Cardinia Shire Council has fronted a parliamentary inquiry into fraud and corruption controls in local government, highlighting the unique risks and accountability challenges faced by fast-growing outer suburban municipalities.
Interim CEO Peter Benazic and Mayor Cr Jack Kowarzik attended the Public Accounts and Estimates Committee (PAEC) hearing at parliament on 28 July. The committee is examining fraud and corruption controls across local government, following two critical reports from the Victorian Auditor-General in 2019 and 2022.
In a written submission, Cardinia said the challenges faced by interface councils go beyond typical issues like procurement or IT systems.
“In some respects, the challenges for interface councils are not significantly different than those faced by all Council’s in areas of procurement, information technology, corporate card use and general controls,” CEO Benazic said.
“The most significant differences are in the planning space and need to respond to rapid provision of infrastructure and development approvals. Interface councils are often required to undertake land acquisitions, deliver unplanned infrastructure and enter into agreements with state agencies with little control over time, budget or ability to be fully transparent with its community.
“Due to the confidential nature of these matters and the lack of transparency, these can be areas that either invite fraud or create allegations/perceptions of fraud and corruption and need to be closely monitored.”
Cardinia highlighted the critical role of leadership in shaping a transparent culture.
“Culture is set from the leadership of the organisation at both Councillor and Executive level. It is recognised that the role of the Mayor is critical in supporting this,” Benazic said.
To strengthen governance, Cardinia has implemented new technology systems to improve reporting and transparency around procurement and expenditure.
These efforts have been “well supported by council, who have supported the organisation by recognising the ongoing efforts to improve governance and transparency”.
The council’s most recent induction program included a presentation from IBAC’s David Wolfe and a session with Maddocks’ Mark Hayes on the risks when “the lines become blurred” between operational and governance roles.
But despite improvements, council leaders noted that calling out inappropriate conduct remains difficult.
“Particularly in the area of corruption the impact is greatest on Executive in terms of being asked to question or call to account Councillors,” Benazic said.
“This can be a challenging and complex role for Executive to play, particularly when matters can either be grey or based on hear-say.”
On cybersecurity, the council acknowledged its systems are vulnerable.
“The complexity and diversity of these systems makes it challenging to implement uniform cybersecurity measures across all departments,” Benazic said.
“Cardinia has a number of legacy systems that may not support modern cybersecurity measures. Upgrading or replacing these systems is costly and timeconsuming, leaving vulnerabilities that can be exploited.”
Benazic said “Cardinia has borrowed significant funds to upgrade its enterprise systems” but striking a balance between operational efficiency and rigid controls for a “large and diverse workforce is challenging.”
The submission also expressed concern over integrity agency resourcing. Cardinia described delays in investigations and little transparency around outcomes.
“There appears to be an under-resourcing of integrity agencies which is leading to delays in outcomes being achieved or communicated,” Benazic said.
One example involved a self-report to the Local Government Inspectorate in September 2024 regarding corruption allegations around a suburb naming proposal. As of July 2025, the council had received no response.
“There seems to be no ability for LGI to provide any information including estimated time to respond. There appears to be little appetite for ‘early intervention’ when a councillor’s conduct is becoming an issue.”
Cardinia called for reform in how complaints are handled during election periods, highlighting a “significant issue of councillor behaviour in the lead up to the 2024 elections.”
“Council’s feedback being that this is not a transparent process for voters and has a negative impact on councillor relationships in an already tense environment,” Benazic said.
On internal processes, Cardinia confirmed it employs a dedicated Fraud Officer, reports regularly to its Audit and Risk Committee, and includes fraud controls in its strategic audit plan.
The PAEC is due to table its final report by 20 November 2025.
