Queensland Reconstruction Authority to probe council over audit, cyclone recovery funds

A Far North council handling more than $160m in disaster recovery funds faces more scrutiny after state auditors discovered contracts awarded to former employees and costs that tripled without explanation.

Queensland Reconstruction Authority CEO Jake Ellwood pictured at Kedron Emergency Services Complex. A QRA spokeswoman said the authority will review the audit findings. Picture David Clark

The state agency that has tipped in more than $160m for Douglas Shire’s disaster recovery is reviewing an audit report that found the local council breached legislation.

In its annual audit, the Queensland Audit Office found missing contracts, cost blowouts, untested suppliers and millions spent without proper paperwork at Douglas Shire Council.

Council has confirmed most contracts were funded by the Queensland Reconstruction Authority and followed on from initial engagements after Tropical Cyclone Jasper in 2023.

Douglas Shire Council CEO Scott Osman said most of the contracts with audit issues related to Queensland Reconstruction Authority funded projects.

A QRA spokeswoman said it was reviewing the audit findings.

“Councils are required to certify that they have complied with all applicable procurement processes, and we expect all councils to act with the highest financial integrity,” she said.

“QRA is reviewing the Douglas Shire QAO report and its findings, and will engage with the council to understand the extent to which the matters raised relate to projects delivered with grant funding administered by QRA.”

Under Disaster Recovery Funding Arrangements, council will receive $162.5m, with more than $100m already committed.

This will fund significant projects such as Noah Creek Bridge, repairs to Alexandra Range landslips and critical water infrastructure.

In one example mentioned by the QAO audit, 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.

The ex-council worker was paid triple their former wage.

Torrents of gushing water from the post-Cyclone Jasper flood in December created more than 120 big landslips on Douglas Shire roads. Picture: Supplied

A different contract was also advertised at between $500,000 and $1 million, before it grew to $2.8 million with no explanation on record.

In a statement, Douglas Shire Council said it was taking the matter “extremely seriously” and already identified the issues included in the audit report.

“Our policies and the law exist to ensure transparency, accountability and value for money in all purchasing activities. Compliance is non-negotiable,” the statement said.

“As custodians of public funds, we have a responsibility to uphold the highest standards of professionalism and integrity.

“Council initiated the necessary management actions prior to the release of QAO’s final report and has continued to work collaboratively to ensure procurement issues are addressed in a manner that meet both Council and QAO expectations into the future.”

Douglas Shire Mayor Lisa Scomazzon has backed council management since the audit results were publicly released this week.

Douglas Shire Mayor Lisa Scomazzon said the CEO and executive leadership team should be commended for tackling “historical issues”.

“The new elected member team, combined with a new executive team has a mandate for transformational change for the benefit of residents and ratepayers, the hard work has commenced and as demonstrated today, the results will be openly and transparently disclosed,” She said.

Originally published as Queensland Reconstruction Authority to probe council over audit, cyclone recovery funds