An eastern Victorian council is preparing its case after being asked by the state government to show reason why it shouldn’t be suspended over failure of governance.

South Gippsland Shire Council is the third council in Victoria to find itself in hot water with the state government over governance issues in the last three years.

Council has been given two weeks to respond to a report from the municipal watchdog recommending it be suspended and an administrator appointed after being put on notice by Local Government Minister Adem Somyurek on April 2.

South Gippsland Shire Chief Executive Tim Tamlin said it had been a difficult time for many of his staff, who were suffering as a result of “persistent negative stories about the council”.

“I am hopeful that this process will conclude in such a way that the community of South Gippsland can look forward to a more cooperative and productive future,” he said in a statement.

Mayor Don Hill acknowledged receipt of the letter from Mr Somyurek and said council would take time to “absorb and respond to the report”.

‘Poor governance and loss of community support’

Victorian legislation provides for the state government to appoint independent investigators to report on council structures, operations and governance.

Mr Somyurek said a report from monitor Peter Stephenson had found poor performance at South Gippsland in terms of direction, leadership, culture, behaviour and decision making.

The report also noted the council has lost the support of a large section of the local community and been beset by internal crises, with four councillors resigning.

“It’s important we get this right by making well-informed decisions in the best interests of the South Gippsland community,” Mr Somyurek said.

“The Council needs time out to reflect on its failure to provide good governance in the best interests of the South Gippsland community.”

“This will be a chance for the Council to work out how to work constructively as a team and build faith with the local community.”

It comes after the sacking of two other Victorian councils by Premier Daniel Andrews’ government in recent years.

Administrators took control of Central Goldfields Shire Council in August 2017 after the state government sacked it for financial mismanagement following a damning report by the Local Government Investigations and Compliance Inspectorate.

The inspectorate found a lack of transparency and disregard for legislative requirements had resulted in the loss of more then $730,000 in public funds.

Greater Geelong and its mayor Darryn Lyons was sacked in 2016 after the inquiry found the Council was “substantially dysfunctional” and incapable of governing properly.

Both councils remain under administration until local government elections in October 2020.

South Gippsland was assessed against good governance frameworks established by the Geelong commission of inquiry.

Mr Somyurek said he would determine whether further action is required following an assessment of the final municipal monitor report, careful consideration of any council submissions and any other relevant considerations.

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