Former Goulburn-Murray Water managing director Pat Lennon has defended his allowances and expense claims following an adverse report from the Victorian Ombudsman announced this week.
The Ombudsman criticised Mr Lennon for claiming items of furniture in a $20000 relocation allowance and for the work expenses he claimed, including seeking reimbursements for alcohol, in his two years with the water authority.
Mr Lennon told Country News all his work expense claims were approved by the former chair, Jo Anderson, and there was no prohibition on the purchase of alcohol for events such as board dinners and for professional meetings.
He said he used his Melbourne house for accommodation in 75 per cent of his overnight Melbourne business meetings, which saved the corporation thousands of dollars.
Mr Lennon said the relocation allowance was agreed in negotiations with Ms Anderson, before his employment, so this became part of the contract.
He had discussed a package worth about $400000, but was prepared to take the lower, finally agreed figure, if the one-off relocation amount was provided.
‘‘I believe she agreed to the arrangement because she wanted to save the authority money in the long term, and it did,’’ Mr Lennon said.
‘‘To increase my TRP (total remuneration package) would have been an increased cost over five years instead of a one-off payment.’’
He believed the Ombudsman’s unease with the relocation payment was the main reason he became a target for the investigation.
‘‘How could these people, who were not present for the negotiations and the agreement, have a problem with it? It was an agreed contract,’’ Mr Lennon said.
He said he had no animosity towards the chair and the board.
He said the alcohol used for the dinners was moderate and averaged two to three standard drinks per person.
He denied that guidelines the Ombudsman described about alcohol expenditure applied to him.
Ombudsman Deborah Glass said the conduct of Mr Lennon, who claimed about $40000 in expenses while on a $380000-plus annual salary, and the chair, who approved all the MD’s claims, was inappropriate.
Mr Lennon pursued a claim for a living-away-from-home allowance as part of a salary sacrifice arrangement after he said he had advice from two recognised authorities that he was entitled to that.
The Ombudsman said the managing director’s ongoing pursuit of this tax break led G-MW to spend more than $17000 on legal/accounting fees to determine his eligibility.