On October 30th, 2019, in one of its more notorious meetings, council resolved that council management could effectively ignore requests from the association for information relating to council’s financial affairs.
Eight months later, council has treated all residents & ratepayers with absolute contempt by effectively ignoring all requests for information from the association, including requests for financial information pertaining to the draft Long Term Financial Plan & Operational Plan & Budget 2020-2021, recently on Public Exhibition.
Coincidental to the above, the association commenced a dialogue with council’s former Chief Financial Officer (CFO), Lucas Scarpin, in an effort to improve its own understanding of council’s finances. It was through this dialogue that concerns were aroused around the status of council’s cash reserves.
Mr Scarpin suggested that he could raise these concerns directly with council in the first instance & the association agreed. Subsequently Crs Nadin & Bain called for an Extraordinary General Meeting (EGM) of council to consider their call for council to initiate an independent audit of council’s financial standing, in particular due to potential ramifications for council’s financial plans currently on exhibition.
The association understands that after last week’s EGM was scheduled, Mr Scarpin sought permission to address council but that permission was refused. The association further understands that Mr Scarpin offered to provide council with a video presentation detailing the basis of his concerns & that this was agreed to by council.
Further, the association understands that Mr Scarpin was invited to attend a meeting with a number of councillors the day before the EGM to detail the basis of his concerns (Crs Tapscott, McBain & Fitzpatrick).
When the EGM meeting commenced, the Mayor informed the meeting that Mr Scarpin had submitted a report to council regarding his concerns over the management of council’s cash reserves. Further, the Mayor confirmed that a meeting had been held with Mr Scarpin the previous day. The Mayor concluded by saying that:
“At the conclusion of the meeting, Mr Scarpin indicated that he was confident that council was aware of the issues & challenges before it & had commenced implementing actions to address these issues.”
Mr Scarpin has advised the association that he disagrees with the Mayor’s statement, confirming that he had detailed the basis of his concerns to the councillors with whom he had met & that he had been led to believe that a solution to the problem that he believes is confronting council was to be presented to the EGM the following day.
At that point,
Crs Allen & Bain confirmed that they were unaware of
Mr Scarpin’s submission. The
Mayor then suggested that councillors view the video presentation provided by
Mr Scarpin (
Mr Scarpin's video presentation can be viewed here, a
s the quality of the video published by council on its website as part of its EGM is almost inaudible).
The original motion calling for an independent audit of council’s financial position was unsuccessful after Cr Fitzpatrick foreshadowed an alternate process recommending that the Office of Local Government (OLG) be requested to fund a review of council’s finances in conjunction with the NSW Audit Office.
While the association applauds Mr Scarpin’s efforts to bring a significant risk for council to its attention, it appears those efforts may have been in vain.
As for council’s resolution, the association wishes to make it clear that it has absolutely no confidence in the OLG to effectively investigate & resolve this issue.
When the association has previously raised issues of financial irregularities with the OLG & the Minister for Local Government, its concerns were dismissed on the basis that it had provided “no evidence”, notwithstanding that the issues were all on the public record, including:
• knowingly presenting a false set of financial statements for adoption by council;
• failing to ensure that council met its statutory obligations;
• deliberately attempting to deceive residents & ratepayers with a dishonest justification for a proposed Special Rate Variation (SRV) to underwrite the shire’s six pools strategy; &
• failing 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.
As far as the association is concerned, the primary purpose of the OLG appears to be little more than to run a “protection racket” for what passes as council management, aiding & abetting council’s efforts to avoid accountability for its failure to meet its legal obligations in accordance with the NSW Local Government Act 1993.
It is the view of the association that the failure of the Office of Local Government (OLG) to investigate council’s behaviour or to consider appointing an Administrator, makes it complicit in any wrongful actions on the part of council.
The association believes that the persistent efforts of council to characterise these latest concerns over council’s finances as being no more than “administrative errors” should act as a “red flag” to all 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