Word has it that the Member for Bega, Andrew Constance, the Minister for Local Government, Shelley Hancock, & the Office of Local Government (OLG) are reluctant to support a review of council’s finances for the period 2018-2019, made by the council itself at its Extraordinary General Meeting on July 13th, 2020.
The call for the limited review was backed by six councillors after they had successfully defeated a motion calling for a wider independent review of council’s financial activities back to 2017, the first year of the current council.
The association finds it extraordinary that five of the six councillors who opposed the broader, independent review, including the former Mayor, Cr Kristy McBain, & the current Mayor, Sharon Tapscott, are said to have acknowledged that they do not understand council’s finances.
The association has been concerned about council’s financial management for many years & last year called-on the OLG to investigate council’s activities following a number of alarming actions by council, including knowingly presenting a false set of financial statements for adoption by council & failing to ensure that council met its statutory obligations.
In response to its call for an investigation, the OLG claimed that the association had provided no evidence in support of its claims. This notwithstanding the fact that the OLG had previously intervened with council & directed it to publish corrected financial statements following complaints by the association about council’s behaviour.
The association’s concerns continued to grow after council deliberately attempted to deceive residents & ratepayers with a dishonest justification for a proposed Special Rate Variation (SRV) to underwrite the shire’s six pools strategy & following its failure to protect the shire’s financial position in 2018-2019 by reporting a full year net operating deficit of $10M & a net operating deficit in its General Fund of $14.1M, without explanation.
With these concerns already aired, further issues concerning the management of council’s cash reserves were raised by council’s former Chief Financial Officer, Lucas Scarpin, in June of this year that resulted in a number of presentations being made by him to council & leading ultimately to council’s EGM in July.
More than a month has passed since the EGM & nothing further has been said by council, the OLG or Mr Constance on the issue.
For his part,
Mr Scarpin has summarised his concerns in a written submission to the
OLG & copied to BVSC &
Mr Constance.
In that summary, which
Mr Scarpin has released publicly, he says:
“In summary, it is my professional opinion that the Bega Valley Shire Council is in the very real position that it has already breached the Local Government Act (NSW) 1993 in relation to its misuse internal restrictions in the 2019 financial year. It has likely breached the LGA in relation to the misuse of its external restrictions (based on the latest information made public) and that BVSC’s own forecasts show that the Council intends to expend all of its cash assets in its General fund, effectively rendering the Council insolvent, by the end of this financial year. I can prove that Council has mismanaged its cash assets in the recent past, present, and will continue into the future.”
Mr Scarpin has made it clear that he believes the position council finds itself in has arisen “through a combination of inexperienced staff and high turnover” that have given rise to “a series of financial missteps that have allowed this issue to grow over the past couple of years to the point now where it is approaching being terminal.”
While the association shares Mr Scarpin’s view to some extent, it also believes that some of the actions of council also suggest that acts of malfeasance or maladministration may have been committed by senior council officials.
The association believes that in the absence of any information to the contrary, the OLG has no alternative but to intervene & conduct a full & transparent review of council’s financial activities from 2017 to-date. The association also believes that if the OLG does not initiate that review, it will have failed the residents & ratepayers of the Bega Valley & will not be deserving of their ongoing confidence.
The association believes that unless confidence in council’s financial management is restored, there may be a reluctance on the part of some quality candidates to contest next year’s council elections.
Finally, the association believes that if Mr Constance does not make it publicly clear that he supports such a review, then he likewise will deserve to suffer the same loss of confidence on the part of residents & ratepayers.
John Richardson
Secretary/Treasurer
Bega Valley Shire Residents & Ratepayers Association
Tel: 0264945669
Email: secretary@begavalleyshireratepayers.asn.au
Website: http://www.begavalleyshireratepayers.asn.au