A regional Victorian council has been sacked and its chief executive charged with misconduct after a damning report found public money was mismanaged and went missing.
The Central Goldfields Shire council was dismissed on Wednesday by the state government which cited financial mismanagement and a range of governance failures.
"I do that with a heavy heart, because the council itself has failed the people of Central Goldfields," Local Government Minister Natalie Hutchins told reporters.
The "damning and explosive report" found the council cost ratepayers an estimated $730,000 in the sale of public land.
"On top of that the CEO has been charged with 41 charges of misconduct," Ms Hutchins said.
"We've also seen serious misconduct in the human resources area of the council, with council staff awarding themselves contract work and undertaking that contract work whilst they're employed at the council."
The report found a significant amount of state government grant funding could not be accounted for.
Former mayor Geoff Lovett, hadn't expected the council would be sacked and suggested the move was made preemptively by the minister.
"The council has been working proactively to address every single point in the report," he told AAP.
"(We) were down in Melbourne recently, presenting an action plan that identifies every single issue."
Chief executive Mark Johnston was stood down in July after he was charged under the Local Government Act with two counts of conflict of interest, 34 counts of obtaining financial advantage by deception and five counts of false accounting.
Bill Jaboor was appointed as "municipal monitor", while experienced council manager Vince Haining is the interim chief executive.
The state government on Wednesday introduced an emergency bill to sack the council, and it passed parliament's lower house immediately.
Ms Hutchins said the damning report had shocked local residents.
"We didn't have (a) very good indication from the council that they were going to take this report seriously," she said.
But Mr Lovett said councillors believed they were doing everything possible to address the problems and even at a meeting on Tuesday night there was no suggestion they would be sacked.
Administrators will be put in place, but the Greens urged the government not to wait too long to hold fresh elections.
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