To the Editor
RE: Your lead article “MidCoast budget blunder of, oops $13 million”, May 2018:
t’s ”oops” again, I regret to inform you. Perusal of the MidCoast Council Quarterly Budget Review Statement for March 2018, shows a variance of $40,007,000 for Other Expenses (General Fund). In this case, the variance is the over-expenditure on just this one item. In budgeting, an item such as “Other Expenses” is usually of low amount, and of little significance as to warrant a proper budget heading. What is striking is that a variance is used to draw the reader’s attention as to a difference, or as its name-say, a variance, so that action is taken when that variance is out-of-limit. This appears not to happen with MCC, yet the variance is more than one-quarter of the total annual expenditure budget, covering all items.
MCC finance has admitted that this error occurred when it consolidated financial figures from four separate legacy financial systems (three merged councils and MidCoast Water) to produce the budget statements. A reader would naturally ask, what other figures and reports are negatively affected?
MCC has committed to deliver merged financial reports from 1st July 2018. Let’s hope that a new merged system will crunch the numbers correctly, and restore confidence in the financial reports issued by MCC.