Does this pass ‘the pub test’?

An eagle eyed CCO reader has been going over the Coffs Harbour City Council’s (CHCC) accounts recently and has come across some interesting information.

The information relates to the 2017/18 financial statements from the annual report.

By The Editor

Before going any further CCO must stress that after due diligence we don’t believe what we are about to present is illegal in any way.

We believe it is within Council’s procurement processes and within the guidelines of the Local Government Act.

We do however wonder if most residents and ratepayers would consider what follows to be a fair and efficient use of their monies given other potential competitors exist in the local market.

In lay person’s terms we wonder if this would pass ‘the pub test’?

Key Management Personnel (KMP) transactions 2017-18

Each year councils in NSW are required to explain expenditures over and above salaries that relate to KMP’s. A KMP is someone who is a Mayor, Councillor, senior manager or senior staff.

On numbered page 81 (pg 83 of 149 if you are using the scroll bar) of the 2017/18 Annual Report – Section 3 – Annual Financial Statements there are two transactions for the supply of hire vehicles.

2017 states hire vehicles to the value of $66,000 were rented while 2018 records hire vehicles rented in that part of the financial year amounted to $101,499. That is a combined total of $167,499.

Footnote Number 1 then goes on to state (our emphasis added);

“Council hired vehicles for use during the year from Thrifty Car and Truck Rental, a company which has a member of Council’s KMP as a Director. Amounts were billed on normal hire rates and were due and payable under normal payment terms following the Council’s procurement processes.”

The specific page in question

So what do you think?

Does this pass what you would would consider what follows to be a fair use of their monies given other competitors exist in the local market?

Here is the ‘pub test’ defined on You Tube;

Does what we have laid out above pass your pub test?

We at CCO have our own doubts as to whether it does.

The NSW State Government Audit Office interestingly also put the following rider on their audit statement;

The full set of accounts referred to above can be found here; https://www.coffsharbour.nsw.gov.au/Your-Council/Our-Responsibilities/Documents/Corporate%20Planning%20and%20Reporting/Att3%202017-18%20Annual%20Report%20Section%203%20-%20Annual%20Financial%20Statements%20-%20reduced%20-%20rotated%20pages.pdf

5 thoughts on “Does this pass ‘the pub test’?

  1. No, it most certainly does not pass the pub test. An individual in a decision-making position within a Council which is procuring goods and/or services from a company of which this individual is Director stinks to high heaven.

    In my view it’s “the Game of Mates” through and through and the ratepayer loses.

  2. Given the large amount of council funds paid to hire the vehicles at commercial rates, were other local car/truck hire companies invited to tender for the supply of vehicles to ensure council funds were spent in the most efficient manner?

    Ratepayers wouldn’t have been aware of this arrangement unless they spotted council workers undertaking work in Thrifty vehicles and could make the KMP/Thrifty franchisee connection. After all, not many go through council annual accounts with a fine tooth comb. Just another example of the opacity of the current council.

    Was the Thrifty kiosk at the airport still owned by the “KMP” when decisions were being made and voted on during the lead up to leasing the airport? Wouldn’t this also amount to a conflict of interest?

    Editor: CCO understands the Coffs Harbour Thrifty franchise was sold in July 2019.

    1. “[..] were other local car/truck hire companies invited to tender for the supply of vehicles [..]?”

      That’s the sharp end to it, CLB. Were other hire companies contacted at all? If not, and along with the perception of the CBD conflict of interests opined by many (most?) in the community, Council has a case to answer.

      It’d be interesting to hear the tone of voice until now oozing out from council public officers if under an ICAC investigation. It’d do them all good.

    2. Reply to Editor: The following link to an “Inframation” article shows discussions to privatise the airport by council were underway as early as December, 2018. Did the KMP need to excuse themselves from these discussions because of their financial interest?

      https://www.inframationgroup.com/australias-coffs-harbour-airport-tender-within-three-months

      Furthermore, according to the article the decision to proceed with the privatisation and call for expressions of interest was made prior to 2 August 2019, just days after the date you have provided that the local Thrifty franchise changed hands. An answer should be sought from Council as to whether the KMP contributed to any discussions or decisions.

  3. Corruption in Local Government has prospered under the LG Act of 1993 in my opinion.

    I served 42 years in LG under the Act of 1919 (as amended). The accountability disciplines exacted in that era were extreme, but scrupulously honest. When the State delegated greater authority to LG’s it did not take long for what could arguably be called corruption to appear under the more casual accounting practices.

    If left undisciplined, greed knows no bounds!

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