Douglas Shire Council paid ex-worker triple their wage as contractor, audit finds
Auditors have uncovered a series of dodgy council contracts worth millions which have been paid out without proper paperwork, including one case where an ex-employee was paid triple their salary in an exclusive contract only open for four days.
A ex-council worker returned to a Far North council as a contractor and was paid triple their former wage, the state’s auditor has revealed.
The Queensland Audit Office has uncovered a “significant deficiency” in procurement processes at Douglas Shire Council during their annual audit of financial statements.
In a report to be tabled at Tuesday’s council meeting, auditors revealed missing contracts, cost blowouts, untested suppliers and millions of dollars spent without proper paperwork or oversight in the 2024/25 financial year.
Auditors reviewed eight contracts and found the council could not explain how it chose suppliers, whether the work was value for money or provide documents required under law.
In one example, a former employee’s company was handed a short-term contract until March 2025 but was the only one invited to bid, and the tender was left open for just four days.
There was no signed contract and conflict-of-interest forms were left blank.
“Under the contract, the employee earned approximately three times more than their rate when they were employed by Council,” the audit noted.
Council used the supplier on two more occasions with no supporting documentation, including a contract extension covering April 1 to May 31 this year.
In the 2025 final management report, auditors said council had not complied with its own policies or the local government regulation.
“Council is exposed to risk of not being able to demonstrate compliance with sound contracting principles including how value for money is achieved,” the auditors said.
“This could result in contracts being entered into that do not provide the highest quality goods or services or best value for money.
“When perceived or actual conflicts of interest are not obtained and effectively managed this increases the risk of fraudulent procurement activities.”
In another example, a contractor hired for a $148,800 job ended up getting more than $500,000 with approvals provided mostly by email.
In this case, auditors found no signed contract, no performance reviews, no justification for the repeated extensions and nothing published on council’s website – a breach of the local government regulation.
A third contract advertised at between $500,000 and $1 million grew to $2.8 million with no explanation on record.
In a response to the audit office, Council management accepted the findings, agreed with the recommendations and have started addressing the issues.
“As Audit is aware, management had previously identified the matters raised in Audit’s observations as unsatisfactory and in May this year commenced several actions,” the report said.
Actions include slashing sole-supplier arrangements, launching an independent review into high-value contracts, tightening policies, centralising procurement staff and publishing all contracts over $200,000 at council’s website.
The audit office also found a significant deficiency at Cook Shire Council where manual adjustments are made to the general ledger, increasing the risk of errors or inconsistencies.
Cook Shire Council said it is currently undertaking a comprehensive review and reconciliation process to align the fixed asset register with the general ledger.
Councils’ audit results and significant issues are reported to state parliament each year.
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Originally published as Douglas Shire Council paid ex-worker triple their wage as contractor, audit finds
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