‘Not functioning effectively’: Minister’s damning letter to Bayside Council
Bayside Council has received a damning letter from the NSW Minister for Local Government accusing the council of “not functioning effectively” and failing to submit appropriate financial reports. An extraordinary council meeting has been called as a result.
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Bayside Council has received a damning letter from the NSW Minister for Local Government accusing the council of “not functioning effectively” and failing to submit appropriate financial reports.
The council is now 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.
The council has called an extraordinary meeting for Wednesday night to finalise its response to NSW Minister for Local Government Shelley Hancock after she sent the council a notice of intention to issue a PIO.
“The purpose of the extraordinary meeting tonight is to finalise council’s formal response to the minister,” a council spokeswoman said.
The letter dated September 6, sent to Bayside Council Mayor Bill Saravinovski and general manager Meredith Wallace, stated the minister’s intention to issue a performance improvement order over issues with the council’s financial reports for the 2016/17 and 2017/18 financial years.
The major issues with the council’s reports were outlined in the minister’s letter and 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.”
She 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.”
The minister will consider the council’s response to her letter before deciding 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, the minister could file another PIO or temporarily suspend the council.
In the agenda for the extraordinary meeting on Wednesday night, Bayside Council summarised the work it was doing to correct the issues raised.
“Council has already lodged the critical components of its financial reports mentioned by the minister,” the agenda read.
“Some schedules remain to be lodged including permissible income returns for those years.
“These have been with the Audit Office of NSW (AO) since May 2019 for auditing. Council has been open and transparent in the challenges facing it since merger to resolve significant legacy issues let alone the harmonisation of two councils.”
The agenda also claimed if council was forced to meet requirements, it may cost quarter of a million dollars.
“In order to provide an audit opinion, the (Audit Office of NSW) may be required to undertake full testing of the rates levied on the 60,000 plus properties with the Bayside local government area. Council estimates this will cost at least $250,000 and take 3-6 months.”
The agenda said the council had worked to add more resources on its 2018/19 and 2019/20 financial reports.
“Going forward, council had recognised the imperative to redirect significant resources to bring council in compliance for the 2018/19 and 2019/20 financial reports and initiated Project 2020 to do so. This is on track.”
Bayside Council was formed in September 2016 after former councils Rockdale and Botany Bay were amalgamated.