Audit finds Townsville City Council bypassed public tender rules

Townsville City Council has again come under scrutiny after an external audit found staff bypassed mandatory public tender requirements to appoint a preferred contractor.

The Queensland Audit Office (QAO) report, released on November 13, determined the council breached state procurement regulations by directly engaging a contractor for work valued above the $200,000 threshold without inviting tenders, as required under the Local Government Regulation 2012.

According to the audit, the staff member who recommended and approved the contract relied on incorrect financial assumptions, basing the estimated value on a single year of expenditure despite the agreement running for three years. The final contract cost ultimately exceeded both the quoted price and the approved recommendation.

The findings add to pressure on the council, which has faced multiple integrity concerns over the past year. In 2023 it was revealed Townsville City Council had overpaid outgoing executives at a time when it cited financial strain to justify rate rises, subsidy cuts and increased parking fees. More recently, data showed nearly half of the council's projects from 2021 to 2024 were, on average, 26 per cent over budget.

The audit warned that failing to meet procurement rules undermines transparency, value for money and the credibility of the council's contracting processes. It also found TCC lacked independent checks on related-party declarations submitted by councillors and senior staff, relying solely on self-disclosure. The council has committed to strengthening verification processes.

With an annual budget exceeding $900 million - soon expected to surpass $1 billion as the city grows - the report has renewed concerns about governance and financial oversight.

James Cook University policy and politics lecturer Liam Moore said the findings could further erode public trust, particularly following last weekend's mayoral by-election, which delivered a decisive victory to former KAP MP Nick Dametto.

"Events like this are not ideal and may fuel more distrust among voters about how the council operates," Dr Moore said. "Residents want to see public institutions follow the rules, manage money responsibly and have robust processes in place."

A council spokesperson said the procurement issue was identified internally before an additional purchase order was issued, and the matter was voluntarily reported to the audit office. "The scope of works was able to be redefined and the final contract amount was approximately $120,000," the spokesperson said.

TCC has also told auditors it will deliver refresher training for staff and clarify contract-award requirements to prevent similar breaches.