A Shoalhaven Councillor has delivered a punishing dressing down to  city executive  staff for their handling of an investigation into corruption allegations over the sale of an impounded  excavator.

The excavator was sold to the son of a senior city staff for about half what had been offered during a tender process.

Other bids for the excavator  were withdrawn after allegations tenderers were told there was money owing on the machine.

Former police officer Grant Schultz says council handled the matter very poorly, sending the wrong message to staff and the community.

City General Manager Russ Pigg says after complaints were made, council followed due process and reported the matter to the Independent Commission Against Corruption.

The staff member later resigned, and no action taken against him, or any attempt made to recover the excavator.

Councillor Gareth Ward says he is both angry and appalled at the way in which the situation was handed , particularly the fact the matter was never reported to elected representatives.

Cr Ward says had the same thing happened in a public company executives would have reported the matter to the board for their information.