MOIRA Council is under pressure to resurrect a stalled external probity audit after a confidential internal report revealed 42 potential breaches of the Local Government Act.
The breaches relate to payments above $150,000 made by the council that were not subject to a tender process.
They were exposed in an audit of contracts management between July 2011 and December last year.
The report’s authors, AFS & Associates, concluded: “We identified 42 potential breaches out of the 65 aggregated payments tested.
“The identified breaches extended across both contracted and uncontracted suppliers where the uncontracted aggregated spending was in excess of the $150,000 threshold specified in The Act.
“Although not our primary objective, we also identified further opportunities for improvement within the procurement and contract management function.”
The revelation comes after the external probity of council’s finances and operations — unanimously agreed to by councillors — was shelved on legal advice in early March.
The legal advice highlighted shortcomings in the council’s procurement process in selecting the probity auditor — Albury firm Rob Salisbury & Associates — for $60,000.
But the external probity audit remains as an active council resolution.
The report said the causes of the 42 breaches related to the lack of det-ection controls to identify creeping aggregated spend; non-centralised procurement and direct oversight; and lack of structured procedure aligned to best practice.
It also highlighted nine suppliers paid more than their contracted amounts between July 2011 and January this year.
Two were paid $1.7 million and $1.5 million more and another received more than double the contracted amount of $104,877.
The total exceeded was almost $6 million.
The report identified where a recommendation to stop engaging a contractor was overruled and a contract extended.
AFS & Associates att-ributed the exceeding of contract payments to weak payment approval and monitoring controls and an idle approach to seeking better value.
The report also identified more than half the suppliers with an aggregate spend of more than $150,000 didn’t have a contract in place for the two years from July 2011.
Moira mayor Peter Mansfield declined to comment yesterday.
Former council chief financial officer Adrian Pawar said the report was further vindication of concerns he raised with ex-local government minister Jeanette Powell last year.
“An independent probity audit is the only way the true picture of what is happening at Moira Council can be brought to light,” he said.
“The community must demand that council have the courage to make it happen.”