Carol Altmann – The Terrier
Just a week after the Warrnambool City Council voted to increase rates by 4.5%, I can reveal that ratepayers have footed the bill for thousands of dollars spent on dozens of dinners, lunches and breakfasts racked up on just one corporate credit card, by one council manager.
Freedom of Information documents show the council signed off on at least $6800 in meals, including dishes of eye fillet, seafood linguine, pork belly, softshell crab and tapas plates, paid for with a corporate credit card used by WCC Manager Visitor Economy David McMahon.
This credit card recorded more than $40,000 in spending for the 18 months from February 2017 to the end of October last year, which is when I lodged the FOI. The FOI finally came through in early June.
It shows the corporate credit card was used to cover food and drinks at meetings, gatherings, get-togethers and other social occasions that occurred with eye-popping regularity.
The local venues for these outings have been many and varied and include the Hotel Warrnambool, Graze, Hairy Goat, Fishtales, The Pavilion, Bojangles, Simon’s Waterfront, Mid-City Motel and the Main Beach Kiosk, with the bill often costing more than $150 at a time.
To be clear, Mr McMahon, who is based at Flagstaff Hill, was not spending this money only on himself.
The total credit card bill of more than $40,000 covers a broad range of expenses, from $20 car washes, to groceries bought at service stations, to hardware, a $470 helicopter ride as a competition prize, $434 to hire a function room at the Lady Bay Resort, right up to thousands spent on accommodation and travel.
Receipt for a breakfast meeting held at the Mid City Motel in May last year at a cost of more than $160.Much of this spending may be perfectly legitimate in the course of conducting normal council business, but for this first story – this is the first of a series – I am focusing on the incessant eating and drinking, which, the council argues, is all part of the job.
Let me give you a few examples, from just one month, May 2018. (You can see the full list at the end of this piece).
On 17 May last year, Mr McMahon’s card was used to pay for a breakfast meeting at the Midcity hotel at a cost of $161.30.
The next day, the card was used for breakfast at Fishtales for $97.10.
A week later, on 27 May, another $57.90 was spent on breakfast at Fishtales and $13.50 at the Main beach kiosk.
Four days after this, on 31 May, another $172.50 was spent on “meals” at Bojangles.
And that is just for May 2018.
Dinner at the Hotel Warrnambool, May 2017, at a cost of $173.If we wind back to 12 May 2017, we find $173 was spent at Hotel Warrnambool on a dinner that included dishes of eye fillet, pork belly and seafood linguine.
Less than a month later, on 1 June 2017, another $213.60 was spent on more meals at the Hotel Warrnambool that included more dishes of eye fillet, seafood linguine and soft shell crab.
Swing into July 2017 and you will find a neat $546 spent on share plates and tapas at The Hairy Goat on 8 July.
A few weeks later, on 14 August, another $314.50 was spent at the same place, on more share plates and tapas.
Bang, there goes another $1200, and we have no idea why, because the council has provided no details.
And then there are the coffees, the endless coffees: $20 here, $15 there, $48 and $56 other times, and on it goes as ratepayers pick up the tab for coffees on a regular basis.
For example, in March this year, more than $64.20 was spent on coffees in just one day, from two different locations: the Espresso Mobile Café and at Rough Diamond.
You get the picture.
But there is more, because this is not a complete picture.
The credit card statements released exclude a number of transactions removed by the council because they deemed them “not relevant” as someone repaid them.
The council won’t reveal who made these repayments, for which transactions, and why, but I have good information to suggest the total repayments were between $5000-$6000.
This means a further $5000-6000 was spent on this card that should not have been.
Missing: the cost of meals and drinks consumed at a tourism conference last year have been removed from the credit card documents released under FOI.I can also say that at least one of these missing transactions is for more than $1000 spent on food and drinks at the Cape Schanck RACV resort during a tourism conference last July, which I wrote about earlier this year and which prompted this deeper investigation.
So that’s thousands in spending on meals we know about, and thousands more that was repaid and is now considered secret.
The fact that this sort of thing is going when ratepayers are being asked to pay more because of “tough times” is disgraceful.
And remember that this FOI covers just one credit card, for one council staff member.
There are 81 corporate credit cards in circulation at WCC (elected councillors don’t receive cards).
It is also important to remember that we are not talking about spending by a private business. This is local government, which means this is public money, your money and for which every cent must be accountable.
Receipt for another dinner at the Hotel Warrnambool in June 2017, at a cost of $213.So who was scrutinising Mr McMahon’s credit card transactions?
The council won’t say exactly, but confirms it must be a line manager, so I would assume this means Mr McMahon’s manager, Director City Growth Andrew Paton, must have signed off on the eye fillets and grazing plates and endless breakfasts and coffees, and considered it all perfectly okay.
Such is the culture that has been allowed to develop within the upper echelons of council over the last decade – a culture of entitlement, with very little public scrutiny.
It is this culture that most ratepayers hoped would end under the new CEO Peter Schneider.
To be honest, I thought that when this FOI came to light, Mr Schneider and the council would rush to explain that these days of excess were long gone, but I was completely wrong.
Instead, the responses to my first questions were a big bowl of corporate, alphabet gloop.
Here is one spoonful, given in answer to one very simple question “how is this justified to ratepayers?”:
“Each authorized (sic) holder of a corporate credit card will perform different roles requiring different stakeholders, different working hours and locations, and therefore different costs of doing business. Some roles may require extensive engagement with business and industry, volunteers, residents, regional engagement and statewide engagement, other roles may not.
“The use of credit cards as a payment mechanism can be of considerable benefit to the Council, ratepayers and the various individuals and organisations that supply goods and services. The benefits are in the form of efficient procurement and reduced administration costs.”
You get the picture. (Read the full Q and A to my first batch of questions here).
As it happens, the Victorian Auditor General’s Office has just released a report about the potential for corruption and fraud around council corporate credit cards, particularly on spending for meals, travel and petrol. The council says it is taking notice of the recommendations.
I will be writing much more on this particular credit card because there is so much more to tell.
The next instalment is coming soon. In the meantime, here is the full list of dining to digest. See below.
[Thankyou so very much to those who have supported The Terrier with a contribution to the Tip Jar: this story is the Tip Jar at work. You can be part of it here.]
March 2017
21.2.17 Pavilion $18.30
May 2017
3.5.17 Fishtales $18.00
12.5.17 Warrnambool Hotel $173.00
23.5.17 Bottega Toscana $7.60
25.5.17 Zambrero Warrnambool $11.90
June 2017
1.6.17 Hotel Warrnambool $213.60
7.6.17 Pavilion $10.00
7.6.17 Pavilion $29.00
8.6.17 Warrnambool Hotel $63.00
21.10.17 Café Lava $10.00
26.6.17 Figsellers café $27.60
26.6.17 Wines Patisserie $26.20
26.6.17 Fishtales $14.00
27.6.17 Wines Patisserie $27.00
27.6.17 Wines Patisserie $12.00
30.6.17 Coffee Treat $28.70
30.6.17 Lady Bay Resort $188.40
July 2017
1.7.17 Graze $78.50
1.7.17 Fishtales $10.20
2.7.17 Fishtales $42.30
3.7.17 Curly’s Pizza $26.80
8.7.17 Coffee Treat $38.20
4.7.17 Pinky’s Pizza Ribs $32.70
4.7.17 Pinky’s Pizza Ribs $9.80
4.7.17 Coffee Treat $38.20
5.7.17 Coffee Treat $20.20
5.7.17 Coffee Treat $32.20
7.7.17 Coffee Treat $20.20
8.7.17 Seanchai Irish Pub $48.10
8.7.17 The Hairy Goat $546.00
8.7.17 Brown’s Depot Bakery $41.00
9.7.17 Cactus Jam $40.00
9.7.17 McDonald’s $18.60
10.7.17 Fishtales $22.20
14.7.17 Bottega Toscana $35.30
19.7.17 Two Tarts Baking $139.00
August 2017
4.8.17 Hoppy’s Café $19.20
7.8.17 Fishtales $20.00
14.8.17 Hairy Goat $314.50
Sept 2017
21.9.17 Pavilion $79.00
21.9.17 Pavilion $4.00
22.9.17 Brightbird $18.40
22.9.17 Fishtales $33.70
October 2017
4.10.17 Fishtales $80.80
26.10.17 Pavilion $165.50
November 2017
1.11.17 Hotel Warrnambool $202.00
3.11.17 Espresso van F/Hill $56.00
4.11.17 Red Spoon Thai $49.80
6.11.17 Espresso van F/Hill $17.00
28.11.17 Rafferty’s Tavern $233.20
28.11.17 Rafferty’s Tavern $36.10
December 2017
15.12.17 Pavilion $106.50
21.12.17 Main Beach Kiosk $154.00
26.12.17 Main Beach Kiosk $45.00
January 2018
3.1.18 Pavilion $51.00
6.1.18 Fishtales $13.80
9.1.18 Pavilion $185.00
12.1.18 Pavilion $80.50
13.1.18 Fishtales $19.50
17.1.18 Brightbird $48.60
24.1.18 Espresso van F/Hill $33.00
25.1.18 Simon’s Waterfront $26.50
February 2018
03.02.18 Maritime $175.00
15.02.18 Maritime $102.00
28.02.18 Graze $21.90
March 2018
01.03.18 Fishtales $45.00
06.03.18 Fishtales $24.00
07.03.18 Espresso van F/H $48.00
08.03.18 Rough Diamond $48.00
10.03.18 Figsellers $60.00
15.03.18 Brightbird $133.00
23,03.18 Fishtales $12.00
April 2018
15.04.18 Coffee Treat $35.00
17.04.18 Pavilion $50.00
26.04.18 Fishtales $9.00
May 2018
08.05.18 Graze $60.00
09.05.18 Figsellers $9.20
15.05.18 Figsellers $24.60
17.05.18 Mid City $161.30
18.05.18 Fishtales $97.10
27.05.18 Fishtales $57.90
27.05.18 Main Beach kiosk $13.50
30.05.18 Coffee Treat $13.50
31.05.18 BoJangles $172.50
June 2018
27.06.18 Coffee Treat $12.00
27.06.18 Whalers $614.00
July 2018
04.07.18 Fishtales $32.90
06.07.18 Brightbird $37.60
19.07.18 Bightbird $112.00
24.07.18 Pavilion $10.00
August 2018
01.08.18 BoJangles $164.00
02.08.18 Brightbird $74.60
17.08.18 Graze $26.80
September 2018
24.09.18 Fishtales $18.00
26.09.18 Pavilion $53.40
27.09.18 Browns Bakery $125.00
October 2018
05.10.18 Graze $19.20
08.10.18 Fishtales $22.00
16.10.18 Graze $55.60
30.10.18 Graze $9.60
Total: $6845.70
So disappointing. I no longer live in wbool but this story is unfortunately not even shocking. Just terribly, sadly disappointing. Snouts in a trough. And none of them realise that the $40k blown on this card for food, coffee, entertainment, would equate to 2 years of wages in my current job. The expectation of entitlement in this council is sadly replicated in every level of government all the way to the top, regardless of political affiliation. I feel sad for the citizens of Warrnambool.
A great piece of digging Carol. You’re doing the proper journalism that The Standard should be doing.
Exactly!!!
One of the problems here is a matter of standards. That is, who sets the standard of what is acceptable expenditure and what is not. That person, almost invariably, has the role of policing this standard. In my experience, that person is one who also benefits from (in this case) the use of a corporate credit card. I also wonder if these repaid expenditures were repaid after a routine review of expenditure or because that expenditure was about to become public knowledge.
I am going to answer the last bit of this question, Jim, by saying I suspect it was both: a review and knowledge that the FOI had been lodged.
Think you need to do some deeper analysis on why these costs were incurred. Example. Hairy Goat and Seanchai, both 8/7/17 on a Saturday night, need deeper scrutiny. Why? At face value there is no conceivable reason why a public sector employee would be eating out on a Saturday night for business purposes. It’s potentially appalling behaviour – behaviour that may have been acceptable in the past but not in 2019. A quick google search revealed this was the last time fun’4’kids was ran. Perhaps this night on the public purse was their send off. Or was it catering for an official function in which case maybe the expenditure is legit? What this says is the dates, dollars, and business name in isolation don’t tell the story. We need to know why the costs were incurred. It’s the why that will determine if the cost is justified or nor. Another example. Pizza on 4/7/17 could be for fun’4’kids volunteers.
Thanks for the comment Anonymous and you are absolutely right – every single one of the meal transactions on these credit card statements deserves an explanation and I am hoping the WCC will provide just that. As mentioned, of course some of this spending is absolutely legitimate in the course of normal council business, but as to which bits fall into that category, it is hard to know. I do know, however, that the F4K sendoff was at The Whalers, not the Hairy Goat.
Very disappointing. There are so many people in Warrnambool living on the poverty line. Many elderly cannot afford to use their heating. Families and even businesses are struggling. I am ashamed of how council is behaving and what they have done and continue to do to Warrnambool. Well done on taking a stand and reporting these unnecessary extravagance within in our council. Surely someone is going to investigate this corruption
Years ago SWTAFE withdrew credit cards given to senior staff due to the inability to monitor responsible spending (I was a manager at the time).
To the best of my knowledge most middle level CFA staff recently had their cards withdrawn for the same reason.
The cards were to simplify the old petty cash system, but temptation was too much in some cases!
Why would there need to be a spend on 26.12.17 (boxing day) at Main Beach Kiosk for $45.00. According to the councils own website this date was in Christmas closure period. https://www.warrnambool.vic.gov.au/news/council-closure-dates-2017-2018-holiday-period
Something is just not right. All these transactions (make that all credit card transactions) need to be forensically reviewed. Perhaps the new CEO needs to commission an audit. Perhaps IBAC needs to be informed. Somebody do something.
One of a string of questions that are yet to be answered. I, too, believe a much closer inspection of all of this spending is absolutely warranted.
I don’t have any association with the council however I do know for a fact this one was for coffees for all the cleaners in caravan parks etc working under the councils direction, just as a thankyou so to speak for actually working on a public holiday. I agree it does look suspicious, which several do, but this one I can say is legit!
Thanks for this explanation and that sounds fair enough! It would be great if such detail was provided by council in the first place and there would be no need for any concern.
A thank you! Hang on a minute! Last time I looked that’s why you get paid. Again. This is the public sector not a charity nor the private sector. Needless to say the staff working on a public holiday would have been rewarded as such. Just use the tea/staff room like most other employees. This may be a heartless position to take but we’re talking about public money and community expectations. Particularly given the council is crying so poor – every cent counts. Their behavior needs to reflect the financial reality of the organization. And it doesn’t. You can’t ask the government to approve higher rates and continue to behave in a manner that’s suggest you don’t need it. The two don’t reconcile.
As much as it was a lovely gesture, it still shouldn’t be paid for by the ratepayer. Many local ratepayers also work public holidays. If the manager / council wanted to make such a gesture, it should be from their own pocket.
I find it funny that all these restaurants are connected by friendships ect fishtales, bojangles, hotel warrnambool, whalers, pavilion… all the owners/ council members have their fingers in two many pies.