CCC warns of council corruption

Daniel Emerson
Systemic weakness: The CCC says councils vulnerable to rorting by employees, suppliers and contractors. Picture: The West Australian

Local government is set for a dramatic external intervention into financial affairs after a corruption report warned councils were routinely open to rorting because of weak governance.

Local Government Minister Tony Simpson said a Corruption and Crime Commission report into local government procurement risks was "a wake-up call". He backed its central recommendation to expand the Auditor-General's remit to cover WA's 140 councils.

The CCC report, tabled yesterday, declared six previous investigations into corruption at councils established a "systemic weakness" that made the sector vulnerable to rorting by employees, suppliers and contractors.

External audits by accountants RSM Bird Cameron of five cities - Joondalup, Cockburn, Perth, Swan and Wanneroo - revealed they had not assessed their specific fraud and misconduct risks, despite being big businesses. Perth's 30 councils controlled almost $11 billion in assets in 2010-11 and had more than 9000 full-time equivalent staff.

The report said the broad concerns were that the procurement and financial processes WA local governments used could leave them vulnerable to fraud, corruption and other misconduct.

A spokeswoman for Mr Simpson said the proposal to extend the Auditor-General's role to local government had merit and he would recommend it to the Government.

WA Local Government Association president Troy Pickard said of the 13,408 allegations of misconduct and corruption the CCC received in the past two years, just 618 related to councils, while between 11,353 and 12,691 were against State Government agencies.

The comment appeared directed at a claim by Premier Colin Barnett this month that most corruption in WA was in local government.

Opposition Leader Mark McGowan said expanding the Auditor-General's responsibilities to local government had to come with an increase in the office's funding.

"I would hate to see the Auditor- General take his focus off the State Government," he said.