A council in Melbourne’s booming outer south-west has been referred to the state’s anti-corruption watchdog over a failed IT project worth tens of millions of dollars.
The issue emerged when representatives from Wyndham City Council faced a fiery parliamentary committee hearing into fraud and corruption controls in local government.
Labor’s MP for Point Cook, Mat Hilakari, questioned whether the council did enough to inform ratepayers about the cost blowout, which he put at $69 million.
But the council defended its transparency, saying information about the project was publicly available.
Computer cost blowout
In 2018, the council appointed tech company Oracle Australia to provide software that could combine council functions on one platform.
It was supposed to be a $20 million project, taking two years.
But four years later, the project was running nearly $20 million over budget. So the council terminated the contract and engaged a new company, TechnologyOne, to do the work.
Wyndham council is located in one of Melbourne’s fastest growing corridors. (ABC News)
Mr Hilakari told the inquiry he estimated the cost blowout for the entire project at nearly $70 million.
“I would put it at probably around $69 million in overruns, and this hasn’t been publicly disclosed until this point in time, is that right?” he asked.
The council’s chief executive, Stephen Wall, said he would take the issue of the cost on notice.
“But that sounds excessive,” he said.
Questions around transparency
Mr Hilakari asked why the failure of the original project, and the cost overrun, had not been communicated to ratepayers.
Mat Hilakari has asked the council why it did not disclose the cost overrun of its IT project to ratepayers. (ABC News)
“Whose decision is it not to disclose these things to the public?” he asked.
Wyndham Deputy Mayor Josh Gilligan said financial decisions were all available, but said no-one had asked about them.
“I just take particular umbrage with the question that suggests that we were not or were somehow not wanting to disclose cost variation to a major project,” he said.
“I just completely dispute that.”
Mr Wall agreed.
“All of council’s financial transactions are transparent,” he said.
The ABC understands another Wyndham councillor, Robert Szatkowski, has made a referral to Victoria’s Independent Broad-based Anti-corruption Commission, IBAC, for matters that relate to the IT project.
The ABC has contacted IBAC for comment. A referral to IBAC does not mean it will launch an investigation and the ABC is not suggesting that a referral implies any findings of wrongdoing.
Councillor pushes back on state government blowouts
Councillor Gilligan pointed out to Mr Hilakari that the state government was also facing cost blowouts on various projects.
Representatives from Wyndham City Council have faced a fiery parliamentary committee hearing. (ABC News: Danielle Bonica)
“You would agree that cost overruns on a state level of hundreds of millions of dollars occur, on the regular?” he asked.
“And we’re very transparent about that,” Mr Hilakari said.
“As we are,” Cr Gilligan insisted.
“Well then you’d better tell me where the project fail of Oracle and the tens and tens of millions of dollars of ratepayer funds that were flushed down the toilet to be frank, where was that publicly disclosed?”
Mr Wall said he would take that on notice, but said there was a clear business case and a tender process, and that the current IT project was a success.
Questions over Point Cook money
Wyndham council is facing backlash for diverting funds from developers in Point Cook to be used elsewhere in the municipality.
Cr Gilligan told the hearing the council had a prerogative to spend money raised from Point Cook developments in another location.
The council has the choice to spend money from Point Cook developments in other locations, a councillor has said. (ABC News)
“That money can be spent in a location that is different to the one that you want it spent in,” he said.
“That is our prerogative, just as state and federal governments have their own prerogative within the realm of law to make decisions, this council has made a decision to look at spending it on an intergenerational project somewhere else.”
The committee is due to table its full report in November.