Dear Beagle Editor, Further to Peter Bernard’s observations others in the community have also been asking questions about the way Council’s books are presented and the anomalies from one report to the next. This issue has been smouldering for sometime. On January 1st 2016 a letter appeared in the Narooma News To the Editor Narooma News
Further to my recent letter concerning the Council’s revised budget submission.
When looking at the submission one must ask the following questions:
Why have the expense components changed to not display a number of major expense items? There is no mention of depreciation originally stated as $28.9m, employee costs originally stated as $36m.
Total expenses have now risen by $10m.
The Operating Performance Ratio has decreased from 1.5% to a negative 0.35%. Under the Fit for the Future assessments the minimum should be a minimum of 0%. This would mean that the Council does not meet that criteria to be assessed as Fit for the Future.
Have any of the Councillors questioned the submission?
Two of the Councillors are on the Audit Committee. Have they raised any issues regarding the submission?
It would seem that there is a significant lack of transparency in these areas and it is disappointing that the ratepayers are being treated in such a way.
Further Budget Concerns
It would seem that despite all the responses to a letter to the Editor concerning budget concerns, no writer has questioned as to why the expense components have changed between the original budget and the revised budget despite the grand total of $98,290,730 being the same.
If we compare the two tables we see:
Original Budget Revised Budget
Interest Business Development & Events
Depreciation Communication
Employee Costs Community Care
Other Costs (incl Materials & Contracts) Development Services
Executive Services
Finance & Governance
Integrated Planning
Etc
For those who wish to examine the issue further the expenses can be seen on page 86 of the approved 2015-2016 budget and attachment 1(b) of the revised budget.
Why has the ESC changed their account headings and what has contributed to the increase in expenses from $98,290,730 to $108,099,201? Almost $10 million in 3 months. Is there something that the ESC is not telling us?
Surely the reasons should have been given with the revised budget. Why have councillors not raised these issues, and in particulars the two councillors on the Audit Committee? Following on 24th November a letter appeared in the Bay Post To the Editor Bay Post
I am writing to you to express my concern about the Eurobodalla Council’s recent submission to once again revise its annual budget. This is their 3rd attempt in less than 6 months and must raise the question as to their administrative and financial expertise.
On the front page of their current revision they show a decrease in unrestricted funds of over $5 million.
How did such a major variance occur in such a short time?
With such a change in the budget, what actions are planned to remedy the situation?
In hindsight, with such a change in the budget position, would the Council still be found to be Fit for the Future?
It is noted that there is an increase over the original budget of over $6 million for the purchase of assets.
Did the Councillors approve this purchase and under what recommendation?
What procedures are in place to authorise that level of asset purchases? This is not the first time that it has been observed that Council adjusted their books. To someone on the inside of Council it might seem all above board and be justified as “housekeeping” but to those observing from the outside it is more like three cups and a pea where the community become so confused they can no longer follow the books. It is of the opinion of many that the Audit Committee members do not have the capacity to effectively audit and simply sign off in trust.
Above: The Three Cups and Pea often confuses the less attentive.
What is becoming more and more apparent is that there is a reluctance by Councillors to ask the hard questions that are continually being raised in regards to the figures used to “justify” the Special Rate Variation (SRV) . In turn, while it is known and accepted by Council that there were errors in its figures at the time of the SRV it is unknown whether these figures (with errors) were given to IPART in their submission (as has been formally asked by Mr Bernard on many occasions). Nor is it known, from the inconsistent approach by Council to its Financial Reporting terminologies and presentation style, how a positive turn around in just three short years saw Council become "Fit for The Future". At the end of the day it has become near impossible for the community to compare one set of figures with another. More recently the example of the purchase of the Batemans Bay Bowling club, as shown in Council’s financials, has also come under scrutiny. While the community appreciates that Council claims to be Open and Transparent in its accounts and reporting there remains a lot to be desired when they continue to move the goal posts and relabel apples to bananas.
The two Councillors now on the audit committee both stood on a platform of open transparency and a willingness to get to the bottom of the accounts questions - past and present in the 2016 election. It might be time for them to get rid of the legacy of doubt, throw out the rotten fruit and return the fruit bowl to being solely for apples so that annual comparisons can be drawn by the community.
You will see from the Council document above that in the most recent Council Budget they are using 2 Operating performances ratios and neither meet the target, and in fact are showing a decline.
Why use 2 ratios? Do they believe the FFTF calculation? You do not change a requested KPI unless you can substantiate that the basis of the calculation is flawed.
3 of the 4 KPIs show a decline.
Are the 2 current Councillors on the Audit Committee aware of these figures given that they have come from the Councils most recent Financial Report 23rd May 2017. Councillors Mayne and Constable: Please take note: Operating Performance Ratio: The submission shows a negative result in the submission until 2017-18 with a final ratio in 2019-20 of 2.39%. However the ESC worksheets show a negative in 2017-18 of -0.31% with a final ratio of 0.18%. Council staff were unable to provide historic figures to calculate the 3 year average as required by the FFTF proposal i. The Building and Infrastructure Ratio shows an average figure in 2016-17 of 108.5% but the average is in effect 75.1%. If we were to include the 2016-17 year the actual amount for 2016-17 would need to be 162.5%. This would reflect on future years. The ratio for the periods in the FFTF proposal has been shown to meet the benchmarks whereas there is a decreasing percentage below 100% up to 2019-20. The method the ESC used to calculate the FFTF amount must be open to question. Name and address supplied
