Welcome to this edition of integrity matters where we highlight some of the recent work of the Inspectorate team, and also look at the often problematic issue of confidential information under the Local Government Act and information or communication within councils that is believed to be in confidence.

A significant part of our work over the previous 12 months has involved the campaign donation responsibilities of candidates for local government elections. Transparency of support for candidates is essential for local government, given the potential for campaign donors to be affected by decisions of council and for improper conflicts of interest to exist.

For that reason, my office undertakes extensive work in providing information and guidance to candidates and examines candidate compliance in general elections and by-elections to ensure laws have been met. While the response by candidates from the Geelong and Melbourne by-elections was encouraging, 15 candidates from the last general election flouted the law and prosecutions resulted.

Recently I have spoken with different groups from the sector about conflicts of interest and the legislative framework that applies to councillors, special committee members and council staff under the Local Government Act. The laws envisage that councillors, committee members and staff have interests in their own community, and provide a framework which allows them, in many circumstances, to participate in discussions and decision making. Local government is unique in having a legislated framework for conflicts and my office will be focusing our guidance and education efforts on this over the next year.

Chief Municipal Inspector

Councillors have recently been required to submit their half-yearly ordinary interest returns, an important document for recording their interests in their municipality and flagging other positions and obligations. Non-disclosure can attract significant penalties for non-compliance.

Recently, Wyndham councillor Intaj Khan was convicted and fined $26,000 in Sunshine Magistrates Court after pleading guilty to eight charges for repeated failures related to the filing of interest returns.

The Inspectorate commenced criminal proceedings against Cr Khan in 2017 with three charges of failing to disclose companies in which he held office during the return period; three charges of failing to disclose companies in which he held a financial interest; and two charges of failing to submit ordinary returns between February 2016 and February 2017.

Cr Khan has lodged an appeal against the sentence which is listed for 14 September in the County Court.

These charges are not disqualifying offences under the Local Government Act 1989 and Cr Khan remains entitled to serve as a councillor. More information on the outcome is in our media release: www.go.vic.gov.au/qeMamV

The penalty comes after Cr Khan received a warning from the Inspectorate in 2015 for a similar offence and was provided additional training by his council.

Chief Municipal Inspector David Wolf said: "The laws relating to interest returns support the transparency and integrity of local government. For councillors, they are an important guide to help avoid conflicts of interest".

The Inspectorate recently received a complaint regarding a councillor participating in a matter before council relating to an entity in which they held a position.

The complaint alleged a conflict of interest but on review, the councillor had been appointed to the position by council as a nominee director, which is exempt under section 78B(3)(ba) of the Local Government Act 1989.

The current conflict of interest provisions in the Act often enable councillors to participate in matters, accepting that they have broad interests in the community and are able to participate in decisions where the aforementioned exemptions apply.