Glen Innes Severn Council’s faith in its own management was laid bare at an extraordinary meeting on Thursday, 10 September, when councillors substantially reworked the organisation’s response to a threatened Performance Improvement Order (PIO) from the NSW Government, then moved into a closed session to discuss council staffing.
The meeting had been called to consider Council’s response to the proposed PIO from the Office of Local Government (OLG). Rather than wave through the officer-prepared draft, councillors resolved to adopt an alternative version tabled by Mayor Margot Davis and amended through a Committee of the Whole.
Mayor Davis said the revised approach was meant to give a more complete, evidence-based response to the concerns raised by the Minister and the OLG.
“This is not about pretending there have not been serious problems, because there have been,” Mayor Davis said.
“Council has experienced three consecutive disclaimed audit opinions, significant financial reporting and liquidity challenges, problems arising from the previous financial management system, and broader issues around financial processes, organisational capability and assurance.”
“What Council resolved today was that our response needs to acknowledge those matters honestly, while also accurately showing what has changed, what remains unresolved and what the elected governing body has already done in response.”
Acting Chief Financial Officer Mark Crompton, a very experienced financial manager and local government consultant with some 22 years at Tamworth Regional Council, came out of retirement in March to assist with the complex and challenging situation council found itself in as a result of the system failure. He advised councillors in the meeting of what has been done to fix the situation.
“There has been a lot of work done in the last three months to clean up the the balance sheet from the old system,” Mr Crompton said.
“We are now in a position where every account in the balance sheet has been reconciled.”
“Every balance that was brought forward from the old system, where we couldn’t prove it, has been adjusted and written off,” he said.
“I’m quietly optimistic that we will get a clean audit.”
Mr Crompton said the feedback the council had received on the work done so far had been positive.
“We’ve taken a very pragmatic approach. We could have got lost in the detail, and that’s one of the issues that’s happened in the last three years – stave have got lost in the detail.”
“Taking the pragmatic approach to say the old system is finished, we’re going into a new system, we’ve cleaned up the accounts, I think it puts us into the best position we can possibly be in to get a clean audit and go forward.”
Mayor Davis thanked Mr Crompton for his efforts and acknowledged the stressful nature of the undertaking.
“Thank you, Mark, and I particularly want to acknowledge your time at council and the step change improvement in what has been fixed in the legacy system, as well as the as as the work you’ve done to make sure that the new system is set up correctly, so I want to acknowledge you in particular and the rest of the finance staff,” Mayor Davis said.
“It has been an extraordinary undertaking, and we know that that has been particularly stressful for staff. It’s always a huge undertaking to change a system.”
Mayor Davis said the alternative submission also draws a line between the role of the elected councillors and the operational responsibilities of the council organisation.
“The Office of Local Government confirmed in our meeting this week that references to ‘Council’ in the proposed Order relate to Council as the entity, rather than automatically being a finding against the elected body,” Mayor Davis said.
“The elected governing body does not undertake day-to-day accounting, prepare financial statements, manage the Finance team, undertake reconciliations or implement financial systems.”
“Those operational responsibilities sit within the organisation under the General Manager.”
The General Manager has now been asked to finalise the submission by incorporating the changes and extra information identified by Council, verifying the factual, financial and evidentiary references, and completing administrative and drafting corrections.
Council delegated authority to Mayor Davis to approve the final form of the submission before it is lodged with the Minister for Local Government and the Office of Local Government by 15 September. The finished submission will then be reported back to the September Ordinary Council Meeting so councillors and the community can see the document lodged on Council’s behalf.
Council’s submission will ask that any final decision on the proposed PIO be deferred until the outcome of the 2025–26 external audit is available.
“The audit is not the answer to every issue, but it is a significant piece of independent evidence and it makes sense for the Minister to have that information before making a final determination,” Mayor Davis said.
The alternative response also takes a more cautious line than the officer draft on claims about the new Civica financial system, Finance capability and Council’s cash position.
“Starting a new system, appointing people and reporting stronger unrestricted cash are positive developments, but they are not the same thing as proving that every control, process and capability issue has been resolved,” Mayor Davis said.
“Council is not arguing that no further improvement is required. The real question is whether the proposed Performance Improvement Order adds sufficient value to justify its additional cost and administrative burden, or whether the same outcomes can be achieved through the improvement, reporting and assurance mechanisms already in place and being strengthened.”
“That is why the final submission will distinguish between actions that have been completed, improvements that can be demonstrated, and matters that still require evidence or independent assurance.”
The extent of concern about the officer-prepared draft was reinforced by what followed once the PIO item was dealt with. The meeting moved into an urgent, closed, confidential session to discuss an urgent staffing matter, understood to concern the future of General Manager Bernard Smith.
The otherwise tense meeting with a number of disruptions from the gallery had one moment of levity, courtesy of nature. A blue tongue lizard found its way into the chamber and disrupted proceedings.
“That is the most random thing I’ve ever seen in any council meeting,” Mayor Davis said.
Councillors agreed to let the lizard stay and observe.
Got something you want to say about this story? Have your say on our opinion and comment hub, New England Times Engage