Council Finance Manager Admits Ignorance on $48 Million Budget Expenditure

An article in this week’s Sentinel Times (page 7) called “Rate relief Plan Misses the Mark” discusses the two circulating petitions from Matt Sherry calling for a zero rate rise in this year’s budget and a second unrelated petition from Don Hill calling for an $800 refund to all ratepayers for this year.

The article quotes the Acting Council Finance Manager, Mr Allan Williams, as saying that he agreed with the figures quoted by Don Hill on the cost to Council of between $10 and $16 Million. He further went on to say that “Council was unsure of where Mr Hill believes an additional $48 Million of expenditure has been added to the 2019/20 budget”.

A question tabled at the February Council meeting by a Gus Blauuw of Venus Bay reads as follows:

“Can Council confirm that the Administrators approved in the 2019/20 budget (July 2019) an increase in the total spend in the 15 year capital works budget for the years 2019/20 to 2032/33 from $292 Million to $340 Million, an increase of $48 Million?”

The response from Council and printed in the minutes of that Council Meeting reads as follows:

“Yes, the 15-year LTFP showed an increase in capital expenditure for the years 2019/20 to 2032/33 from $292 Million to $340 Million, an increase of $48 Million.”

Further to this, when the CEO was interviewed by this newspaper on 28th April 2020, she indicated that she was aware of the $48 Million. She stated that she believed it was for a series of major projects over time and she presumed it was investing in significant capital works projects for the community but she was not sure “right now” what it was raised for.

It is quite understandable that the CEO was not aware of detail on a question without notice. The real question might be why such information had not been given to the new CEO in internal briefings.

So, the Finance Manager is unaware of, the CEO is aware of, but who else is aware of the $48 Million.

This newspaper is unaware of anyone in Council being aware of what it is for, or rather, what is it to be spent upon. The CEO did say she would get back to this newspaper with the information but to date this has not occurred.

Further investigation of what or where these funds originate from leads to a very worrying discovery. 

$9.8 Million is acknowledged as being for carry over capital works that had not been completed the previous year. A further amount of $30 Million had been included in the 2019/20 budget along with $2.9 Million for a project called “Office Refurbishment Stage One”. 

The budget line item is “C_73710 Buildings – Office Refurbishment Stage One” and can be located on page 77 of the approved Council Budget for 2019/20 and available on the Council website.

Both these line items were added into the 2019/20 budget document approved of by the Administrators AFTER the public consultation process. This means that the public were unaware of these items when they submitted their submissions to the s223 process and therefore could not possibly have made comment on them. 

The local government act states that the budget documents must go through the s223 process. Further material changes to the budget must go back to the public for a second s223 process. This did not occur and represents what must be a serious governance issue if officers can unilaterally with no public scrutiny just “at their discretion” add 15% of the 15-year capital works expenditure into the budget off their own bat. That makes a sham of the whole consultation process and the Governments Rules surrounding good governance.

It is observed that these details are not able to be seen in the current proposed budget document out for consultation. As such, they will never have been shown to the ratepayers in a s223 process. Never. That is an issue of transparency and appears to be somewhat lacking in this instance.

The CEO also confirmed in her interview of 28th April 2020, that Council reduced the 15-year capital works program by $18 Million for the current budget.

This paper suggests that of the $48 Million added last year, $20.2 Million remains and is still unrequired or accounted for actual projects. As such, the cost for the $800 per ratepayer refund is possible.

As to how this would be done exactly that would need someone to look at the program and make the necessary adjustments after first locating the $48 Million. This is all possible from viewing the document on Council’s website.

It is also a concern that the detail shown on last year’s budget document is no longer able to be seen in this year’s budget documents. This information is now hidden from public scrutiny and it would be impossible for anyone from the public to have discovered this matter without looking at past documents before they were made hidden from public view..