Warning to councillors: avoid misuse of position

In recent years, the LGI has investigated a number of complaints where the councillor group, or an individual councillor, has sought and received legal advice without a resolution of council or through a process that is in line with council’s own legal advice policy. On each occasion, the legal advice sought was in relation to the employment of council’s Chief Executive Officer. The following information is provided to ensure that councillors are aware of their obligations under the Local Government Act.

Published:
Wednesday 7 August 2024 at 2:27 am

Breaches of the Local Government Act (2020) and warning to councillors to avoid misuse of position

  1. It is an indictable offence under the Local Government Act 2020 (Act) for Councillors to intentionally misuse their position or to aid and abet (assist or help) another Councillor to misuse their position.

  2. A person who commits such an offence may be fined up to 600 penalty units (presently $110,952) or imprisoned for up to five years.


    Investigations into misuse of position

  3. The Local Government Inspectorate (LGI) has recently investigated various allegations of misuse of position committed by former and current Councillors in breach of both the Act and its predecessor, the Local Government Act 1989. These allegations relate to:

    3.1 Councillors seeking legal advice purportedly on behalf of the Council but not having obtained a resolution of Council authorising the procurement of legal services;

    3.2 An attempt to misuse Council resources, by seeking to have the Council pay invoices for legal services when those services had not been authorised by Council;

    3.3 Making improper use of information acquired as a result of their position as Councillor, to gain or attempt to gain an advantage; and

    3.4 Participating in a decision with a conflict of interest.

    Councillor obligations

  4. LGI reminds all Councillors that:

    4.1 Councillors must not intentionally misuse their position, including (but not limited to) the following actions:

    (a) Improperly using information acquired in their role as Councillor;

    (b) Disclosing confidential information;

    (c) Directing or improperly influencing a member of Council staff, or seeking to do so;

    (d) Exercising or performing a power, duty or function that is not authorised, or purporting to do so;

    (e) Improperly using public funds or resources, or doing so without authorisation; and/or

    (f) Participating in a decision with a conflict of interest.

    4.2 Councillors are held to a high standard in their roles as democratically elected civic leaders and are required to act with integrity and in the interests of the local community.

    4.3 Misuse of position of any kind is considered an abuse of power and is contrary to good governance.

    4.4 Councillors must perform their role impartially and solely for the public benefit of each municipal district.

    4.5 In addition to the principles for the role set out in section 28 of the Act, Councillors must adhere to the 'Councillors Code of Conduct' developed and adopted by the Council they serve.

    4.6 Specifically in relation to LGI's recent investigations, Councillors have no authority to engage legal services on the Council's behalf or use Council resources, unless:

    (a) There is a Council resolution authorising the procurement of legal advice; or

    (b) A Councillor engages the service through an authorised member of Council staff (such as the CEO); or

    (c) A Councillor obtains and pays for legal advice as a private client of the legal service.

    5. LGI encourages Councillors to familiarise themselves with offences criminalised by the Act. The relevant provisions of the Act are set out in the Annexure.

    Prosecutions

    6. LGI has previously prosecuted Councillors for misuse of position, including where Councillors:

    6.1 Exceeded their authority in agreeing to contractual arrangements without a Council resolution during a CEO appointment process, where the arrangements were favourable to the CEO and exposed the employer to financial risk;[1] and

    6.2 Made improper use of information acquired as a Councillor regarding a proposed rating strategy which was used in submissions to gain a commercial advantage in relation to properties owned personally by the Councillor.[2]

More information

7. More information can be found at:

7.1 LGI's website https://www.lgi.vic.gov.au;

7.2 The Local Government Act 2020 Governance Resources https://www.localgovernment.vic.gov.au/council-governance/how-we-regulate-councils;

7.3 The Act, by searching https://www.legislation.vic.gov.au; and

7.4 The Municipal Association of Victoria's website https://www.mav.asn.au/what-we-do/procurement/resources-hub/for-councils. General inquiries may be made to (03) 9667 5555.

8. Should you wish to discuss the issues raised in this media release, please contact:

Local Government Inspectorate
Level 27, 1 Spring Street, Melbourne, VIC 3000
1800 469 359
inspectorate@lgi.vic.gov.au


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