Key corruption risks and enablers

Below are some of the main activities or functions vulnerable to corruption (or perceptions of it) within the local government sector, based on trends and themes in CCC complaints received. Note: This is not an exhaustive list of all activities or work functions which may be vulnerable to fraud and corruption.

Council employees undertake a range of duties and have different responsibilities to mayors and councillors, leading to different risk profiles between employees and elected officials. 

These are impacted by access to information, the level and nature of contact with clients, customers and members of the community, decision-making authority and level of supervision and oversight. 

Key risk areas for council employees include: 

• Human resource management: This includes concerns about supervision and employee relations, recruitment, selection and promotion processes, compliance with employment obligations, timesheet fraud, employees claiming entitlements and allowances they are not eligible to under their employment contracts or not declaring secondary or poly employment. 
• Procurement and management of public assets and resources: Including accounts processing, building management, fleet management, grants administration and procurement. Procurement complaints involve all stages of procurement and contract management and often relate to infrastructure projects, procuring ICT goods and services, and the acquisition of equipment for civil works. 
• Information control and management: This includes the handling and use of confidential information, access to systems and alleged unauthorised or inappropriate release of information. Complaints of this nature frequently relate to council employees improperly accessing internal databases and disclosing confidential information to media, family members, and business associates without appropriate approval or authorisation.
• Service delivery: This includes behaviours relating to the delivery of council services to clients, customers or members of the community, such as inappropriate physical or verbal interactions with or intimidation of community members, alleged unsafe work practices, or not carrying out official duties diligently or with due care.
• Decision-making and financial delegation: The exercising of supervisory, decision-making, and financial delegation may be vulnerable to corruption (or perceptions of it). Because senior executive roles typically entail decision-making responsibilities, involvement in procurement and recruitment processes, and financial delegations that permit them to award contacts and authorise the payment of council funds, these roles may be more vulnerable to corruption risks.

Councillors are drawn from the community they serve. Many have private interests — such as businesses and personal associations — which can heighten conflict of interest risks, particularly in rural and remote areas where a business they own, are involved in or affiliated with may be one of a small number of service providers to the community. 

Key risk areas for mayors and councillors include:

• Political and policy services: This includes participating in council decisions and deliberations they have a conflict of interest in or failing to declare and manage the conflict, influencing or attempting to influence another councillor about decisions relating to develop applications and approvals and zoning, or interfering in decisions, and misusing their position to instruct or direct council employees usually with the intent of benefiting themselves or an associate.
• Human resource management: This includes poorly managed conflicts of interest or interference in employment decisions (such as the recruitment or termination of council employees), the misuse of allowances or entitlements, and matters relating to conduct or discipline, including interfering with or undermining investigations by providing false information, statements or complaints.
• Management of public assets and resources: This includes the misuse or misallocation of council resources or grant administration and funding, awarding tenders or contracts to family members or associates, and issues relating to development/rezoning, such as colluding with contractors to benefit from land sales or rezoning.
• Information control and management: This includes mayors and councillors disclosing confidential and commercially valuable council information advantage them in being awarded council contracts or tenders, misusing confidential council information to benefit their own private interests, or releasing sensitive information to social media or media outlets.

• Conflicts of interest: Failing to declare and appropriately manage conflicts of interest is a common risk for council employees and councillors across all areas of Council operations referred to above, especially in smaller or more remote communities where there are more likely to be personal, family or business associations between employees, councillors, and members of the community. 
• Executive governance: For local government to operate successfully and efficiently there needs to be a professional and workable relationship between the CEO and the mayor and councillors. If this relationship is not effective, it can have a significant impact on the overall operations and performance of the council.
• External infiltration: Organised crime infiltration and foreign interference is an increasing risk due to the sector’s access to sensitive information, such as personal and business details of ratepayers, information about procurement, contracts, tenders and land zoning as well as access to resources and ability to influence property and development decisions. 
• Increasing demand: Demand for local government services and amenities can amplify corruption risks. Growing populations, housing and health shortages and an increasing volume of grant administration and infrastructure projects associated with population and our changing climate, and the pipeline of infrastructure development associated with the 2032 Olympic and Paralympic Games contribute to risks of unmanaged conflicts of interest, failure of duty, fraud, and the misuse of authority or power to gain a benefit or cause a detriment.
• Human resource management: Skill shortages and challenges attracting and retaining suitably qualified and experienced employees, particularly in rural and regional areas of the state can increase corruption risks. This can lead to poor compliance with policies and procedures due to inexperience or poor supervision, along with unmanaged conflicts of interest, misuse of authority, and the misuse of public resources and work time.
• Corporate knowledge loss: Organisational change and staff turnover associated with election cycles can result in the loss of corporate knowledge and contribute to poor organisational culture, risk management and decision-making practices. A related risk can also arise when senior executive officers are terminated, pressured to resign or not have their contracts renewed as a result of reporting suspected wrongdoing or raising concerns about non-compliance with council policies and procedures. In either case, non-disclosure agreements may be used to conceal the reason for separation, and payments made may be over and above their entitlements, often without justification or explanation.
• Legislative gaps: There are gaps in Queensland’s legislative framework that enable corruption. Not having a mechanism to take disciplinary action against former local government employees enables unsuitable individuals to regain employment in this sector. Additionally, the absence of candidate vetting and strong deterrents to prevent candidates from misleading voters increases the risk of unsuitable candidates being elected.

Our experience suggests the risk of corruption in local government can increase as a result of:

• inadequate or non-existent policies, procedures and frameworks to support the governance of high-risk activities, such as managing conflicts of interest, recruitment and selection, payroll, timesheet and leave allowances, procurement and contract management, and grants administration
• poor risk awareness and management, including not having an audit committee to oversee risk management, integrity and fraud and corruption controls
• unclear, or outdated decision-making frameworks and delegation registers leading to confusion or ambiguity about approval processes
• poor recordkeeping practices in relation to decisions, authorisations or approvals, or not having systems for recording decisions and outcomes and managing and declaring interests (such as conflicts of interest and gifts and benefits) 
• insufficient initial and ongoing education of council employees and elected officials about integrity, fraud and corruption risks
• poor supervision, oversight and performance management creating opportunities for wrongdoing to occur or go undetected, such as undeclared secondary employment, the misuse of work time and misuse of public resources.