State auditor finds Gympie council exposed to fraud risk

A payroll system open to fraud, and lax security that left the door open for misuse of ratepayer money were among serious flaws found by the state auditor’s office in a review of Gympie Regional Council.

A payroll system open to fraud, and lax security that left the door open for misuse of ratepayer money were among serious flaws found by the state auditor’s office in a review of Gympie Regional Council.

A payroll system open to fraud and lax security leaving the door open for misuse of ratepayer money were among serious flaws found by the state auditor’s office in a review of Gympie Regional Council.

The Queensland Audit offices’ latest review of the council laid bare a number of deficiencies with how the council managed ratepayers’ money.

The report, presented to councillors on Wednesday, found eight problems within the council’s system affecting its financial management this year.

Three of those were significant.

The review found the council’s payroll system was left exposed to fraud due to “unsecure” and “easily edited” approval processes.

The culprit was an outdated version of Adobe software.

The audit office found the key to the cash safe at the Town Hall had been left in an “insecure” location, which opened the door to misappropriation of ratepayer funds.

Another problem the QAO found was the council over-provided almost $300,000 in vesting sick leave – leave which workers are entitled to be paid out if unused.

The QAO report said council workers who started after March 25, 2019, were not entitled to the council’s program.

However, it found there were 181 ineligible staff members still receiving the benefit, more than a third of the council’s workforce.

An outdated version of Adobe software left the council’s payroll system open to fraud.

Other problems found by the audit were that the key to the cash safe at the Town Hall was kept in an “insecure” location – this left the door open to misappropriation of ratepayers funds – and that there was no internal review of staff pay rates in the system which created a “heightened risk” workers would not be paid correctly.

The QAO also found two instances where incorrect rates data had been entered into the system.

In both cases the amount entered was $1-$7.30 greater than the approved amount.

These charges had been incorrectly applied 53 times.

Incorrectly entered rates charges that were “applied” on 53 times posed a reputational risk to the council. Picture: iStock

While the financial implication from these errors was “immaterial” and the problem was fixed, the QAO said it had the potential to hurt the council’s reputation.

CEO Shane Grey told councillors that although problems had been found “there was improvement they’ve also identified”.

“We’ve asked them (QAO) to be extremely thorough when they go through our books this year,” Mr Gray said.

“We’ve reduced the number of concerns from the QAO (found last year) significantly.”

Mr Gray said the council was working to fix the problems by improving its IT systems.