Dear Beagle Editor, Your readers may be interested in my latest correspondence with ESC’s General Manager. ---------------------------------------------------------------------------------------------------------------------- $19 MILLION DEBT TO BE FUNDED BY ESC RATEPAYERS One would think that a multi million dollar liability, thrust onto a shire with an aging demographic, would have been closely scrutinised to ensure the financial viability of the project and the ability of residents to pay for it. One would also think that such a project would have a detailed current business case on which to base decisions. In regard to the Batemans Bay Regional Aquatic, Arts and Leisure Centre (BBRAALC) project, ESC’s Frequently Asked Questions(FAQ) page on its website asks: “Have the project finances been independently scrutinised? Yes. Council's independent Audit, Risk and Improvement Committee has been briefed on the financial details of the project throughout the process. The NSW Audit Office and NSW Treasury have also reviewed the financial details of the project.” The answers are comforting, intimating professional oversight and that all is ‘honky dory’. However, as a result of my sleuthing in search of such assurances, I was not convinced. As a result, I contacted ESC’s General Manager asking: * exactly what information was provided to the NSW Audit Office and to NSW Treasury? * for what purpose was it provided? * what feedback did the Audit Office and Treasury provide to ESC? I would also like to know if the Audit, Risk and Improvement Committee (ARIC) was ever provided with the ADCO construction tender and if so when? Also, what feedback did the ARIC provide to councillors, regarding the tender and the total budget for the project? RESPONSE FROM GM “.................... I apologise for the delay in providing you with a response. The statement that the “the NSW Audit Office and NSW Treasury have also reviewed the financial details of the project” relates to the internal processes undertaken by the NSW Government when examining grant submissions................” “The Audit, Risk and Improvement Committee (ARIC) were not provided with the ADCO construction tender. The ARIC have had multiple briefings by Otium Planning Group. Consultants from Otium briefed the ARIC on the revenues and expenditure expected over a ten-year period and a comprehensive briefing on the financials, including the long term costs and capital costs were also provided. The ARIC has not raised any concerns regarding this project.” OPEN LETTER TO ESC’s GENERAL MANAGER
General Manager,
In response to your email of 23rd April 2021.
Firstly, I cannot accept your apology for the delay in responding to my email as you provide no explanation as why your response took 15 working days and 2 reminders. You have failed to comply with council’s own Customer Service Charter of 10 working days.
Such conduct does not inspire confidence in council processes nor does it enhance the integrity of ESC.
Council’s website states, The NSW Audit Office and NSW Treasury have also reviewed the financial details of the project.”
Nowhere on the FAQ page does it signify that this statement refers only to ‘grant submissions’ and not to the ‘financial details of the project’ itself.
Such an assurance by council is deceitful as it implies there has been professional scrutiny of the project’s financial viability, which is not the case.
In your response you also state that the Audit Committee, “were not and have not been provided with ADCO’s construction tender.”
Yet on council’s FAQ page it states:
“Have the project finances been independently scrutinised?
Yes. Council's independent Audit, Risk and Improvement Committee has been briefed on the financial details of the project throughout the process.”
If the committee was not and has not been provided with the construction tender, the tender price or the total budget for the project then the ARIC was not briefed or provided with ALL the relevant financial information. Therefore they were NOT briefed ‘throughout the process’ as the last, most important details, were missing.
Again, such assurances made on council’s FAQ page are deceitful.
You state, “the ARIC has not raised any concerns regarding this project.” If they haven’t been given all the relevant information, they cannot make an informed judgement as to whether there is anything to be concerned about or not, and they certainly couldn’t provide any qualitative advice to councillors.
If the ARIC is not provided with all the financial information pertaining to a project then it cannot perform its official function, as
it MUST “keep under review the risks, progress, controls, finances and performance surrounding major projects.”
It must also be noted that the ARIC can seek external expert advice in relation to issues they are dealing with. In this instance, professional financial advice could have been sought if councillors were advised correctly, and sought a report from the ARIC.
At the recent council meeting, 27 April ‘21, you said,
"any councillor could have at any time ..... formally requested that the Audit Committee provide a report. No resolution to that effect was received until the very end, which was then defeated...."
General Manager, Clr Constable’s motion to seek a report from the ARIC (28 July ‘20) was defeated because you advised councillors the ARIC could not be provided with the ADCO tender as it was ‘commercial in confidence’ information.
Therefore, it was decided by councillors during their discussions, that there would be no point in seeking the ARIC’s advice if they weren't provided with the most costly and vital piece of financial information, the construction tender.
However, your advice to councillors was INCORRECT. The OLG confirmed this fact to me in December last year. It is incorrect because the ARIC is bound by confidentiality just like ALL council officials, including yourself, under the Model Code of Conduct. Therefore they can be provided with ‘commercial in confidence’ info.
The end result being that Councillors resolved to accept the tender amount and total budget for the project without an updated business case or any professional financial advice.
In doing so, they have committed ratepayers to a $19 million debt with ongoing running/maintenance costs of up to $3 million per annum, without ratepayers having any input or knowledge of the liability they were to be lumped with.
* I ask you to correct and/or clarify the information on Council’s FAQ page regarding independent scrutiny of the BBRAALC financial information.
* When will you apologise to councillors for the misinformation you provided, and clarify to them the issue that ARIC can be provided with confidential information?
* How do you foresee this enormous financial liability impacting ratepayers into the future as regards rates and infrastructure provision and maintenance?
Yours Sincerely,
Patricia Gardiner
Deua River Valley
Image by Gerd Altmann from Pixabay
