Inspectorate announces there will be no Rex report

Inspectorate announces there will be no Rex report

Published on 02 September 2024

Council has been notified today that the Local Government Inspectorate (“LGI”) will not be releasing a report on the Hepburn Hub at The Rex project.

Mayor, Cr Brian Hood, said that it is extremely disappointing that it has taken so long for the Inspectorate to arrive at this decision and that no report will be issued.

“We are frustrated that a comprehensive, detailed report won’t be released. The failure to issue a report into The Rex project denies transparency and accountability and lets down the community, Councillors and Council officers,” said Cr Hood.

The LGI have stated that “The LGI’s investigation has now been finalised and the Chief Municipal Inspector has concluded that there is insufficient evidence to prove to the requisite standard of proof the commission of any disciplinary breaches or criminal offences contrary to the 1989 Act. They have also noted that the “LGI will not be taking any further action in respect of the investigation, nor will the LGI be publishing a report.”

Bradley Thomas, Hepburn Shire Council CEO, said that it was important to note that the Chief Municipal Inspector has concluded that “council has taken remedial action to put in place measures to avoid future complaints of a similar nature, including the creation of a new governance and policy framework.”

“We have significantly improved governance, policies, and the culture in the organisation, implementing systemic change and improvements to ensure that the failures of The Rex project are never repeated again. This should give Councillors, and most importantly the community, confidence as we move forward,” said Mr. Thomas.

Some of the organisational changes put in place since the commencement of the Inspectorate investigation include:

Creation of a Major Projects Team (that does not report to the CEO) Development of a Project Management Framework Updates on high risk/complex projects being provided regularly to the Audit and Risk Committee (the Audit and Risk Committee comprises four independent members) Adoption of a contemporary Risk Management Framework Established a CEO Employment and Remuneration Committee, with external, independent members, along with Councillors Adoption of a new Procurement Policy Development of a Disposal and Acquisition of Land Property Policy that ensures all purchases and sales comply with legislation, and that a current and independent valuation is obtained before Council enters into such arrangements Significant investment in the Governance and Risk Unit to ensure it has appropriately skilled and experienced staff to provide advice and monitor compliance with legislation and governance requirements. 

Interim Chief Executive Officer, Bruce Lucas, paused the Hepburn Hub at The Rex project in June 2018, when becoming concerned about governance failures, also reporting the issue to the Audit and Risk Committee. Incoming Chief Executive Officer, Evan King reported concerns to IBAC, and ultimately the Inspectorate commenced an investigation. 

Councillors, Officers, and the Audit and Risk Committee, have been fully supportive of the reporting, working through the investigation and have repeatedly called for the finalisation of the investigation to occur. The LGI have noted that throughout, Hepburn Shire Council and its Councillors have co-operated in the investigation.

Mayor, Cr Brian Hood, said “Ensuring we have the appropriate checks and balances in place means failures of the past will not be repeated, and having a culture where officers of all levels feel able to raise concerns about governance is vital.”

“Council has been unable to find evidence that an independent, external valuation was completed prior to the purchase of The Rex building, something that is now a requirement due to the adoption of the Disposal and Acquisition of Land Property Policy,” said Mayor Hood.

Mayor, Cr Brian Hood, said that although extremely disappointing that we won’t have a report, we can now endeavor to draw a line in the sand and move forward as an organisation and community.

“I’m pleased this announcement was made before the end of this Council term.  We have a busy couple of weeks ahead of us with the consideration of the next stages of the Future Hepburn project including township structure plans, the financial vision and the last council meeting for the term,” he said.

“Council is progressing a project to assess the feasibility of maximising the community use of the Daylesford Town Hall site, with an option to consolidate and upgrade the building so it could become more of a community hub, and possibly incorporate the Daylesford Library.  This has included the creation of a community-based Project Advisory Group, and also the appointment of a lead architect for the Daylesford Community Facilities Project,” said Cr Hood.

“It is imperative that the Inspectorate has the appropriate powers to investigate failings in Local Government and that it has adequate resourcing into the future, preventing delays such as with this investigation, and ensuring that there is transparency and accountability in the use of ratepayers funds” said Cr Hood.

Enquiries regarding the Local Government Inspectorate investigation process should be directed to the LGI, with contact details and their media release available at https://www.lgi.vic.gov.au.

-ENDS-

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Local Government Inspectorate media release:

Hepburn Shire Council Examination Finalisation The Local Government Inspectorate (LGI) is the dedicated integrity agency for local government in Victoria.  The Chief Municipal Inspector (CMI) leads the LGI and has functions and powers, including those set out in the Local Government Act 2020, to enable the LGI to examine, investigate and prosecute any matter relating to a Council's operations and any potential breaches of the 2020 Act and its predecessor the Local Government Act 1989 (1989 Act). In 2019, the LGI received a complaint that made allegations relating to the Hepburn Shire Council's involvement with the Rex Theatre redevelopment. Since receipt of the complaint, the LGI has undertaken a rigorous investigation of the allegations.  Throughout, Hepburn Shire Council and its Councillors have co‑operated. The LGI's investigation has now been finalised and the CMI has concluded that there is insufficient evidence to prove to the requisite standard of proof the commission of any disciplinary breaches or criminal offences contrary to the 1989 Act.  Further, the CMI is satisfied that the Council has taken remedial action to put in place measures to avoid future complaints of a similar nature, including the creation of a new governance and policy framework. Accordingly, the LGI will not be taking any further action in respect of the investigation.  Nor will the LGI be publishing any report. More information about the LGI can be found at: LGI's website https://www.lgi.vic.gov.au;  The Local Government Act 2020 Governance Resources https://www.localgovernment.vic.gov.au/council-governance/how-we-regulate-councils; The relevant legislation, by searching https://www.legislation.vic.gov.au; and 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. 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 [email protected]

For more information on the Local Government Inspectorate and our work, visit our website