Authorities are investigating a Victorian council over allegations workers used money from doing private jobs to start a bank account that funded a staff fishing charter, race days and shares in a racehorse.

Key points: A former worker says Yarriambiack Shire Council workers started up a "social club" 30 years ago in an effort to bond with one another

A former worker says Yarriambiack Shire Council workers started up a "social club" 30 years ago in an effort to bond with one another He says the club established a bank account funded by on-sales of drinks and private work carried out by employees

He says the club established a bank account funded by on-sales of drinks and private work carried out by employees The worker's comments come as an investigation into the council is launched, following a scathing report released last year

Yarriambiack Shire Council in north-western Victoria was already the subject of a 13-month investigation by the Local Government Inspectorate, which released a damning report in November 2019.

The report found, among other things, that there was a long history of staff at the council's Hopetoun depot doing private jobs on council time, using council equipment.

The staff regularly received cash or gifts for the private work, which were treated as donations to the depot's social club.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 10 minutes 41 seconds 10 m Authorities are investigating a Victorian council, where staff allegedly used money from doing private jobs to start a bank account that funded a staff fishing charter, race days and shares in a racehorse. ( Danielle Grindlay ) Download 14.7 MB

The Inspectorate's report said "private works had been regularly conducted for many years" but did not detail what they involved or how much money was made.

Council chief executive Jessie Holmes said the investigation was "finalised" in November, but chief municipal inspector David Wolf said there was more to come.

"The Local Government Inspectorate is investigating issues related to financial records connected to a Yarriambiack Shire Council depot social club," Mr Wolf said in a statement.

"As this investigation has not concluded, we cannot comment further at this time."

Ms Holmes declined to answer any questions about the social club account.

Council source reveals account

The probe into the Hopetoun depot social club comes amid new leaks from within the council about how money from private jobs was spent.

In response to claims from a whistleblower, former Yarriambiack Shire Council manager Chris Lehmann confirmed a social club bank account was used to fund events and equipment for Hopetoun depot staff members.

Mr Lehmann was employed at the Hopetoun depot when the club was formed about 30 years ago.

"It was set up so that at the end of the year, if we wanted to have a drink or wanted to go somewhere, there was a social group that the money went into," he said.

"It was about socialising and building up a good rapport amongst the works crew.

"We bought a reverse cycle air conditioner for the old depot.

"We also bought a barbecue and a barbecue trailer, which is now at Warracknabeal."

Chris Lehmann confirmed reports from a whistleblower that a social club bank account was set up to fund events and equipment for staff. ( Danielle Grindlay )

'Money from the fridge'

Mr Lehmann was the works coordinator at Yarriamabiack Shire Council until December 2018, when he was made redundant.

He confirmed that the social club paid for staff to go on a Mornington fishing charter with accommodation covered, as well as three separate race days with travel, betting money and some alcohol provided, and the purchase of shares in a racehorse.

Social club funds were raised by doing private jobs for community members, selling wood that staff were employed to clear from roadsides and on-selling beer to staff at the Hopetoun depot.

Mr Lehmann said private work only formed the base of the social club's funds, which were then grown by purchasing soft drink and on-selling it to staff.

"More money came from the fridge than anything else," he said.

"On hot days you're making $1 or $1.50 out of each can of soft drink — it doesn't take long to make $20 or $30 each week."

Mr Lehmann said community members and contractors often donated slabs of beer to the social club, which were also on-sold to staff at the Hopetoun depot.

"Some Friday nights in the old depot there would be blokes hanging around having, you know, three or four beers together, which was great," he said.

"The money was all going back into the social club."

$30,000 over 30 years

Mr Lehmann stressed that the fishing charter and race days were isolated events, made possible by 30 years of raising funds for the social club.

He estimated that the club raised about $30,000 over 30 years.

"The cost of those trips was about $6,000 and the amount in the bank is less than $10,000 as far as I know," he said.

"There was money put on the bar occasionally at our [annual] break up … but not a huge amount."

Most of the allegations involved staff at Yarriambiack Shire Council's Hopetoun depot. ( Supplied: Local Government Inspectorate )

Mr Lehmann did not go on the fishing charter and only attended one of three trips to the annual Horsham Cup race event.

"[When] it was a big group they'd hire a bus locally and one of our people would drive it," he said.

"The first year there was probably about 15 people who went, then it dropped down to about 10 and I think last time they only ended up taking a car.

"[The social club] always paid the entry fee and on one occasion [staff] were also given $20 to punt."

Some alcohol was also covered by the social club.

Mr Lehmann confirmed the social club continued to pay for shares in a racehorse, but said it was "not very expensive".

"It cost $100 to get into and it costs $240 a year to stay in," he said.

"The racehorse is part of a syndicate that owns five per cent of a horse — the social club owns one-tenth of that," he said.

"Most of the other syndicate people are shire workers, including myself … it was just a bit of a social thing where people can get together again and watch a horse run."

A source from within council said Hopetoun staff attended a meeting last week to discuss what to do with the social club's remaining funds, said to be about $10,000.

The source said plans were made to donate the money to charity, with most staff in support of giving it to the Royal Children's Hospital.

The ABC approached Hopetoun depot management, but did not receive a response.

The Yarriambiack Shire covers more than 7,000 km2 in north-western Victoria. ( ABC News: Patrick Rocca )

Hopetoun staff morale low

Mr Lehmann was not referenced in the Local Government Inspectorate's report or any of the ensuing media coverage.

He decided to speak publicly out of concern for Hopetoun depot staff.

"I just thought there had to be some context to it … and if it means me sticking my head up, so be it," he said.

"You know, a report like this doesn't just line up 20-odd blokes — it lines up their wives, their children, their mothers, their fathers, their cousins [and] their friends.

"It's definitely affected staff morale and it has affected the community."

While he admits that many of the ways staff raised money for the social club were no longer socially acceptable, Mr Lehmann said the underlying aim was to promote staff wellbeing.

"I hope [ratepayers] understand," he said.