The Gosford Erina Business Chamber (GEBC) has welcomed the Minister’s announcement of plans to appoint an Administrator to Central Coast Council.
“Where an administrator is appointed, the Council may be suspended for an initial three month period during which time, it is the Chamber’s understanding, a public inquiry will be commenced into the events and matters of the Council,” GEBC President, Rod Dever, said
“The public is calling for action and their outcry over this matter is completely justified.
“Management failure of this magnitude should rightfully be investigated, and the Chamber is 100 per cent supportive of the Minister’s intervention.
Dever said the Mayor’s comments point responsibility to CEO Gary Murphy but the matter “appears to be bigger than one person”.
“The councillors should make it their business to be up to date on the financial position of the Council,” he said.
He said even small not for profit group Boards meet monthly and are required to supply the financial reports of their organisation for review and scrutiny.
“Why would a multi-million dollar operation be exempt from this open and transparent process?” he said.
Meanwhile, a former Council Director has described the situation as “gut wrenching”.
Gary Chestnut, who spent 25 years with Gosford Council as a manager and director, holding the positions of town planner, environment officer, head of the Council’s environment department, which he built from scratch, and development manager, said on ABC radio on October 21 he was “dumbfounded” by the Council’s financial predicament.
“There were always checks and balances in place when I was with Council,” Chestnut said.
“Every month there was an audit on every transaction I was responsible for.
“Sometimes projects go over budget and sometimes they go under.
“But when a project goes over, other projects have to be halted.
“There was a quarterly audit to make sure the books balanced
“I have no idea what has gone on since amalgamation
“When I held a corporate credit card, I had to present a receipt for every transaction and if there was no receipt for a transaction, I was personally responsible.
“Councillors in my day very much had their finger on the pulse; they were very much involved, and any budget allocation was ticked off by them.
“From speaking to the present councillors, it seems they are being excluded or pushed to one side on financial decisions.
“Governance is all about checking the balance.”
How things unfolded
October 6: Central Coast Council advises the Office of Local Government (OLG) that it is in a serious financial situation and faces “an immediate and serious liquidity issue” with an expected deficit of $89M.
Local Government Minister Shelley Hancock responds she has instructed the OLG to appoint an independent financial expert and a human resources adviser to ascertain Council’s true financial position and identify options to address the issues as quickly as possible.
October 8: Council reports CEO, Gary Murphy, and senior executives have been undertaking meetings and conferences with key stakeholders, including the Minister, on a range of measures to include a 100-Day Action Plan to Recovery and a forensic audit of Council’s finances.
October 12: Council announces it will focus on its 100-Day Action Plan to financial recovery, seek State Government assistance and establish a Finance Committee.
An attempted vote of no confidence in CEO Gary Murphy fails to get the numbers.
October 16: Council seeks urgent answers from the Minister on its request for assistance with the financial situation and accuses the Government of abandoning the Coast by not appointing the two promised experts.
October 19: Minister advises Council that she will await an assessment by Council’s Audit, Risk and Improvement Committee and the results of a forensic audit before deciding if the provision of finance and HR experts is warranted.
October 20: Council announces it will once again request Ministerial approval to access restricted funds so it can pay more than 2000 Staff members
October 21: Minister Hancock announces the State Government will provide $6.2M to meet payroll expenses and overdue payments to suppliers. She says she will issue Council with a notice of intention to suspend it and appoint an interim administrator.
How does a council suspension work?
Notice of intention to issue a suspension order will be given and the council will be given no less than 14 days to respond (in urgent circumstances, the response time will be 7 days).
The Notice of Intention should be tabled at an open council meeting and the council should provide its response to the notice of intention by resolution.
The Minister or Chief Executive is required to consider the council’s submission when making a decision.
If a suspension order is to be made it will be published in the Gazette and an interim administrator will be appointed.
The interim administrator will be asked to table the suspension order at an open meeting and publish the order on the council’s website.
During the suspension period, councillors are suspended from office and as such are not entitled to exercise the functions of civic office or receive any fee or other remuneration.
The Division of Local Government will monitor the implementation of suspension orders.
The interim administrator will complete a compliance report on the implementation of any performance improvement order, if one is issued, and/or progress report on the suspension period, if one is required.
Interim administrators are required to prepare a final written report no less than 14 days before the end of a suspension period. Each councillor and the general manager will be advised by the Minister when the suspension period has ended.
Terry Collins