Bayside Mayor hits back at minister’s letter to council
Bayside Council is on the cusp of being issued a performance improvement order (PIO) which would require council to lodge complete and audited financial reports for the 2016/17 and 2017/18 financial years.
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Bayside Mayor Bill Saravinovski has hit back at a damning letter by the NSW Minister for Local Government accusing the council of “not functioning effectively” over its failure to submit appropriate financial reports — with the mayor blaming the problem on the now defunct City of Botany Bay Council.
Bayside Council is on the cusp of being issued a performance improvement order (PIO) which would require council to lodge complete and audited financial reports for the 2016/17 and 2017/18 financial years — the first two years after the council was merged from Botany Bay and Rockdale councils.
NSW Minister for Local Government Shelley Hancock sent a letter to the council earlier this month with a notice of intention to issue a PIO, stating her serious concerns about those financial reports.
Cr Saravinovski did not mince his words during an extraordinary council meeting on Wednesday night which was called to finalise a response to the minister.
He said the issues the council was currently facing with its financial records could be traced back to the previous administration at City of Botany Bay Council, which included an ICAC investigation into former Botany Bay Council chief financial officer Gary Goodman who allegedly defrauded millions of dollars from ratepayers but died before court proceedings were completed.
“The previous administration of Botany Council should hold their heads in shame,” he said.
“We have inherited this mess. The previous administration should be ashamed of themselves of what we of Bayside have now inherited.”
Cr Saravinovski said he also found the letter from Ms Hancock “disgusting” and claimed she had declined to meet in person with the council.
However, former Botany Bay Mayor Ben Keneally, who was the Labor mayor of the council from 2012 to 2016, said it was “a bit rich” to blame the current issues on a former administration, particularly when the relevant issues related to financial reports up to two years after the amalgamation.
“In this context, you cannot blame the former administration given this was happening under his administration,” he said.
Mr Keneally said the ICAC investigation did provide a challenge for council but it was not correct to blame all the issues on the former council.
“On the one hand the specific problem of the fraud that was uncovered by the ICAC investigation is a specific challenge for the finalising of accounts, because the chief financial officer had been involved in a multi-year scheme to defraud the people and council of Botany Bay. So that is an understandable challenge,” he said.
“That said, this was a merger that Bill Saravinovski fought for … and it is a bit rich for him to now having fought for it to say it is all a bit hard.”
The council voted unanimously on Wednesday night to send a response for the minister to consider.
After considering the council’s response, the minister will decide on whether to move ahead with issuing a performance improvement order.
If issued, the order would require council to lodge complete and audited financial reports within 28 days.
If the council failed to comply, Ms Hancock could file another PIO or temporarily suspend the council.
The major issues with the council’s financial reports were outlined in the notice of intention to issue a PIO sent to Cr Saravinovski and general manager Meredith Wallace.
The issues related to breaches of the Local Government Code of Accounting Practice and Financial Reporting.
“(Firstly) a failure of council to have its financial reports prepared in accordance with the (code) and audited within four months after the end of the financial year,” Ms Hancock said in the letter.
“Further, council has failed to submit to the Office of Local Government a complete set of its audited financial reports for both the 2016/17 financial year and the 2017/18 financial year in accordance with the code.
“I am concerned that the failure by council to prepare audited financial reports within the four month statutory period demonstrates that the council is not functioning effectively.”
Ms Hancock wrote it was important for councils to submit complete and audited financial reports to remain accountable. “The disclosure of a council’s financial reports is a crucial way in which it remains accountable to its ratepayers.”
Council’s response to the minister stated that council had worked hard to put in place a detailed action plan called Project 2020 “to return council to a compliant reporting schedule”.
“Council contends that our ongoing honesty and transparency, along with the considerable effort and cost to bring our records up to compliance, shows that we are in fact functioning effectively,” the letter read.
“Council assumes you have been fully briefed on the complexity and challenges Bayside has been dealing with since the amalgamation of the former City of Botany Bay and Rockdale City Councils.
“It is important to note that council and the Audit Office of NSW has in recent weeks been seeking advice from the Office of Local Government on how to deal with some of the audit related issues that are unique in our circumstance and have not been experienced elsewhere in the sector.”
The letter also claimed the council had incurred costs of about $4.5 million since the amalgamation for “remediating the issues inherited as a consequence of the maladministration at the former City of Botany Bay”.
“This includes responding to the ICAC findings and a magnitude of issues identified by the Audit Office.”
Bayside Council was formed in September 2016 after former councils Rockdale and Botany Bay were amalgamated.
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