The former managing director of Goulburn Murray Water Pat Lennon claimed reimbursement, to which he was not entitled, for items including household furniture and alcohol, the Victorian Ombudsman has found.
Tabling her Investigation into allegations of improper conduct by officers at GMW, Ombudsman Deborah Glass said her investigation exposed failings with individuals and the systems that supported them.
Ms Glass said Mr Lennon claimed about $40,000 in expenses, while on a $380,000-plus annual salary.
She said his actions, and the approval of claims by former chair Jo Anderson, was inappropriate.
“To a community facing years of hardship because of the drought and the dairy crisis, this conduct seems particularly out of line with public expectations,” Ms Glass said.
Her investigation found that the MD claimed, and the chair approved:
Reimbursement for nearly $20,000 of household assets, including a high-end barbecue, to set up the MD’s Shepparton home after he moved from Melbourne to take up the role.
A ‘living away from home allowance’ which provided him with an $11,000 tax break. The managing director’s ongoing pursuit of this tax break led GMW to spend over $17,000 on legal/accounting fees to determine his eligibility.
More than $21,000 worth of expenses in 13 months for meals and drinks, including alcohol and hotel stays in Melbourne. This was despite GMW’s Board Policy for Director Reimbursement making it clear that “alcohol is not claimable”.
“What may be acceptable behaviour in a corporate environment – ‘you’d claim for everything’, we were told – is simply not acceptable when the shareholders are the public,” Ms Glass said. “Public sector codes, rooted in core public sector values of integrity and accountability, exist for a reason.
“We do not expect our senior officials to be housed, fed and watered on the public purse, on top of a generous salary. We do not expect to pay for relationships to be lubricated by alcohol.”
Ms Glass has made seven recommendations for improvement.
All have been accepted by the relevant authorities.
Her recommendations included:
The GMW board rectify the identified governance issues by developing stronger internal financial controls and policies for personal expenses and reimbursements.
Department of Environment, Land, Water and Planning review the hospitality and related personal expense policies of Victorian water corporations, to ensure public expenditure accords with codes of conduct, government policies, and community expectations.
The Minister for Water require assurance from the board, via reports to the department, of the rectification of governance issues.
The Victorian Public Sector Commission develop induction for incoming board members, chief executive officers and managing directors including instruction on codes of conduct, and the gifts, benefits and hospitality policy.
Goulburn Murray Water chair Diane James has welcomed the release of the, regarding allegations of improper conduct by two officers at the water corporation.
“GMW has already put in place measures to address the issues raised by the Ombudsman and has accepted all of the recommendations made in the report,” Ms James said.
“This includes a review, already underway, into relevant policies and procedures to ensure the issues raised in this report are being addressed.”.
“We have fully cooperated with this investigation which was triggered after a GMW employee raised concerns with the appropriate authorities.
“What has occurred is completely unacceptable and I’m sure the community will be appalled at the findings in the Ombudsman’s report detailing conduct which will be well below community expectations.
Ms James said there were many people in the community doing it tough and they would be rightly outraged by the findings.
She said GMW was seeking legal advice, on how it could recoup any expenses incorrectly approved.
Diane James was appointed Chairman of GMW in August 2018 and Bill Jaboor took over as Interim Managing Director in September 2018.
“Since my arrival I have been absolutely focused on ensuring we have the highest standards of governance and transparency right across the organisation. Victorians deserve better and I am committed to ensuring we can deliver sustainable and affordable services for our customers.”
GMW employees are guided in their activities by the Code of Conduct for Victorian Public Sector Employees. This code values integrity, accountability and respectful conduct at all levels of the organisation.
Today’s release of the Ombudsman’s report is testament to the fact that all GMW employees, no matter their position, are held to these same standards of conduct.
The GMW Board of Directors moved swiftly and decisively in dealing with this matter.