FREMANTLE COUNCIL EXPOSED TO FRAUD AND CORRUPTION

AUDITOR’S REPORT STATES CITY HAS NO ANTI-CORRUPTION FRAMEWORK: SECRET MEETINGS ARE CAUSE FOR CONCERN

In an extensive report delivered to Fremantle Council the City’s auditors have revealed:

‘The City has no Fraud and Corruption Framework, there is no Fraud and Corruption Prevention Policy nor Procedures’.

The auditors, Paxon Group Pty Ltd, describe themselves as specialists in aspects of urban renewal, development feasibility and the structuring of joint ventures between public and private entities. 

 Paxon Group also reported that the City has no Fraud Prevention Officer.

The audit reveals:

‘Purchase orders have been raised after expenditure’ and ‘Invoices have not been approved by authorised personnel’.

Paxon’s note that issues related to the delegation of authority have “been actioned”.

WARNINGS GIVEN IN 2015  :  REQUIRED TRAINING NOT IMPLEMENTED

Paxon’s findings reveal the lack of Risk Management Analysis dates prior to 2015. They say that under a previous Regulation 17 report of 2015:

“ . . . risk analysis was new to the City and required further refinement and training scheduled for 2015. This did not take place”.

(Links to the auditor’s information published in Council’s agenda and minutes are at the end of this article)

COUNCILLORS MUST HAVE ACCESS TO CONTRACTS  :  MAY HAVE NO LEGAL PROTECTION.

Fremantle is increasingly favoured by developers and at least one, Sirona Capital, has been described in court documents as having questionable professional ethics.

If councillors did not receive advice related to aspects of fraud and corruption they may have a defense against future legal action associated with the financial failure of projects, especially if councillors have not been given full details of projects’ contracts. 

Fremantle Backchat understands councillors have not had access to contracts. Therefore they cannot understand the implications.

Not requesting access to contracts may indicate a lack of due diligence which could expose individuals to legal action in the event of financial or other failures of projects.

By understanding contracts fully, if necessary consulting independent legal advice, councillors would be in a position to question the administration and clarify any doubts they may have. Due diligence may help protect elected members from legal actions and advise the administration to refrain from imprudent management practices. They may also protect ratepayers from costly misinterpretations.

REQUEST FOR CONTRACT IGNORED  :  COUNCIL SECRECY IS CAUSE FOR CONCERN

Lack of transparency within the Council’s administration is palpable. The administrator’s findings cast doubt on past and current administrations and their procedures. The findings should prompt councillors to ensure legal protection which may be assisted by having a  full understanding. of contracts

Fremantle Backchat has written to the City’s CEO, Philip St John, requesting a copy of the contract between the City and Sirona Capital so that it may be independently examined in the interests of Fremantle ratepayers who are repeatedly described as partners with Sirona Capital in the redevelopment of King’s Square. He has not replied.

SECRET DISCUSSION OF  CASH FLOW BY AUDIT AND RISK MANAGEMENT COMMITTEE

Underlining the Council’s lack of transparency a meeting of the Audit and Risk Management Committee was held in camera to discuss the Kings Square Civic Building Cash Flow Summary. The meeting was on 14th May 2019. In some circumstances Government legislation does allow council business to be closed to the public. 

The council has recently contracted Pindan and concerns have been raised that the contract may not have a fixed price. That is not uncommon but ratepayers have been given details of costs which appear to be fixed.

If contracts are not fixed price there may be concerns that substantial increases in construction and fit-out costs can be expected.

Fremantle’s ratepayers who are financial partners in the development of  Kings Square should have considerable cause for concern that contracts and related financial matters which are shrouded in secrecy are not available for inspection.

NOTE: For detailed information related to the auditor’s report refer to these links:

Agenda:<https://www.fremantle.wa.gov.au/sites/default/files/Agenda%20-%20Ordinary%20Meeting%20of%20Council%20-%2022%20May%202019.pdf>Starting on pp95

Minutes:<https://www.fremantle.wa.gov.au/sites/default/files/Minutes%20-%20Ordinary%20Meeting%20of%20Council%20-%2022%20May%202019.pdf>Starting on pp111

Roger Garwood, Editor, Fremantle Backchat; <editorbackchat@gmail.com>