Former Shire CEO, council slammed in inquiry report
By Michael Sinclair-Jones
FORMER Toodyay shire CEO Stan Scott (left) has been slammed for costly financial mismanagement, conflict of interest and unethical conduct in an official report tabled in State Parliament today.
More than half of the report’s 25 adverse findings after a 20-month State Government inquiry are that Mr Scott failed to manage shire finances and resources, breached local government regulations and breached the shire code of conduct with condescending and offensive behaviour.
The report also said previous councils – including under former shire president Brian Rayner (above right) who still sits on the council – had failed under local government law to conduct its relationship with Mr Scott as an employer towards an employee.
The report details Mr Scott’s role in four botched court cases that cost ratepayers more than $670,000 in legal fees, much of it to a firm that employed Mr Scott’s son.Read more
It said the shire “failed to adopt a policy to give guidance and direction to the CEO on matters concerning litigation on behalf of the council”.
The former council had failed to comply with local government regulations in February 2013 when it voted 8-0 – against Mr Scott’s written advice – to launch legal action over an “overpayment” of $150,000 to former Toodyay CEO Graham Merrick.
Mr Scott wrote that there was “no reasonable prospect of success” and that the shire should “not commence legal action”.
The report said the council gave no written reasons – as required by law – “for a decision that is significantly different from the CEO’s written recommendation”.
Mr Scott then failed a policy requirement to obtain three quotes to pursue the matter, failed to keep the council informed about costs that eventually totalled $548,000 over four years and “acted in an unethical manner by not disclosing to the council that his son is working with the legal firm that the shire has frequently engaged to provide legal services”.
The report said there was no evidence that Mr Scott had updated the council about legal costs “which would have been prudent particulartly at the time that the legal costs exceeded the sum that could potentially be recovered from Mr Merrick”.
“The CEO recommended that once proceedings started, the shire not withdraw from the matter due to the shire being liable for their own legal fees and Mr Merrick’s legal fees.”
“When the CEO was questioned about his son working with Civic Legal he stated that he had spoken with the shire president about it and the CEO didn’t consider it to be an issue.
“At no time was this conflict of interest matter documented or put to the council.”
The report said it was not an offence under the local government law “however it is unethical and not behaviour that should be expected of a CEO”.
The report also details several instances where Mr Scott failed in his “significant responsibilities” as a financial manager, including that he:
- “Failed to ensure the resources of the local government were effectively and efficiently managed”, and
- “Did not have adequate oversight of the day to day operations of the local government, and this failure by the CEO has caused or contributed to the potential unnecessary costs to the Shire of Toodyay.”
Mr Scott was also found to have breached the shire code of conduct in an email to former Cr Di Granger which prompted her shock resignation only four months after she defeated former shire president David Dow in the 2017 council elections.
Mr Scott was found to have breached a requirement to “avoid derogatory statements” by “failing to communicate in a professional manner which may (as a result) cause any reasonable person unwarranted offence or embarrassment”.
The report said Mr Scott’s tone in earlier emails to former Cr Granger was “condescending”.
When the council went behind closed doors in January 2018 to consider her motion about “managing the performance of the CEO” he “proceeded to verbally berate Ms Granger in a hostile manner to which she felt was highly inappropriate and was embarrassed”, the report said.
“At no point in time during the time of the CEO talking did the presiding member (former shire president Rayner) bring the CEO to order.
“There are indications the relationship between the council and the CEO was not functioning per the requirement of the LG Act, which should be one of employer and employee.
“There are sections of the community which were unhappy with the lack of transparency and accountability of the Shire of Toodyay.
Due to a lack of positive action by the council in relation to the CEO, the discontent within the community has culminated in the need for an inquiry.”
Two other remaining councillors who joined Cr Rayner last year to vote in favour of a surprise backflip to retain Mr Scott for another 12 months after a decision not to renew his contract are former shire deputy president Therese Chitty and Cr Paula Greenway.
Mr Scott resigned in April this year after taking two months extended sick leave for an undisclosed illness just hours before the start of the council’s February meeting.
The report recommends a governance review, councillor training with a “comprehensive” report back to the Director General of the Local Government Department on participation and outcome, independent CEO performance reviews and a review of the CEO’s authority to take legal action on behalf of the shire.
Mr Scott said he was unable to comment on the inquiry’s findings because he had not seen the report, which was yet to be published online.