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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
2020-03-25 Daily Xml
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Coorong District Council

Mr PEDERICK (Hammond) (15:09): I rise to talk on the Auditor-General's Report, Report 4 of 2020, entitled 'Examination of credit card use and management: The Coorong District Council'. At the outset, I declare I am a ratepayer within the Coorong District Council area, and I also represent a large portion of the council area as it falls within my electorate of Hammond. This report examined the use and management of credit cards by the council for the period 1 July 2016 to 30 April 2018. I would like to stress that this period does not fall within the time of the current elected council who were not elected until November 2018.

The common theme throughout the report is the lack of policy and guidance to staff around the use of credit cards by the executive. It was found that council's delegation process and documents were unclear and that the council did not maintain a formal instrument of the chief executive officer's sub-delegations. The effect of this is that the scope and effect of the delegations were unclear, they may not have reflected the council's intention and they may have referred to specific people, not their positions. The Auditor-General also found that the then mayor's financial delegations were not in line with the Local Government Act and were invalid.

The Local Government Act does not allow a chief executive officer to delegate their power to a mayor to spend council money. The mayor at the time, Neville Jaensch, was issued with a credit card with a limit of $5,000 by their then CEO, Vincent Cammell, without any authority under the Local Government Act. The Auditor-General found the mayor reviewed the CEO's transactions and the CEO reviewed the executive members' and the mayor's transactions. This is hardly an independent review, as is normal practice.

The Auditor-General found these reviews to be inadequate because they failed to ensure credit card transactions were supported by adequate or current records to justify their business purpose. He also found that the reviews were not performed by someone who could exercise independent judgement because they had benefitted or could be perceived to have benefitted from the expenditure.

The Auditor-General believes that the then mayor, Neville Jaensch, should not have been involved with the daily operations and affairs of the council as this is the role of the executive staff. The Auditor-General found examples of the business purpose of credit card use not clearly justified at the time the expenditure was incurred. The report found transactions that were not business expenses and not a proper use of public money.

The report found examples of transactions that were not business expenses, including the purchase of alcohol, lunches for offsite meetings between council staff, refreshments for celebratory events, gifts to staff and external parties, and some travel expenditure. The following transactions were some singled out for close inspection as non-business expenses:

$2,213.76 on flights to Canberra for a conference, including the then mayor Neville Jaensch's spouse;

$884.39 on alcohol for three art exhibition openings;

$500 in jewellery store accounts for departing staff;

$389 on an aquarium; and

$317.80 at a hotel.

I find these revelations appalling. The lack of leadership at the Coorong council was becoming apparent to me over a few years. The improper use and misuse of credit cards seems to be only one of the outcomes of poor leadership and management at the council. Numerous constituents coming to me regarding the appalling state of the road network within the council area is but one example. Examples of pierced fuel tanks and damaged cars and trucks were common.

I myself saw the condition of local roads deteriorate around my farm and district. The Coorong council is a rural council with an extensive road network, and farmers and their families rely on these roads for daily transport and, more importantly, to transport their goods to market. I really do believe that councils should concentrate on the three Rs—rates, roads and rubbish.

I am pleased to see in the Auditor-General's Report that the council adopted a new credit card policy in May 2019, for which I commend the current council. I wish the current Coorong council well and commend, in particular, current Mayor Paul Simmons in working through the aftermath of the failings outlined in the Auditor-General's Report.

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