Sydney city
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Sydney's Liverpool City Council is facing a potential suspension and a public inquiry after a state government probe discovered "widespread dysfunction" within the agency, especially in the spheres of recruitment and procurement, with the mayors and councilors getting improperly engaged in developing assessments.

The probe's findings were announced by the Local Government Minister Ron Hoeing. He explained that the seriousness of the issue warranted government intervention. The council, which serves a population of about 250,000 people in Sydney's southwest, is handed seven days' time to respond to the allegations.

If the council is unable to sufficiently resolve the issues, an interim administrator may be appointed to supervise its operations, according to The Leader.

Hoeing believes that they have been only scratching the surface and there's more problem lurking below. "It was within my discretion to suspend them, but I chose to give them the... opportunity of being heard... because of the very serious nature involved with suspending a council," Hoenig told ABC.

A flurry of other problems that were found within the council were a "toxic culture" including a gender bias and "significant complaints" which led to public abuse of some staffers.

"A number of senior people within the council were appointed without a competitive process, records were missing... salaries were determined arbitrarily at high levels," Hoeing said.

Investigators concluded that Liverpool City Council faced problems with a significant project (council's $400 million Civic Place Project), disregarded rules, and got involved in the procurement process to pay a consultant inappropriately. The fired CEO, John Ajaka, received unjust treatment, and the council's development evaluations took twice as long as the state average. The Independent Commission Against Corruption (ICAC) will be consulted over the results.

Liverpool City Council Mayor Ned Mannoun supported a public investigation. However, he rejected the allegations against him and the councilors in the report, which he called "purely political."

Mannoun said he would consider legal options to ensure September's planned council elections proceed, noted that a delay would be "denying the people their democratic right to have a say".

"It's not surprising that I'm a Liberal and they're Labor," Mannoun said.