Two councillors have requested an extraordinary meeting of council take place as soon as possible to discuss council's finances with a view to getting an independent assessment of its position.
The News Weekly understands that a written request was handed into council offices on Tuesday afternoon signed by Crs Mitchell Nadin and Robyn Bain.
The move follows questions about the finances on Wednesday, June 24 at the last council meeting where inconsistencies were flagged in the reporting of cash reserves.
The cash reserve figures at the end of financial year 2018/19, and the figures used as the starting point for the financial year 2019/20, noted in the March 2020 quarterly reports, are different even though they both purport to be figures at June 30, 2019.
Although the sum of the three cash reserves - restricted external, restricted internal and unrestricted cash - is the same in all documents, the amounts in each reserve vary. In the audited accounts of 2018/19, for example the unrestricted cash (at June 30 2019) is zero, but by March 2020 the figures for June 30, 2019 show the unrestricted cash reserve had grown to $13m. In the December 2019 quarterly figures it was shown as $19.35m.
The audited figures at June 30, 2019 are correct but we are investigating the quarterly budget figures.Council's general manager Leanne Barnes
The "actual June 30 2019" figure shown in the March quarter (and previous quarters) is the starting point for the year 19/20 and should reflect the audited accounts of June 30, 2019 which council's general manager Leanne Barnes has confirmed are correct.
"The audited figures at June 30, 2019 are correct but we are investigating the quarterly budget figures," Ms Barnes said. She was keen to stress that there had been "no misappropriation of funds". Councils are not permitted to transfer cash from externally restricted reserves into their unrestricted reserve.
Ms Barnes said accounts staff had been working through the weekend to find the reason for the figures "anomaly" and said council planned to discuss the matter with councillors at the first of three financial briefings in July.
It therefore follows that if the audited figures are correct, the differing figures used in the December 2019 and March 2020 quarterly reviews are incorrect. These incorrect figures have been used to inform the 2019/20 budget. They influence the plan for 2020/21 and ultimately affect the long-term financial plan.
The acknowledgement that the audited figures are correct brings to the fore the current state of council's unrestricted cash reserves. If there was zero at June 30, 2019 and - according to March 2020 projections to June 30, 2020 - over $12m was to be spent from the reserve, it follows that the reserve is not in great shape. Cr Robyn Bain asked on what over $12m had been spent.
There are also questions about how council starts the year 2020/21 with a $12m spend from a zero balance and what this means for the current set of financial documents on public exhibition.
Figures in council's financial statement appear to show inconsistencies to the cash flow of externally restricted funds, internally restricted funds and unrestricted funds, resulting from a comparison between the 2018/19 audit and the budget predictions and expenditure in the quarterly reports for the 19/20 financial year.Crs Mitchell Nadin and Robyn Bain
Crs Nadin and Bain have requested that the extra ordinary meeting is held "as soon as is practicable", but ideally on Wednesday July 8, 2020, to urgently consider the following business: "That council obtain, as a matter of urgency, an independent assessment of council's present financial position (as at 30/6/20) prior to final annual audit so as to ground-truth a sound future financial commitment in its Long Term Financial Plan, Resourcing Strategy, Delivery and Operational plan for 20/21 financial year (now commenced).
They have asked that the assessment includes expenditure of all restricted and unrestricted funds and "involve where necessary, a forensic audit for financial years 2017, 2018, 2019 and 2020".
The councillors said the figures in council's financial statement "appear to show inconsistencies to the cash flow of externally restricted funds, internally restricted funds and unrestricted funds, resulting from a comparison between the 2018/19 audit and the budget predictions and expenditure in the quarterly reports for the 19/20 financial year".
"Given the fact that council's draft budget is currently on public exhibition, with expected continuing deficits in coming years and proposals to apply for a special rate increase, it is in the public interest to ground-truth council's actual current financial position in all funds and investment accounts as a matter of urgency.
"It is important the public and councillors can have confidence in council's handling of public finances," Crs Nadin and Bain said.