Warrnambool City Council is reviewing all purchases on its 81 corporate credit cards after a senior officer was asked to repay an undisclosed amount for inappropriate transactions.
After tourism chief David McMahon resigned on Monday, The Standard asked the council whether any misuse would be investigated by external agencies.
Chief executive officer Peter Schneider said the council was fully cognisant of its reporting obligations to authorities and "any necessary actions either have or will be undertaken, as required".
"I am not at liberty to discuss specifics of this particular matter with the public or media and am legally bound to maintain confidentiality," he said.
The Local Government Inspectorate's chief David Wolf said it would not investigate.
"Victoria Police is the responsible authority for investigating potential fraud," he said.
Police said they would not investigate unless a complaint was filed.
Independent journalist Carol Altmann, who uncovered the credit card discrepancies through Freedom of Information, said it was "not about claiming a scalp".
"It's about the greater issue of accountability and transparency around council spending and this is what interests ratepayers the most," she said. "It is public money and that has to be front and centre. Council officers need to consider that before they spend a single dollar on a credit card."
Ms Altmann has forwarded her stories to the Independent Broad-based Anti Corruption Commission.
Mr Schneider. who declined to release details of an internal review into the card's use, said a comprehensive review of credit card procedures was underway.
"The review will also examine the number of credit cards held, the procedures around inductions for card holders, documentation requirements, authorisation procedures, the justification process for issuing credit cards and the like," he said.
Mayor Tony Herbert said councillors were "very disappointed" and could "empathise with and understand the community's views".
"We are also encouraged that this was picked up internally last September and that a review was undertaken at the time and that the CEO is working with council to make sure we have stronger controls moving forward to ensure that this does not happen again."
Municipal Association of Victoria president Coral Ross said it was important for all levels of government to ensure they had compliant and robust integrity processes to maintain public trust.
"The MAV does not have a regulatory or investigative role over councils," she said.
"However we have encouraged all councils to review the findings and recommendations from the recent Victorian Auditor General's report into fraud and corruption controls to ensure council processes are meeting both legislated and community expectations."
Warrnambool councillor Rob Anderson said councillors were involved in strategic matters, not operational.
"We were advised when it happened and the money paid back, but the day-to-day running of the council and staff is not directed by councillors," he said.
"That is operational, which comes under the CEO."
He said councillors did not have credit cards.
Crs David Owen, Michael Neoh, Kylie Gaston and Peter Hulin declined to comment. Cr Sue Cassidy did not respond.
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