It is very concerning that Council, at its meeting on 25th August, made the majority decision not to allow scrutiny of the draft financial statements for 2020/2021 by all councillors. Once upon a time, these drafts were discussed and placed on council’s website for the public to examine, if they wished. Now, that step towards transparency has been taken away from the community. Why is that?
I imagine that all councillors would have wanted to see the draft financial statements. The NSW Audit Office focusses on:
- value for money and the appropriate use of public money
- risk identification and mitigation
- good governance and controls
- comprehensive record keeping
- transparency, and
I think that some councillors are under a misconception that it isn’t necessary to have the draft presented to the full council. However, the Office of Local Government’s Code of Accounting and Finance says on page 8 (my emphasis):
“Commentary – Statement by Councillors and Management LGA s.413(2c) Dating and signing of Statement by Councillors and Management LGGR Cl.215
1. The Statement by Councillors and Management must be made in accordance with a resolution of the council and specify the date on which it was made.
2. The Local Government Act requires a council resolution prior to the financial statements being sent to Audit.
3. If there are significant changes between the financial statements referred to audit and the final audited statements, then the council should consider whether it is appropriate for the financial statements to be represented to the elected council again as part of the governance process.
The word “again” in point 3 above indicates unequivocally that financial statements should be considered by all councillors prior to being sent for audit. By passing the resolution they have, those councillors who supported it have abrogated their duty of care and governance to the council and to the ratepayers and would have no leg to stand on if it were subsequently revealed that something had occurred.