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Auditor-General issues damning report on LDA deals

By Charlotte Harper - 30 September 2016 51

LDA

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.’

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.

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51 Responses to
Auditor-General issues damning report on LDA deals
1
justin heywood 4:37 pm
30 Sep 16
#

“….Submitting manipulated information in response to a Freedom of information request is unacceptable.”

‘Unacceptable’ ? Is that all?

The Auditor-General could have added the words ‘highly suspicious.’

Would anyone ‘manipulate’ a document for any reason other than to hide something? Merely saying that some unnamed officer was ‘counselled’ does not explain anything.

2
MERC600 1:56 pm
01 Oct 16
#

Well it’s certainly a hell of a way to run a guvy business. But what happens now? Do some regulatory mob step in? The local Plod?
The Feds perhaps. They still have some sort of hold over the Territories, although exactly what I’m not sure.

3
rommeldog56 2:44 pm
02 Oct 16
#

MERC600 said :

Well it’s certainly a hell of a way to run a guvy business. But what happens now? Do some regulatory mob step in? The local Plod?
The Feds perhaps. They still have some sort of hold over the Territories, although exactly what I’m not sure.

As far as I know, there is no intervention possible at the federal or any other level. Unfortunately, the ACT Gov’t is not like a local council with a Lord Mayer in a State that can be sacked by the State Government.

The only people who can fix this mess of a Government is ACT voters who will have to elect another party to Govern – preferably in their own right so they don’t have to do “deals” with a minor party as ACT Labor has done with the ACT Greens Rattenburry.

But will they ?????

4
dungfungus 3:14 pm
02 Oct 16
#

rommeldog56 said :

MERC600 said :

Well it’s certainly a hell of a way to run a guvy business. But what happens now? Do some regulatory mob step in? The local Plod?
The Feds perhaps. They still have some sort of hold over the Territories, although exactly what I’m not sure.

As far as I know, there is no intervention possible at the federal or any other level. Unfortunately, the ACT Gov’t is not like a local council with a Lord Mayer in a State that can be sacked by the State Government.

The only people who can fix this mess of a Government is ACT voters who will have to elect another party to Govern – preferably in their own right so they don’t have to do “deals” with a minor party as ACT Labor has done with the ACT Greens Rattenburry.

But will they ?????

The “six degrees of separation” theory applied to voting intentions in the ACT works more than anywhere else.

Simply explained, people high up in the ACT PS sector know what side their bread is buttered on and the same people have family who are voters also.

Anyone checked the rate of growth in the ACT PS lately?

5
creative_canberran 3:21 pm
02 Oct 16
#

rommeldog56 said :

As far as I know, there is no intervention possible at the federal or any other level. Unfortunately, the ACT Gov’t is not like a local council with a Lord Mayer in a State that can be sacked by the State Government.

Actually, it is. The Self-Government Act contains a provision that enables the GG to dissolve the Legislative Assembly and appoint an administrator (called the “Commissioner”) to exercise executive power, if in their opinion the assembly is no longer able to conduct its affairs or has royally stuffed up (I may be paraphrasing a bit there).

The Minister (for Territories) is then required to call an election within a certain time frame.

All this has to be announced to the Federal Parliament along with the reasons after it has occurred, but the GG alone has the power to decide, it’s a function of executive government. Indeed while the Assembly is dissolved, the GG has Executive power in the ACT as well.

6
dungfungus 3:50 pm
02 Oct 16
#

MERC600 said :

Well it’s certainly a hell of a way to run a guvy business. But what happens now? Do some regulatory mob step in? The local Plod?
The Feds perhaps. They still have some sort of hold over the Territories, although exactly what I’m not sure.

“….a guvy business…..”?

There is no such thing.

The LDA might think it is a business because it makes impressive profits by selling stuff that it gets for free.

That is not how businesses work in the real world.

7
dungfungus 3:58 pm
02 Oct 16
#

creative_canberran said :

rommeldog56 said :

As far as I know, there is no intervention possible at the federal or any other level. Unfortunately, the ACT Gov’t is not like a local council with a Lord Mayer in a State that can be sacked by the State Government.

Actually, it is. The Self-Government Act contains a provision that enables the GG to dissolve the Legislative Assembly and appoint an administrator (called the “Commissioner”) to exercise executive power, if in their opinion the assembly is no longer able to conduct its affairs or has royally stuffed up (I may be paraphrasing a bit there).

The Minister (for Territories) is then required to call an election within a certain time frame.

All this has to be announced to the Federal Parliament along with the reasons after it has occurred, but the GG alone has the power to decide, it’s a function of executive government. Indeed while the Assembly is dissolved, the GG has Executive power in the ACT as well.

If the GG got a rates notice on the rateable value of his lodge at Yarralumla he would more than “dissolve” the current legislative assembly and given his distinguished military credentials he would probably call out the Army Reserves to get the Territory running again.

It wouldn’t even be necessary to “get the trams to run on time” as they would be the first things to go.

The Territory could be renamed the Grand Duchy Of Molonlgo to keep our links with our Queen (the one in England, that is).

I think it would work.

8
dungfungus 4:06 pm
02 Oct 16
#

creative_canberran said :

rommeldog56 said :

As far as I know, there is no intervention possible at the federal or any other level. Unfortunately, the ACT Gov’t is not like a local council with a Lord Mayer in a State that can be sacked by the State Government.

Actually, it is. The Self-Government Act contains a provision that enables the GG to dissolve the Legislative Assembly and appoint an administrator (called the “Commissioner”) to exercise executive power, if in their opinion the assembly is no longer able to conduct its affairs or has royally stuffed up (I may be paraphrasing a bit there).

The Minister (for Territories) is then required to call an election within a certain time frame.

All this has to be announced to the Federal Parliament along with the reasons after it has occurred, but the GG alone has the power to decide, it’s a function of executive government. Indeed while the Assembly is dissolved, the GG has Executive power in the ACT as well.

Thanks for that important information.
It’s something that I feel we will come to hear more about in the medium / long term as the twice rejected self-government experiment in the ACT has clearly been a disastrous failure.

There are too many conflicts of interests to allow the model being used to work in place like Canberra.

I will leave it to the experts to suggest what else would be better but from my experiences of being here before and after self-government I think the former was next to perfect as you could get.

And it was affordable.

9
rommeldog56 4:32 pm
02 Oct 16
#

creative_canberran said :

Actually, it is. The Self-Government Act contains a provision that enables the GG to dissolve the Legislative Assembly and appoint an administrator (called the “Commissioner”) to exercise executive power, if in their opinion the assembly is no longer able to conduct its affairs or has royally stuffed up (I may be paraphrasing a bit there).

The Minister (for Territories) is then required to call an election within a certain time frame.

All this has to be announced to the Federal Parliament along with the reasons after it has occurred, but the GG alone has the power to decide, it’s a function of executive government. Indeed while the Assembly is dissolved, the GG has Executive power in the ACT as well.

Ok. Interesting. I wonder what the trigger(s) would be or what constitutes an assessment by the GG to that end.

No matter, I could never envisage that would happen anyway. Unless of course, the GG is a member of “can the tram”…..LOL…..

10
HiddenDragon 5:49 pm
02 Oct 16
#

dungfungus said :

creative_canberran said :

rommeldog56 said :

As far as I know, there is no intervention possible at the federal or any other level. Unfortunately, the ACT Gov’t is not like a local council with a Lord Mayer in a State that can be sacked by the State Government.

Actually, it is. The Self-Government Act contains a provision that enables the GG to dissolve the Legislative Assembly and appoint an administrator (called the “Commissioner”) to exercise executive power, if in their opinion the assembly is no longer able to conduct its affairs or has royally stuffed up (I may be paraphrasing a bit there).

The Minister (for Territories) is then required to call an election within a certain time frame.

All this has to be announced to the Federal Parliament along with the reasons after it has occurred, but the GG alone has the power to decide, it’s a function of executive government. Indeed while the Assembly is dissolved, the GG has Executive power in the ACT as well.

Thanks for that important information.
It’s something that I feel we will come to hear more about in the medium / long term as the twice rejected self-government experiment in the ACT has clearly been a disastrous failure.

There are too many conflicts of interests to allow the model being used to work in place like Canberra.

I will leave it to the experts to suggest what else would be better but from my experiences of being here before and after self-government I think the former was next to perfect as you could get.

And it was affordable.

In his ‘Confessions of a Failed Finance Minister’, Peter Walsh describes being confronted by a delegation of Canberrans who were aghast that the Federal Government was not prepared to meet their demands for education funding, and goes on to say that he dropped his opposition to ACT self-government then and there. That sums up, very nicely, the true reasons for “granting” self-government to the ACT, and I would guess that there is now a very firm, and quite bipartisan view on the subject at the federal level (particularly given the utterly predictable federal voting habits of Canberrans).

11
Masquara 8:19 pm
02 Oct 16
#

What was Katie Gallagher’s role in all this, if any? Or Jon Stanhope’s?

12
Ian 10:43 pm
02 Oct 16
#

I’d have thought that fudging a document for any reason is sacking material. But in the ACT it seems to get a promotion and a stern talking to.

13
dungfungus 11:11 pm
03 Oct 16
#

Ian said :

I’d have thought that fudging a document for any reason is sacking material. But in the ACT it seems to get a promotion and a stern talking to.

Painting dead grass green was a fatal error for one politician.

14
Heavs 1:08 pm
04 Oct 16
#

It would be interesting to have a quiet chat with Kirsten Lawson about this whole mess. She has been all over it for at least 6 months and been hinting at some very dark goings on for the last three.
We are a town with one newspaper and half a newsroom (ABC) – stuff like this is not getting the light shone on it as it needs to be (and would be in a town with an active local media).

A pox on both houses for not supporting an ICAC.

15
Charlotte Harper 2:15 pm
04 Oct 16
#

Heavs said :

It would be interesting to have a quiet chat with Kirsten Lawson about this whole mess. She has been all over it for at least 6 months and been hinting at some very dark goings on for the last three.
We are a town with one newspaper and half a newsroom (ABC) – stuff like this is not getting the light shone on it as it needs to be (and would be in a town with an active local media).

A pox on both houses for not supporting an ICAC.

Both the major parties followed the Greens’ lead in announcing a few weeks back that they will set up an ICAC for the ACT. The Libs a few days later and Labor last week.
Yes, every democracy needs journalists to hold the powers that be to account, and Canberra could do with a few more.

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