The Land Development Agency’s processes lacked “transparency, accountability and rigour” in relation to the acquisition of land adjacent to Glebe Park and Mr Spokes Bike Hire and Dobel Boat Hire at Acton, the ACT Auditor-General has found, adding that she is considering undertaking a broader audit of the organisation.
Dr Maxine Cooper has today presented a performance audit report entitled Certain Land Development Agency Acquisitions to the Speaker for tabling in the ACT Legislative Assembly, and its findings are damning.
Dr Cooper says ‘Transparency, accountability and rigour have been lacking in the processes used by the Land Development Agency for the acquisition of three properties and two businesses considered in the audit. Without these the integrity and probity of the acquisition process cannot be demonstrated.’
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The acquisitions in question were of:
• Block 24, Section 65, City (land adjacent to Glebe Park) – for $3.8 million
• Block 13, Section 33, Acton (Mr Spokes Bike Hire) – for $1.1 million (and $1.00 for the associated business and $52,338 for owners’ costs associated for the preparation of the deed of surrender)
• Block 16, Section 33, Acton (Dobel Boat Hire) – for $1.0 million and Lake Burley Griffin Boat Hire (a business which operated under a sub-lease from Dobel Boat Hire) – for $575,000 (and $10,000 as a contribution for legal and accounting fees and $16,387 to settle unpaid rent payable to Dobel Boat Hire)
Dr Cooper said the report had found administrative issues related to sourcing professional advice, procurement for contractors and the approval process for making acquisitions.
“While the number of acquisitions considered were few, given the significance of the findings I am considering undertaking a broader audit on the Land Development Agency,” she said.
LDA CEO David Dawes said he would not be resigning over the report’s findings.
“I’m looking forward to carrying on and implementing the new processes that are highlighted in the Auditor-General’s report and working with the new government in the future,” he said.
“I’m standing here firm.”
Asked about the manipulation of a freedom of information response cited in the report*, he said he knew nothing about it at the time it occurred.
“When we were going through the processes we discovered that something had been altered,” he said.
“That is just unacceptable. We immediately raised it with our investigation officer, an investigation was conducted, and that particular officer has been counselled, and that sort of behaviour won’t happen again.”
Mr Dawes said decisions related to the payments in question were made by him or by other LDA officers and had not been taken to the Minister responsible or to cabinet.
He acknowledged the report highlighted the need for improvement in the LDA’s processes to ensure the highest level of accountability and transparency, and said that since the audited land acquisitions occurred in early to mid-2015, the LDA had made significant structural, staffing and process changes that address and in some cases go beyond, the Auditor General’s findings and recommendations.
The changes included restructure of the City to the Lake project team and its composition and establishment of robust governance arrangements; centralisation of processes for obtaining valuations to ensure high standards and consistency; re-establishment of ‘in-house’ Corporate and Governance services to support the effective operation of the LDA; and increased procurement training for all staff.
In addition the former Australian Auditor-General, Mr Ian McPhee, had been engaged to undertake a Governance Framework Review for the LDA and the broader Economic Development.
“The Auditor General has recognised the difficulties of making commercial purchases in an open market transaction and has highlighted a number of process improvements that need to be made to ensure accountability during these complex transactions,” Mr Dawes said.
“The purchase of the properties involved was essential for the implementation of the City to the Lake project. I am satisfied the prices paid for these acquisitions were reasonable, appropriate and necessary to allow this key government priority to progress.”
The Canberra Liberals have announced they would conduct a full review of the LDA if elected. Labor this week committed to splitting urban renewal, which would include responsibility for the City to the Lake project, off from the LDA to be overseen by a new body.
The full report, Certain Land Development Agency Acquisitions: Report No. 7/2016, is available online here.
* From the report on the FOI matter:
The Land Development Agency received a Freedom of Information request on 5 November 2015 in relation to the acquisition of Block 24, Section 65, City (land adjacent to Glebe Park). A Land Development Agency senior manager (now executive) provided a document to Land Development Agency officers responding to this request which had only been created after the Freedom of Information request was received. The title of the Colliers International Block 24, Section 65, Division of City ‘Glebe Park Land’ May 2015 Discussion Paper was amended by the Principal of Colliers International from ‘Discussion Paper’ to ‘Valuation Advice’ on 12 November 2015 and accepted by the Land Development Agency senior manager (now executive). This document was provided in response to the Freedom of Information request received by the Land Development Agency on 5 November 2015. Submitting manipulated information in response to a Freedom of information request is unacceptable.