Burnside Council: New inquiry launched into accounting practices

AN official inquiry has been launched into claims of questionable accounting practices at an Adelaide council that was previously embroiled in a corruption inquiry.

AN official inquiry has been launched into claims of questionable accounting practices at an Adelaide council previously embroiled in a corruption inquiry.

The State Government has intervened and demanded Burnside Council address several serious issues raised by its independent auditor over its financial accounts.

The council’s financial statement and annual report was tabled in State Parliament three weeks ago — four months after an official December deadline.

But in a highly unusual move, the auditor, Cory McGowan, a partner with firm HLB Mann Judd, signed off with a series of qualifications about its practices.

In his formal report, tabled in Parliament, Mr McGowan accused the council of “not operating effectively” during the 2013/14 financial year.

His concerns centred on accounting practices involving how it balanced its budget, valued “fixed assets” such as plant and equipment and its preparations of annual financial statements.

In addition, the council’s internal controls were considered “inadequate”.

The 2013/14 financial year was the first that metropolitan councils had internal controls audited. Burnside Council was the only council out of 19 to face criticism.

The Advertiser understands issues over its Asset Register date back to 2010 when it was subject to a highly contentious independent government inquiry into corruption allegations.

Mr McGowan has rejected council claims he was solely responsible for the delay, stating in his report his company spent “significant additional time” in assisting its management.

Finalisation of the financial statements and “other matters”, which took four months to complete, has triggered an extra $35,000 in costs for the council.

The problems have also forced Local Government Minister Geoff Brock to intervene and he has asked his department to investigate the matter.

The Office of Local Government inquiry will force the eastern suburbs council into “effective action”.

The council has asked SA Local Government Auditors’ Group chairman Tim Muhlhausler to conduct a review of the audit procedures.

Mr Muhlhausler, a partner at accounting firm Galpins, refused to comment.

No Burnside official, including chief executive Paul Deb — who has been embroiled in a row over a new contract extension — was available for comment while Mayor David Parkin claimed he knew nothing about the review.

The Advertiser understands Mr McGowan raised his concerns directly with the Minister, who has also been contacted by independent MLC John Darley.

Ken Macpherson, a former state auditor-general, spent two years and more than $1.5 million investigating the council that sat between 2006-2010.

He claimed much of his investigation related to matters of a criminal nature.

Six former Burnside Councillors took Supreme Court action in September 2010 to stop the publication of Mr MacPherson’s draft report and the inquiry was dramatically shutdown by then Local Government Minister Russell Wortley in July 2011.

Mr Wortley — who said he had not read the MacPherson report for fear he might accidentally reveal its contents — claimed the allegations were “petty, trivial and just local politics”.

The draft report remains suppressed.