Council acknowledges financial problem followed advice from external auditors

Acting CEO, Rik Hart

Acting Chief Executive Officer of Central Coast Council, Rik Hart, has confirmed that LG Solutions provided an article which analysed Council’s public financial records and the information contributed to the internal investigation surrounding Council’s financial situation.

“It is really important to note that initial investigations and the Administrator’s Interim Report show that there is no evidence of theft or corruption,” Hart said.

“There also is no evidence of staff negligence.

“The historical treatment of restricted cash was in accordance with an Accounting Policy disclosed in Wyong Shire Council and Gosford City Council’s 2016 Annual Financial Statements, following advice from Council’s external auditors.

“Council’s treatment of restricted cash has been in compliance with the Accounting Policy.”

Hart said the Administrator’s Interim Report stated that the newly amalgamated Council clearly did not understand how little money they had at the outset and set about a program of expanded capital works and expanded services for the community that they could not afford.

“This is the real crux of the issue, and what the LG Solutions article also picked up,” Hart said.

“Council had/has funds in the bank, however, the majority of funds were restricted and could not be used how Council had planned.

“What is most concerning now is that the Office of Local Government has just introduced a change to the Accounting Code which means that councils will no longer have to report on their unrestricted funds.

“Without the requirement to report on the full picture of a council’s cash position, we could see the same financial issues being replicated across the state,” Hart said.

Also, a statement from the Office of Local Government (OLG) says that on October 29, 2020, LG Solutions sent its “very simple desktop review” of Central Coast Council’s 2018-2019 audited financial statements to the OLG, Central Coast Council, the Auditor-General and Local Government NSW for information.

“The report was received by OLG and utilised accordingly,” the statement said.

Source:
Media statements, Jan 12
Central Coast Council Acting CEO, Rik Hart
The Office of Local Government

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