Warrnambool City Council mayor Tony Herbert says he doesn't support a call from fellow councillors and South West Coast MP Roma Britnell for an independent review of the organisation.
On Wednesday Ms Britnell called on Local Government Minster Adem Somyurek to launch a review over mis-use of a council credit card.
"It is Roma Britnell's prerogative to make a request to the Minister for Local Government," Cr Herbert said.
"I would have hoped that she would have worked with council to explain to the community the necessary legal processes required by law, to deal with the credit card issue. Instead she has chosen to recommend to the minister otherwise. It is very disappointing and I do not support her call for an independent investigator."
Cr Herbert said chief executive officer Peter Schneider had an obligation to report any suspected corrupt or fraudulent conduct.
"He is fully aware of the lawful requirements to report to external authorities and is handling this matter by the book to ensure the best possible outcome for council and the people of Warrnambool," he said.
"There is no attempt to hide anything, however I can only try to explain again that we are prevented under the law from saying anything further at this point in time. If the CEO suspects there is a real possibility of corrupt conduct it is a requirement, under the law, that he leaves any investigation to the relevant authority."
Cr Herbert said it would also be considered unlawful for council to provide a running commentary on the matter.
"Councillors have been made aware of this on numerous occasions over the last month and have been briefed regularly by the CEO and myself," he said.
"It is important to remember that council has processes in place to monitor its financial transactions and it was these that first led council to identify a number of transactions on one officer's credit card that were outside of policy.
"This all occurred last year well before the appointment and arrival of the current CEO. As these matters were not reported to council at the time, it can only be assumed that the then-CEO did not consider the matters to be unlawful."
Cr Herbert said the council continued to work hard for the Warrnambool community.
"Along with providing the everyday services we are embarking on major projects including the $20 million library and learning hub, the $10 million upgrade of Reid Oval, the $4.5 million shared services project and the $2.9 million upgrade of Lake Pertobe," he said.