MidCoast Council audit report: Mayor Claire Pontin, councillor Peter Epov respond

A councillor on the Mid-North Coast says he is “embarrassed” about a “damning” NSW Auditor-General’s report into the council’s financial situation – but the mayor has a different view.

A MidCoast Councillor is “embarrassed and disgusted” about findings from a state audit into council’s financial management and governance – but the mayor takes a very different view.

Councillor Peter Epov of MidCoast Council was responding to the newly released NSW Auditor-General’s report by Auditor-General Margaret Crawford.

“Such a damning report which casts a dark shadow over our integrity and the findings will result in widespread and significant reputational damage,” he said.

The report found the council has not met legislative and policy requirements to effectively carry out long-term financial planning – and is likely to remain in deficit for another decade.

It also highlights how the council has struggled to integrate four financial management systems and processes after local government amalgamations in 2016 and the merging of MidCoast Water functions a year later.

MidCoast Council was created as part of the ‘fit for the future’ process in 2016 involving the merging of Taree, Great Lakes and Gloucester Shire councils.

Mayor Claire Pontin defended the council and said it’s been a mammoth task to integrate the four entities with “information scattered across four different financial systems”.

MidCoast Council Mayor Claire Pontin.

“The report recognises the work council has been doing and that is encouraging – although we may have been a bit slow to do some of the things they would have liked,” she said.

Ms Pontin said a draft financial stability plan would be released in the first half of next year and the council would be “in a pickle” if it relies on grants that are “drying up”

She did agree with Mr Epov, however, that the findings of the report were no surprise.

In a controversial move that sparked community protests in 2018, the newly merged MidCoast Council purchased and repurposed the old Masters building on Manning River Dr for its new headquarters. Picture: Facebook

Mr Epov criticised the council’s official response to the report.

He said he had been speaking out about failures for five years with no effect and he was concerned council would be unable to offer even a basic level of service in years to come.

The council’s audit response came swiftly on Friday afternoon by way of an optimistic press release, which criticised the audit’s “narrow scope”.

General manager, Adrian Panuccio said: “Generally when a performance audit is undertaken a number of councils are reviewed to be able to draw comparisons and identify common issues and challenges“.

“In this case the Audit Office chose to conduct an audit over a single council which doesn’t, in our view, deliver the same benefits of comparing the situation and challenges in different types of councils,” he said.

All 128 councils across NSW were financially audited and out of these only MidCoast Council was selected for a further performance review.

It is the first time since 2018 that an individual council has been selected for a performance audit – and Ms Pontin says she has been unable to get an explanation about this.

“Why they choose us? We don’t know,” she said.

Councillor Peter Epov

Mr Panuccio said the council put its objection to the audit’s approach on record.

“We also have urged the NSW Audit Office to undertake an audit of the state government merger process to ensure that lessons learnt are captured and future mergers are appropriately planned and supported,” he said.

Mr Panuccio said the report’s recommendations were consistent with the improvement path council has been on since early 2021.

Mr Epov plans to raise questions on notice in the lead up to the next council meeting on June 28, including in relation to council’s intention or otherwise to apply for a special rate variation to increase rates above the normal peg in the 2024/25 financial year.