The new era of transparency about Council finances (see Council to take a new approach to managing its finances) has resulted in an Extraordinary Meeting of Kiama Council being held today to endorse correspondence with key agencies, note an incorrect transfer of funds and research work into loan resolutions.

An extraordinary meeting was needed as Council's CEO Jane Stroud wanted councillors to endorse a report requested by TCorp, Council’s State Government financier, which needed to be lodged today.

The Business Papers say the report was responding to a request by TCorp, by ‘outlining Council’s current financial position, restorative actions and acknowledgement of previous deficiencies in financial reporting and transparency. Council has also agreed to keep TCorp informed of its progress on the long term financial plan as a priority.’

The CEO stressed to councillors that Council is up-to-date in its commitments, and that TCorp is confident in Council’s ability to repay its loans, which at end of June amounted to $48,840,227 ($45,000,000 of which relates to Blue Haven Bonaira).

In addition, the Meeting was also used to make councillors aware of the finding that $1 million had been moved from internally restricted reserves into the operational accounts, without the necessary Council resolution.

Given that finding of ‘an administrative error’, staff are now undertaking a full review into the current reserves, both internal and external, held by Council to see if there have been any other breaches of accounting standards.

“I’ve said before that I am committed to openness and transparency about financial matters of Council, and today’s report is a continuation of that commitment,” says Ms Stroud.

“As we continue to research and review, it is possible other issues may come to light. The important thing for all of us is to focus on the path towards financial sustainability and take decisive steps to correct errors when and where found.”

The report for the meeting also noted a review is being undertaken to ensure that all the required resolutions for signing and entering into loan agreements have been undertaken. This follows the finding that one loan was only partially approved.

Mayor Mark Honey says, “We’re pleased this issue has been brought to our attention. We are more than happy to meet outside of our usual round of meetings to endorse the required correspondence and deal with this issue. We’re glad our CEO and CFO are focused on resolving the matter as quickly as possible.” 

Councillors were also told in detail of additional steps that staff have taken to improve financial reporting and management practices, including the release of a working draft of the Financial Sustainability Plan.