Misuse of public funds by former officers at Goulburn Murray Water

Wednesday 3 October 2018

The former managing director of Goulburn Murray Water claimed - and the former chair approved - 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 Goulburn Murray Water in the Victorian Parliament today, Ombudsman Deborah Glass said her investigation exposed failings with individuals and the systems that support them.

Ms Glass said the conduct of the former managing director, who claimed about $40,000 in expenses while on a $380,000-plus annual salary, and the chair, who approved all the MD’s claims, 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”.

The former managing director ceased employment with GMW in late September 2018, while the former chair resigned in July 2018.

“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:

  • Goulburn Murray 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.

Ms Glass thanked the person who made the protected disclosure (whistleblower) complaint which prompted her investigation, saying this case demonstrated the value of people raising concerns with independent bodies.

She also thanked the following bodies for the assistance and advice they provided to the investigation: Australian Taxation Office, Victorian Public Sector Commission, Department of Premier and Cabinet, Department of Treasury and Finance, and Victorian Auditor-General’s Office.

Read the report here: Investigation into allegations of improper conduct by former officers at Goulburn Murray Water.

Please note: Ms Glass will not be available for interview regarding this investigation, due to its nature and the requirement of parliamentary privilege.

Media contact: Ainslie Gowan | Tel 03 9613 6235 | Mob 0409 936 235 |  ainslie.gowan@ombudsman.vic.gov.au