COUNCIL FAILS PUB TEST OVER CARD PURCHASES
A WA Auditor-General investigation has identified $4.5 million in credit card and store card spending at six councils including Fremantle, Cockburn and Melville.
Perth, Subiaco and Victoria Park also have been snared in the ‘living it up crisis’ in which ratepayer money between October 2023 to September 2024 was splashed on champagne, oysters, cases of wine and spirits, $1000-plus dinners, travel and gifts for partners of retiring elected members.
Card purchases must meet a legitimate authorised business need and community expectations around the responsible use of public money, according to auditors: “Improper, wasteful or unauthorised purchases that are not identified and resolved result in financial loss to the entity.”
Auditor General Caroline Spencer said no evidence of misuse was found, “in part because without clear policies and guidance, we had no benchmark to assess purchases against”.
She said the councils had varying controls in place to manage purchasing cards, “but did not clearly state what they considered allowable and reasonable business expenditure. In a climate where cost of living is a significant concern, we questioned if some purchases are in line with community expectations of responsible use of public money”.
The investigation whose report was tabled in Parliament on May 28 found gaps and weaknesses in all areas of purchasing card management that increase the likelihood of cards being inadvertently or deliberately misused. None of the councils had clearly stated for staff what they considered allowable and reasonable business expenditure.
Money, it’s a gas
AUDITORS have not identified the case study examples but warned councils will be named if a similar audit was conducted again, “to promote accountability and transparency to ratepayers”.
Examples included one council having spent $1026 on dinner for an elected member and staff which included three bottles of wine at $70 each: “It is the entity’s practice to go out to dinner after meetings once a month to support local businesses in the area.”
A review of card purchases at Fremantle confirm this except the City far from supporting local businesses is blatantly selective over where staff and elected members wine and dine. Little Sister, Little Loaf Lunch Bar, Grill’d, Benny’s Bar & Cafe, Norfolk Hotel, Culley’s and Roll’d Freo featured frequently in credit card purchases.
Many of the purchases also were made online and in neighbouring Cockburn, Perth and the eastern states during council ‘business’ trips.
Transactions included $116.57 on a finance committee dinner; $400 on gelato and $332 on a fruit platter in September 2023. In October the same year, two separate transactions of $400 and $308 on waffles; $400 gourmet snacks; and $193.69 Uber Eats to cater for election day staff.
In December, $933 at Sandrino Cafe & Pizzeria; $450 Little Sister; $690 Guru Brothers supermarket; and $1848 on Sticky tickets for eight elected members and guests.
In January 2024, $281.80 on an informal elected member meeting dinner; $182.25 Norfolk Hotel; $846 Culley’s; and $427.76 at Dan Murphy’s.
In February, $206 on an informal elected member meeting dinner; $311 at Culley’s; $202 at Benny’s; three transactions of $185, $145 and $165 at Roll’d; and three transactions of $382.50, $278 and $485.45 at Dan Murphy’s.
In April, $557.50 at Benny’s; $339 at Norfolk; six transactions totally $700 for gelato and coffee; and $412.20 at Dan Murphy’s.
In July, two transactions of $459 and $229.50 at Hougoument Hotel; $430.70 Miss Maud Perth; and $390.50 at H&C Urban Winery. In August, $453.60 at Little Loaf; $930.76 Norfolk and two transactions of $961.10 and $411.65 at Roll’d.
In September 2024, $240 at Emily Taylor; $529.10 at Roll’d; three transactions totalling $1996 at Culley’s; two transactions of $940 and $259.38 Dan Murphy’s; $119.76 Hamilton Hill Bakery; and four transactions totalling $645.98 on Domino’s pizza between August 30 and September 20.
The 25-page Auditor-General’s report said Fremantle spent on its 34 credit cards nearly twice ($590,522) what Perth spent on its 29 cards ($358,917) during the 12-month investigation period.
Fremantle made 3200 transactions compared to 1890 at Perth and 1993 at Victoria Park, which had 49 cards. Cockburn spent $1,288,605 using 140 cards and Melville $1,288,040 using 102 cards. Subiaco spent only $199,882 on its 11 cards.
The report found general retail expenses such as industrial and construction supplies, office supplies and printing accounted for the most spending, the six councils forking out a combined total of about $1.8m. The rest is food and booze.
It said none of the councils fully complied with their own policy and procedures including at Fremantle where purchases were not reviewed and approved within their own specified time frames or where time frames were not set: “One purchase was not approved for 208 days.”
The City also did not include required information such as, “the purpose of providing entertainment or hospitality or the number of employees attending”.
Councils said they would implement the report recommendations.
