The most widely read article in the Wombat Post last week was about the “Rethink the Rex” meeting this coming Tuesday. Clearly the community is invested in the fate of this iconic building.
Some commentators on social media have called on Council to release the Inspectorate report into the Hepburn Hub at the Rex project. These calls are misdirected because it is the Local Government Inspectorate (LGI) which is holding back the report, not the Shire Council. Indeed, Councillors have been calling for the release of the report and Council officers regularly contact the LGI about its release.
An audit of the project was commenced by the LGI early in 2019 following concerns within council about rising costs.
The purchase of the Rex building was recommended to Council in July 2016 by then CEO, Aaron van Egmond. A decision to purchase the building was made the following month.
Mr van Egmond abruptly left the Shire Council on June 1, 2018 to take up a position as CEO of Hobsons Bay Council. He is currently on six months leave from that position.
In June 2018, the Shire Audit and Risk Committee recommended to Council that an internal audit be commenced on the Rex construction. Later that same month, work on the Hepburn Hub at the Rex project was abruptly halted by Interim CEO, Bruce Lucas, due to the requirement for a Planning Permit.
On the basis of the internal audit, a forensic audit of the project by Crowe Horwath was commissioned in August 2018. A senior partner from Crowe Horwath presented a progress briefing to Council in December 2018.
The Crowe Horwath report raised concerns for newly appointed CEO, Evan King, and he contacted the Local Government Inspectorate early in 2019. The Inspectorate had meetings with the CEO and then Mayor, Cr Don Henderson, in May. On July 23 and 24, 2019, the Inspectorate visited Council offices as part of their investigation.
The LGI completed a draft report early in 2021 which was circulated for comment to key stakeholders including people named in the report. Recipients were allowed a few weeks to respond. It has been over a year since the draft report was circulated. When contacted by The Wombat Post last week about a date for release of the final report, the Chief Municipal Inspector, Michael Stefanovic, replied simply that, “The Inspectorate is finalising its report into Hepburn Shire Council.”
In an attempt to cut through the secrecy surrounding the Inspectorate report, The Wombat Post requested, under Freedom of Information, a copy of the Crowe Horwath report which was presented to the Audit and Risk Committee in May 2019. The request was refused on the basis that the report is subject to secrecy provisions. People who have seen the Crowe Horwath report or the Draft Inspectorate report are bound by severe confidentiality clauses.
It is inconceivable that it has taken a year to “finalise” the LGI report. A possible explanation for the delay is that a person or persons named in the report is delaying the release of the report by legal processes. The LGI does not have the same legal immunity enjoyed by parliament and some parliamentary committees under the Parliamentary Privileges Act.
It has been three years since the LGI commenced their investigation. In this case, the Local Government Inspectorate has clearly failed in its stated role to encourage transparency and accountability across the local government sector.
There have been wholesale changes in Council since the LGI report was initiated. The CEO, six of the elected Councillors and many other Council officers have departed. The Rex project has been abandoned and the current Council has directed the current CEO to make arrangements for the sale of the site at a probable loss of several millions of dollars. The LGI report, which will cover only the very early decisions and actions surrounding the project, will be of little more relevance than an historical footnote when it is finally released.