In Part One of this series of articles:
We covered a lot of background material that has lead to the current state of affairs concerning Port Stephens Council’s financial accountability.
In Part Two of this series:
We report on the reaction of the Council and the Government to our submissions on the proposal to declassify and remove all Business Units fro the Annual Accounts:
In Part Three of this series:
We report That despite our submissions and the Government concerns the Council is proceeding down the path of non transparency in its business affairs.
TRRA inc. could be accused about being a little paranoid about Our Council being transparent and accountable to their ratepayers, but we remember what happened not all that long ago when the Business Unit accounting got mixed into the general accounts at Port Stephens Council. This resulted in what we described in detail in Part 1 of this series, as the Deloitte audit into the management of the Crown Holiday parks and the 2 year resultant freeze on the trust accounts. It was also when the Samurai Resort debacle gradually morphed into a 17 Mil disaster that no one knew about. It took TRRA two and a half years to extract that audit from the Council using Freedom of Information laws. It appears that no lessons were learned.
All we are asking for now is the same standard of reporting that other Councils in NSW provide, (we have looked at Newcastle, Wyong etc.) A simple set of audited profit and loss statements that show the detail of how each Business Unit is performing, so that the situation described above never happens again. If even half of what is coming out of the spin department at Council in the constant press releases we receive, printed faithfully by the Examiner, is correct they should be really proud of these documents and want to share them with everyone.
When we drew this to the attention of the Government they sent some people up last December and Council was told to produce a set of Special Purpose Accounts for 2013/14 and undertook to produce these audited accounts early this year,
TRRA Inc. contacted Councils Financial Officer Tim Hazel to make sure that these accounts were presented promptly and contained all the data that we require, not aggregated figures ie;
- Separate, audited Financial Statements for each of the Council’s Business Units. There should be no expense or problem in producing these accounts assuming that they exist. If they don’t already exist we are even more concerned!
- TRRA would expect that PSC would, in the interests of its own prudent commercial practice, produce separate Annual Financial Statements for each of its business units and submit these to their auditor. We would expect the auditor to insist that they do this.
- Council’s executive, all Councillors and the community at large should have the opportunity to scrutinize the performance of each Business Unit to ensure that it is making a worthwhile contribution to the financial viability of the Council as a whole and if not, to ask why
- Council has previously determined under the various guidelines to classify the following activities as a “Category 2 business”.
- Property Development
- Holiday Parks
- Civil works
- Newcastle Airport
The Council presented Item 6, another motion at its 10 March 2015 meeting to declassify the Property Development, Holiday Parks Civil Works and Newcastle Airport Business Units effective from 2014/15.
They attached a set of Special Accounts as required by the Government but lumped everything into 4 categories Civil Works, Property Development Holiday Parks and Newcastle Airport. This effectively aggregated all the Holiday Parks in together instead of showing them as separate businesses to allow analysis of performance, borrowings or any meaningful comparison. We suspect that some of them are going well, probably some of them not very well at all but with this level of accountability and transparency we will never know.
Council Minutes 10 March 2014: Item 6 Removal Of Business Units
TRRA Letter To Councillors 10 March 2015: Item 6 – Removal Of Business Units
Newcastle Herald 10 March 2015: Port Council Financial Report Changes On Hold
Council Minutes 14 April 2015: Re Item 10 Removal Of Business Units
TRRA Letter To Councillors 14 April 2015: Re Item 10: Removal Of Business Units
Council Minutes 14 Apri 2015l: Attachment 1 – Holiday Parks and Investment Property Report 2014-15
Council Website: Presentation of Special Purpose Financial Statements
Council Website: Special Purpose Financial Statements 2013 – 2014