In a damning report Ombudsman George Brouwer found procurement at the City of Port Phillip was mismanaged with a chronic lack of oversight and governance.

In one example, the services of a consultant, working through the company Corporate Power, were procured with no contract put in place after services exceeded the local government threshold of $100,000, when contracts are supposed to go to tender.

From 2006 to the end of 2007 services went virtually unchecked incurring fees in excess of $620,000.

“Poor governance of this process allowed expenditure of significant amounts of public funds to occur with little, if any, oversight,” Brouwer said.

Investigations carried out by the Ombudsman found that the council’s procurement processes had been affected by poor governance, including poor tender and contract management practices;  failure to act on conflict of interest matters; non-compliance with purchasing guidelines and several cases that raised questions about compliance with provisions of the Local Government Act.

"My investigations identified a number of conflict of interest issues in relation to procurement and contract management which [the council] either failed to identify, or failed to respond to appropriately."

A further investigation into procurement processes at the City of Port Phillip by Local Government Victoria, at the request of the Minister for Local Government, had been deferred until the Ombudsman’s report was completed.