local government. Was there anything in the report that surprised you?

DAVID WOLF: Well thanks for that question and the opportunity to talk about this report. It’s a terrific report and provides insights into what local government employees think about corruption risks at a point in time and also builds on those 2016 survey responses and allows for that comparison between now and then, what might have changed. So, what’s important about it? Two points, firstly, the survey data reveals there is a vulnerability from employees perspective and given their closeness to the business of local government, this is particularly illuminating, and the important point I’ll make here is that the survey responses largely matches with our broader data sets in terms of what risks are across local government and the public sector. And secondly, the key point for me here is that the perceptions of corruption and improper conduct can be formed in many ways – employees may have observed it, heard it, suspect it, or know of it in some manner, but in any event, these perceptions are formed. And what we know is perceptions have generally some sort of basis. And what the report tells us there are corruption vulnerabilities in local government and clearly instances where corrupt conduct is occurring. This report is particularly important for senior leaders as it tells senior leaders what the workforces sees as corruption risks and the prevalence of those risks.

INTERVIEWER: Kerry, one thing that struck me from the report was that there seemed to be a divide between how respondents viewed the behaviour of councillors, to that of employees; a perception perhaps that there was one set of rules for one group over another. Did this ring true to you? And just how important it is for elected leaders to set the example and tone for integrity?

KERRY THOMPSON: It did ring very true for me.  We know that all organisations can have excellent policies and procedures and training, but if they are not followed by the leaders – and that’s the elected councillors, they are the leaders and they do set the tone for the organization. They set the tone for the community and they set the tone for their staff. They must make sure they adhere to those good behaviours, good governance, because they are being watched by their staff. If staff see even one councillor behaving badly or not declaring a conflict, of course they will be very, very concerned.

INTERVIEWER: David, respondents believe that senior managers who behave unethically or corruptly tend to get away with it; that they are somehow protected. What can senior executives and middle managers do change this perception? And perhaps more importantly, what can councils do to increase transparency so that people have a clear line of sight in how decisions are made?

DAVID WOLF: that’s a terrific question and it’s a consistent issue that comes up in local government and the public sector in Victoria. The answer is not an easy one. Firstly I’ll say is the integrity system in Victoria has a very strong record in addressing corruption and improper conduct in local government, particularly in respect to senior leaders. And there’s some recent examples of a number of major councils in Victoria where that’s occurred. I see the key issue coming out of this report and survey being about allegations in relation to senior leaders and the perception they are not properly addressed. I often to talk to agencies about how well decisions or outcomes are communicated, particularly internally, and that’s where I think these survey findings are really pointing to. This includes an outcome where perhaps a complaint is communicated to either the complainant, and more broadly to the workforce where it can be, and particularly where the improper conducts has been substantiated – how well that is communicated. I understand the reservations around confidentiality and privacy, but where there’s a lack of information, that breeds a level of suspicion that matters haven’t been taken seriously, or that people haven’t been held to account. So it’s really important that senior leaders, when dealing with issues across local government find that balance between privacy and confidentiality and about being open around how the organisation has dealt with impropriety.  

INTERVIEWER: Many respondents commented that they felt unable to speak up or report unethical or corrupt behaviour. How can employees be better supported to do the right thing?

DAVID WOLF: Really important question and again this comes up often in some of our surveys and the speak up culture is incredibly important. We talk about it consistently, about how it underpins integrity across all sectors. So it’s important firstly that organisations have a system where people can report issues that are of concern, whether that be a anonymously , or by nominating who they are, that the reporting process is confidential and there are processes to ensure complaints or reports will be dealt with and actioned. So it’s important that one, the system is in place, and two the staff have confidence that they can use it be protected and there’ll be an outcome for the issues they’ve raised. And again that comes back to what I was talking about before about proper communication, how internally (where issues arise or are reported), how internally that’s communicated to the workforce. There’s a fantastic example at one council recently where there was a disclosure from a remote workplace around some conduct that was ultimately proven and substantiated to be corrupt. The system dealt with the offender, but they also championed the report across the organisation to demonstrate that it was a good thing that another employee raised concerns with it, and allowed the organisation to deal with it, and of course protect their reputation and the community’s interest. It was a really good example of championing that process and its successes.

INTERVIEWER: Kerry, on the back of these findings, what can the Municipal Association of Victoria do to strengthen a culture of integrity in councils?

KERRY THOMPSON: it’s got so many opportunities and we had council elections late last year and we have over 600 councillors with over 50 per cent being new councillors. So, our role in training is absolutely vital for both councillors and mayors. And that’s ongoing for the next four years for these councillors, so it’s absolutely talking to them about why it’s important, why good governance is important and really working with them. We’ll run forums, workshops, work in collaboration with other organisations to do this. We also provide a confidential service to assist on governance advice, so any councillor can give us a call, or mayor or CEO – they might just want to chat through their issue – and we’ll provide some support. It’s very much about what they can do and what the Act allows them to do. Already we’ve had a number of those phone calls and a lot of the questions are around codes of behaviour, conflict of interest processes. So, we really try and help support them. But what we are also doing is trying to skill them up and build those capacities for them as well. The majority of our councillors want to do the right thing and supporting them and providing frank advice to councillors that also may be frustrated and don’t understand why good governance is absolutely paramount. 

David, how important is it that councils have and maintain proper registries of conflicts of interest?

DAVID WOLF: Incredibly so. In the process of making decisions, transparency around those decisions, transparency around any interest the councillor may have that would impact, or perceive to impact on that decision, and certainly the process to exclude themselves from a vote on a matter where they have a material or general conflict of interest is so important. If I could just follow on from what Kerry was saying, in the new council term, it’s so important that the councils set the tone of how they are going to behave, how they’re going to conduct business and set that community leadership level to where’s it’s expected and I think there are three areas they can really concentrate on. The first part Kerry mentioned is around code of conduct which new councils have just established- that does really set the framework for how they ought to behave with each other and in the decision-making process. The second area, going to what I said before around transparency in decisions – so making decisions in the public view. The less in camera or confidential matters, the better - as I said before, all the things that are done behind closed doors automatically create a level of suspicion . And lastly, I do think that an area of focus would be around housekeeping type of issues, which includes declaring and managing conflicts of interest, but also includes gifts, hospitality, expenses – all the housekeeping type issues that again, if they’re in order, you tend to see the entire business in order. So they’re the areas where I think new councils could really concentrate and focus on.

INTERVIEWER: Kerry, as a former CEO of two local councils, what were some of the challenges you faced in upholding and maintaining a culture integrity?

KERRY THOMPSON: Getting all the councillors on the same page and understanding the importance of it. I think it’s that absolute awareness about why good governance, and processes and integrity is absolutely important and then providing an opportunity to build capacity and for the mayor or really good leadership where there may have been a councillor that didn’t have the same viewpoint about integrity, was struggling with why they had to provide a conflict of interest, for example , it was absolutely trying to make sure you upheld it, and explained to the councillor why – absolutely imperative in what they did. I think the other one for me, and David mentioned it earlier, was about why the decisions that council was making. I think I saw some of the best councillors in action when in the chamber, they could actually explain the background, the process and why the decision was being made and that they council reports would have the actual policies and procedures outlined. I think that’s really important, it gave the community and staff to understand why and how that decision got made.

INTERVIEWER: Thanks so much David and Kerry for quite a robust discussion on perceptions of corruption survey.

That was IBAC Deputy Commissioner David Wolf, and the Municipal Association of Victoria CEO Kerry Thompson discussing what leaders and managers can do to improve integrity in councils.

For more information about corruption risks and vulnerabilities in local government, and to read the report discussed in this podcast, go to www.ibac.vic.gov.au.

The report's full title is, Corruption and integrity: perceptions of Victorian local government employees.