While references to deficient processes, missing or inadequate information & staffing issues litter the pages of the Financial Performance Review (FPR) conducted by Morrison Low Consultants (MLC) on council & released last week, it appears that the most significant deficiencies identified were the absence of adequate management controls & management oversight across the range of council’s financial activities & reports
The harshest specific criticism appears to be its observations on council’s Grants Management processes that resulted in council failing to pursue $3.4M in payment for a period of three years, due to “staff turnover” & “contract staff involved in disaster area moved to other projects with insufficient handover of tasks”.
In that regard, MLC observes on page 26 of its report:
“… it is apparent that year-end financial processes were not in place to ensure all expenditure that may have had a claimable component was claimed.
It should have been evident that with expenses of that magnitude that budgets would likely have been significantly exceeded & questions should have been asked, why & where the funds to match or offset the expenditure was coming from.
This was not the only failing in the process however, prior to year-end, budgets should have been being monitored throughout the hierarchy of responsibility for that area & issues identified with, what would have appeared to be, excessive expenditure for which there was no matching revenue source.”
Notwithstanding the above, eight of the 11 primary recommendations contained in the report’s Executive Summary relate specifically to the management of council Reserves.
While the association doesn’t wish to downplay the importance of council properly managing its Reserves, it understands that some of the recommended “controls” were already in place, but were simply ignored by management for its own reasons.
Which brings us to the overall adequacy of the report.
The association thinks that there are two glaring omissions from the MLC report.
The first concerns the absence of any assessment as to the adequacy of council’s information technology support systems for council’s financial management processes.
We already know that programming deficiencies were identified in respect of council’s financial modelling tools earlier this year, leading to serious errors in the information being used by council management & the elected council to make critical decisions in respect of council’s financial management plans & casting a shadow over such decisions taken in previous years.
The association contends that any improvements that might otherwise flow from the MLC report recommendations could well be jeopardised if council’s information technology systems are deficient & it believes that a major weakness of the review is that such an assessment was not completed.
What should be of greater concern for residents & ratepayers is that there are no clear findings going to the absence of management responsibility & accountability for council’s failure to properly administer its financial activities & reports; not to overlook the elected council’s failure to ensure that that those responsible were held to account.
While council’s general manager has regularly claimed that council does not operate a “blame culture”, the association believes that unless genuine responsibility & accountability for performance is sheeted home to management, there will be no incentive to pursue & achieve improvements in council’s performance while, equally, the absence of such performance measures makes a mockery of any management performance assessment that should underpin decisions about remuneration, the need for training & justifications for promotions, while also identifying larger organisational issues, such as the need to review & possibly amend structures, roles & responsibilities, recognise the need for higher level skills being brought to bear or the need to allocate additional resources.
While some members of the senior management team, in particular the general manager, along with the majority of elected councillors, continue to argue that the source of most of council’s problems is simply a lack of funds, the BVSRRA contends that the real problem is the fact that the current council has failed to drive the necessary cultural change to achieve improved outcomes.
While the association has been pressing the elected council on the need for cultural reform within council for years, it has consistently shown that it has a “tin ear”, which is probably why, at the end of the day, the MLC report will become just one of many gathering dust on some obscure council bookshelf.
John Richardson
Secretary/Treasurer
Bega Valley Shire Residents & Ratepayers Association
Tel: 0264945669
Email: secretary@begavalleyshireratepayers.asn.au
Website: http://www.begavalleyshireratepayers.asn.au