Victoria’s Labor Government has launched an independent inquiry into decisions made at the Office of Living Victoria (OLV) under the previous LNP government.

The OLV was set up in 2012 to drive water reform, but has been embroiled in controversy following investigations into the agency’s hiring and procurement policies. 

An ombudsmen’s report last year found OLV ignored government procurement processes so that contracts could be “awarded to people with personal relationships with senior management of OLV”.

“The ombudsman said it was one of the worst examples of dealing with a public sector organisation that he had ever come across,” Water Minister Lisa Neville said this week.

“We need to follow this, we need to see what happened.

“About $11 million has gone out the door, $30 million has been contracted and there's another $20 million that's available in the next stage.

“I remain very concerned about some of the contracts that were given.

“I want to look at those grants to make sure that the processes were followed properly,” Ms Neville said.

The new investigation will be carried-out by former Victorian auditor-general, Des Pearson.

Peter Walsh, the Water Minister at the time the OLV was set up, said he did not want to see the inquiry turn into a witch-hunt.

“Through the whole process I kept asking the questions and I was assured all the way through this that there were probity officers who were overseeing the whole process,” he said.

“Des Pearson will do his job and I'm sure he'll find that the money has actually gone to deliver good outcomes from a water management point of view, an environment point of view and from a community liveability point of view.

“There were processes in place. If people don't follow government processes there's rules there to handle that,” Walsh said.