A local council at the centre of a national political battleground faces a takeover by administrators after claims of widespread dysfunction.
But the Liverpool City Council mayor has hit back at a NSW government move to suspend office bearers and appoint an interim administrator, labelling the findings of an investigation "a shopping list of unfounded allegations".
The state government has ordered a public inquiry into the fast-growing council and will move to postpone its September elections following an investigation into conflicts of interest and general operations.
Problems with recruitment processes, procurement irregularities and allegations of a toxic work environment have been outlined in an interim report.
Local Government Minister Ron Hoenig has written to mayor Ned Mannoun to advise of his plan to suspend the council.
In 2016 Mr Mannoun unsuccessfully ran as a Liberal candidate for the federal electorate of Werriwa, a seat held by Labor since 1934.
Liverpool sits in the western-Sydney region, with seats in that area integral to the Liberal party's pathway back to federal power as they look to take outer-suburban seats from the ALP.
Among a string of allegations, the report found evidence of Liverpool council jobs being given on "factors other than merit", including the direct appointment of people with political links to council staff.
Positions the report found had been handed out "based on political affiliation or previous employment roles" included a CEO, three directors and five other positions.
Mr Mannoun is accused of but denies appointing a solicitor he worked with in the private sector into a $250,000 role, while another director allegedly instructed the hiring of two immediate family members.
There was also evidence of direct interference in the assessment of developments and other activities, the government said.
Mr Mannoun welcomed the inquiry - stating he had written to the minister to ask for it - but said suspension was a bad idea because it stopped council and its officials fully responding to the report.
"It makes me wonder why the minister wants to deny me and my councillors access to council support," he said.
"From my initial read, what the minister says is evidence of poor process is a shopping list of unfounded allegations by unknown people who may hold a grudge against the me and the council."
Mr Hoenig said communities expect councils to act with integrity and in their best interests.
"It has become clear that is not the case at Liverpool City Council and there is major dysfunction across the entire organisation," he said.
Liberal MP Wendy Tuckerman suggested the government had been aware of the dysfunction allegations for more than a year, and suggested it had only taken action this week to distract from allegations surrounding union corruption.
The United Services Union - which represents staff at the council - said the local government minister's call was correct.
"For many years our members have been reporting to us problems at Liverpool Council … Ned Mannoun has gone through 10 CEOs in eight years, I think that tells you all you need to know about his people skills," union metropolitan manager Steve Donley said.
Council acting CEO Jason Breton said he and colleagues would continue to serve the community and respond to the report in more detail after greater consideration.
Liverpool council covers a population of about 250,000 people in Sydney's southwest and has been overseen by Mr Mannoun since late 2021 after a previous four-year stint in the job that ended in 2016.
Its area includes swathes of land to be redeveloped for housing, offices and industrial use around the under-construction Western Sydney Airport.
