DOUGLAS Shire Council chief Scott Osman has warned there could be disciplinary action after the Queensland Audit Office (QAO) discovered contracts awarded to former employees, costs that tripled without explanation, untested suppliers and millions of dollars spent without proper paperwork.
Most of the contracts involving more than $160 million were funded by the Queensland Reconstruction Authority (QRA) after Tropical Cyclone Jasper two years ago. The QRA is now reviewing the audit findings.
Mr Osman told last week’s council meeting that the discoveries were in retrospect.
“The findings here, I see, it’s not great on paper, but I see them as a positive and clearly shows transparency that the council officers are trying to put forward to the new council,” he said.
“The majority of these findings were initial engagements related to TC Jasper.”
Mr Osman said council officers identified the “procurement deficiencies” prior to the audit.
“The team had identified these procurement deficiencies prior to the audit and I’ll continue to keep bringing these forward, as can be demonstrated by the report that came to council on the 29th of July, and item 7.14, that is in today’s agenda as well.”
“During that audit, I think this clearly shows examples of why you, as a new council last year, decided to bring in a new CEO and a new executive to actually try and work through some of these issues and move our council into a better position,” he said.
“So, we will continue that review into our activities as we’re going forward and any appropriate disciplinary action will be taken if that is appropriate when we can undertake when we finalise the review.”
In one example mentioned by the QAO audit, a former employee’s company was handed a short-term contract until March 2025 but was the only one invited to bid and the tender was left open for just four days. The ex-council worker was paid triple their former wage.
A different contract was also advertised at between $500,000 and $1 million, before it rose to $2.8 million with no explanation on record.
Council issued a statement after the meeting which said it “takes these matters extremely seriously”.
Mayor Lisa Scomazzon and councillors had “reaffirmed their confidence in the CEO and executive leadership team, commending them on tackling historical issues and also noting the hard work will continue”.
A Queensland Reconstruction Authority spokeswoman said in order to be eligible for funding under the joint commonwealth-state Disaster Recovery Funding Arrangements (DRFA), councils were required to certify that they had complied with all applicable procurement processes – “and we expect all councils to act with the highest financial integrity”.
“QRA is reviewing the Douglas Shire QAO report and its findings and will engage with the council to understand the extent to which the matters raised relate to projects delivered with grant funding administered by QRA,” she said.
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