Victorian audit flags fraud control concerns

The Victorian Auditor General’s Office has handed down its long-awaited report into fraud and corruption controls in the state’s local government bodies.

The audit examined four Victorian councils - Strathbogie, Greater Shepparton, Wellington Shire and Wyndham - in a bid to determine whether or not Victorian councils’ fraud and corruption controls are well designed and operating as intended.

The audit reviewed fraud and corruption controls and measures to assess council practices relating to:

  • councillor and senior staff credit card and fuel card use and reimbursements;

  • identifying and managing conflicts of interest; and

  • responding to suspected incidents of fraud and corruption.

While the report concluded that wilful and systemic corruption is not an issue for the four councils, only one council body fully complied with the state’s legislation.

“While we did not identify instances of fraud or corruption in the transactions we examined, we found examples where controls are failing. These weaknesses provide an environment in which fraud and corruption can occur, potentially go undetected and breach public trust,” the report concluded.

The VAGO report identified ‘gaps in fraud and corruption controls’ at the audited councils, which it warned could foster a culture of fraud and corruption down the line.

“Some individuals in positions of authority need to take a broader view of their obligations. They must appreciate that they are accountable to ratepayers and residents and consider how their communities may perceive their actions,” the report argues.

The full report can be found here

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