Fraud and corruption at Council needs ‘some improvement’. What the heck does that actually mean?!

Last Monday we published a media release by Labor for Coffs Mayoral candidate Tony Judge decrying the state of genuine transparency at the Coffs Harbour City Council.

We, and several other candidates, agreed and we then drew readers attention to an item in last Thursday’s council agenda by way of example. We believe this needs more publicity.

By The Editor and Rob Steurmann

If you want a very recent example of this increasing culture of unaccountable secrecy we give you the very first item on the agenda from last Thursday’s Council Meeting – GM 21/21 Audit and Risk Committee Annual Report.

Executive asks Councillors to ‘note’ it. Whatever that means legally we’re not sure.

But it states who this Committee is and when they met;

Then the report goes on to highlight six areas that need “some improvement: to more generally “improvement” overall (see below).

Great. Excellent. In fact CCO has been highlighting some of these for some time now.

So what specifically in each of these needs work and can be done better and why is that the case you might ask? 

Because we asked ourselves that. 

So click on the attachment link in the Council agenda for last Thursday and……. it’s the already published report from the agenda. Nothing extra or new and also nothing more! 

The unsigned report itself is a textbook example of rote performance devoid of any critical analysis in our opinion.

It requires Council to note the report.  At the same time, it tells readers there are no social impacts, no economic impacts and no options.  And no reasoning is given as to why these six important categories need some improvement, if not more.

One category is Fraud and Corruption. Another relates to Coastal Works. Another is Water and Sewerage long term planning.

Some 43 incidents are listed under headings.  Each group gives a grading such as some improvement. 

But there are no remedial options. And no reasoning!

There at least five potential remedial options that come to mind for us:

  • Do nothing,
  • Do nothing because the number/$ value falls within an unspecified predetermined metric,
  • Strengthen the internal controls,
  • Provide more training, and
  • Do more sample checks to check cost centre codes on the source document.

The report fails to identify the degree of severity or level of deception. Do we need to reduce fraud and corruption? If so why and how? We presume Council doesn’t want more. Heaven forbid! But it’s not spelt out clearly and precisely.

Then, it seems as if by magic, Council will ‘note’ the report and the issues will vanish.

Is this good enough?

What is the potential to recover monies from fraud of corruption?

Is this a full listing or will more incidents arise?

Do residents want the rate of fraud and corruption to improve (it is after all ambiguous)?

Why is none of this available publicly via the agenda attachment?

Please do not think too hard Council – it is only resident’s money after all!

Are your ‘alarm bells’ ringing? Ours are!

________

Last Thursday’s Council agenda can be found here; https://www.coffsharbour.nsw.gov.au/Your-Council/About-Council/Council-meetings/Council-meeting-minutes-and-agendas

13 thoughts on “Fraud and corruption at Council needs ‘some improvement’. What the heck does that actually mean?!

  1. If an organisation is trying to hide something there are a number of simple things which can be done:
    1. Set up a formal inquiry, or better yet, several inquiries each dealing with one small aspect of the issue in question, setting out the broadest, or narrowest, possible terms of reference, and staffed by people who already know what the desired outcome of the inquiry should be. Set a date for conclusion of the inquiries which is at least six months into the future, by which time everyone will have forgotten about the original issue, and moved on to another problem.
    2. Create a mountain of paperwork, some of it actually related to a cursory investigation of the issue in question. This documentation should be prepared by people who are skilled in the art of obfuscation, and who know the value of using technical language and specifications, when it comes to concealing relevant information. These people should have been subjected to intensive training, which involves watching every episode of “Yes, Minister” and “Yes, Prime Minister”, several times each.
    3. Employ the Morrison Technique, which involves the outright denial of the fact that an issue even exists.

  2. Limiting it only to NSW, my reading of the common use of the term that ‘Council notes a report’ or ‘notes’ any other ‘item’ presented in chambers under that term serves as a managerial device which secures for that item at that time and place the clear and open knowledge, comprehension and understanding (of the item’s significance and consequence) of councillors who vote to note it.

    It serves as a stake in the ground. “You – councillors and public – have been given this information or advice at this point in time and anything this council does from this time onward is done with your full knowledge, understanding and agreement.”

    In other words it seems, and probably is legally, a way that management declares its position, it contends, ‘openly and honestly’, such that they’re not doing things in secret, with the governing body as representative of the LGA now wholly complicit in whatever happens from that point on, and — if the majority votes to note it — is agreeble to what management has done.

    On the one hand then the public through its representatives are supposedly fully aware of what management is doing, and by that majority, vote in agreement. On the other, it shifts much (all, legally?) blame onto the governing body should anything about it or because of it go wrong.

    Time and again for years CCO has raised hair-raising concerns placed on record, with extensive analyses and reasoning, with sufficient lead time for councillors to get a grip with the issue.

    Yet that item then sails on through the meeting, in six seconds, no discussion agreed unanimously.

    A lot of that appears as convention: trust management, get that item through without question, move onto the DAs or other items that are more commonly accepted as being the governing body’s job.

    It probably happens all around the country. What it does do, however, is highlight instantly exactly how on the ball councillors are. Again, statewide, not very.

    It’s no joke that dogs are being wagged by the tail, all over the place. When a forklift arrives on a councillor’s doorstep, loaded with papers to read, for every meeting, you can see how the laughing enclave in various five star luxury resorts serves itself a vodka shot as local council executives (and select, ‘initiated’ mayors and deputy mayors) inform each other of the you-beaut ways to hoodwink a council and get their way. All with “full public knowledge and agreement” and a terrific little blame-shift.

    Want that property C.ex? No problem, leave it to us. Cheers.

    On the specific matters raised, now, by CCO the logical question is: So who’s going to do something about it?

    Let’s take a snapshot of the state of play with candidates now. That same “sail on through” and “trust management” is strong and clear in some quarters while campaigning for election as your representative, and, crazily, by existing councillors toting themselves to be mayor. We’re allowed to be tough. It’s not good enough.

    This election in large part is about having learned lessons. By and large, with minimal blessed exception, those lessons haven’t been shown to have been learned.

  3. How does this opinion piece fit with “State Gov Auditors give big tick to Council financial performance”
    NOTA 12/11.

    Editor: Good question. Because the Committee report referred to doesn’t relate to financial matters as presented in the accounts?

    1. Hi, Brigit. You’re back. No doubt the electoral whirl has had you very busy.
      I’ve been trying for some time to contact you via your usual Facebook sites, but you must not have found my posts or you would surely have responded, given the critical nature of my correspondence.
      I think that it’s essential that, as a candidate for election, you are given the opportunity to respond to numerous allegations that you are prone to using quite strident written and verbal abuse towards people who disagree with you, via media forums and in public.
      If these allegations are true, then I suspect you must surely be aware of the difficulties which you may face in managing the rough and tumble of Council meetings?

      So that you can take the opportunity to respond to your critics, I have copied the questions which I have posed previously (Editor: Slightly changed by me) , here:

      1. Given that “Advocates for Advancement”, a society open only to selected members, and of which I understand you are a founding member, is likely to have views on the management of council affairs, will you, if elected to council, speak and act as an independent Councillor, or as a member of the organisation, “Advocates for Advancement”?
      2. Do you have a political, or other, alliance with social media commentator, and, I understand, fellow founding member of “Advocates for Advancement”, Karen Lagalla? If yes, what is the nature of that alliance?
      3. To what extent, if any, will you be influenced in your political decision-making by your association with Ms Lagalla?
      4. Have either you or Ms Lagalla been accused of levelling abuse via social media sites, at people who oppose your expressed views, or those of “Advocates for Advancement”, to the extent that the views of that organisation, which is closed to public scrutiny, have been revealed to the public?
      5. If the answer to Question 4 is yes, do you are innocent of the behaviour of which you have been accused? If so why?
      6. Have either you or Ms Lagalla been accused of levelling abuse in public situations, such as council meetings and/or demonstrations, at people who oppose your expressed views, or those of “Advocates for Advancement”, to the extent that those views have been revealed to the public?
      7. If the answer to Question 6 is yes, do you believe have you are innnocent of the behaviour of which you have been accused? If so why?
      8. Have you been blocked from participation in any social media sites, or had your comments edited by managers of those sites, in order to avoid potential suits for defamation?
      9. Has your fellow founding member of “Advocates for Advancement”, Karen Lagalla been subject to the same social media restrictions for the same reasons?
      10. In the event that Cr Sally Townley, upon whose election team you are running, is elected Mayor, will you be prepared to oppose Cr Townley, if such opposition is warranted in the support of the Coffs Harbour community?
      11. Why have you chosen to nominate for election?
      12. Why have you chosen to nominate for election as part of Cr Townley’s team, rather than as an independent person?

    2. I think an external Audit by the auditor general is probably enough unless of course you are criticising the auditor general?

      External audit, or financial audit, is an independent examination and opinion of a council’s financial statements, and whether the council is complying with accounting standards, laws and regulations.

      The Local Government Act 1993 requires each council to have their annual financial reports externally audited by the NSW Auditor-General so that the community and councillors have access to an independent opinion on its’ validity. The NSW Audit Office conducts these audits on behalf of the NSW Auditor-General.

      Since 2017, the NSW Auditor-General has also reported to the NSW Parliament each year on local government sector-wide matters arising from the examination of financial statements of councils and any other issues that the Auditor-General has identified.

      Editor: Brigit, if you read the Auditor General’s small print comments above the sign off on each annual audit report you’ll see that they explain they are auditing that the correct *procedures* have been followed.

      They do *not* carry out a line by line ‘forensic audit’.

      It would be impossible for them to do so given the number of LGA’s and State statutory bodies they have audit responsibility for. However, on occasions they do random forensic audits usually as the result of being given some information they think needs verification.

      Needless to say, given the above, we are not criticising the Auditor General. In fact we believe they would be ideal to carry out an independent forensic audit, both financial and operational.

      Given you are a candidate on Cr Townley’s ticket are we right to infer this team doesn’t support CCO’s three points for a new Council? And if so why? After all if everything is ‘above board’ what is there to fear?

      1. Why is it I suspect that Sally’s attendance at less than 50% of the Committee meetings in this instance might have something do with ‘your’ comments here?

  4. Brigit you are so right – a ‘textbook warrior’ trusting in the universal adherence to the rules. You are so right that you are, in fact, wrong.

    Every auditor will cover their findings and opinions with disclaimers. This is true of the CHCC accounts. There are pages of disclaimers and footnotes. This does not mean the accounts are right in every respect. More often than not, the auditor emphasises the limited scope of the audit. They checked out the process but not the content because to do so requires massive resources. The audit is therefore qualified.

    Take for example the recent case involving WESTPAC who, after years of external audits, were found to be massively in breach of a legislative requirements. Money transfers above a specified amount were not reported to the regulatory authority as required. The final outcome saw some on the Board lose their positions.

    Yet initial ‘independent’ audits indicated no such problems at WESTPAC time and time again.

    So Brigit, when the qualified report is presented to Council with disclaimers, what happens next? Council was to note the report but who then addresses the auditors concerns and by when?

    A process audit will not detect , among other things:-

    ghosts on the payroll,
    interposed service entities,
    misdirected expenditure, and/or
    proper classification of capital and revenue.

    I believe I might have a bit more experience in forensic auditing than you. As a professional investigator of long standing to receive a case such as a CHCC *forensic* audit report and the subsequent inactivity would be sheer bliss. It comes with an almost guaranteed result!

    In the case in question the best body to deal to dig deeper is the NSW Auditor’s Office. I suppose it may have escaped your notice that this is exactly what is happening?

    Their last report looking at the CHCC audit committee, with still more to come, revealed 43 potential breaches!

    It might be time to be bit more ‘worldly’ Bridget. Maybe put away the text book. But if not then I suggest you perhaps go back and re-read the initial chapter in any recognised audit text book.

    1. Rob, might this be a case of someone who has little knowledge, making dangerous assumptions? It would be hoped that a candidate for election to this same council would already be preparing herself for the task of discovering truth, rather than assuming that everything in the garden is rosy.

    2. So if all this is true why hasn’t any news media picked it up and run with it? You are just preaching to the converted here.

      Editor: The WESTPAC story and issues around the audits associated with it received not only much media coverage but was also covered by the Royal Commission into Banking and Finance, which again, in turn, received wide media coverage.

      But here’s a quick way to check who is right here, Brigit, Rob and/or I. I invite other readers to go to any audited accounts on any CHCC agenda and to read the words above where the Auditor’s Office, or other auditor, signs off.

      1. Brigit, you must have missed the set of questions included in the comments above.

        I know that you’d have answered them, had you seen them, because they give you a perfect opportunity to refute the comments, made by numerous individuals, regarding your past public behaviours. If those comments are untrue, perhaps a cynical attempt at a smear campaign against you, please tell us so. Your voice needs to be heard on this matter.

        It’s vital that anyone who may be considering voting for Cr Townley’s team, or for you as an individual candidate, can be sure that they are supporting someone whose public behaviour is beyond reproach.

        I’m sure that you’ll respond to those questions a.s.a.p., and I look forward to reading your replies.

      2. You are out of your depth Brigit. Your every utterance exposes not only your deficiency as a commentator but your unsuitability as a potential Councillor. If you and your team don’t get this how do you expect the community to feel that you represent them and not the Council executive?

      3. Brigit it’s not newsworthy because each and every day of the working week, day in and day out, hundreds and hundreds of private and public audit reports are signed off with the disclaimers both Rob and the Editor refer to.

        Yesterday I did as the Editor suggested and checked the sign off pages of auditors on Council accounts on CHCC meeting agendas. I did so randomly of CHCC meeting agendas over the past three years.

        And guess what? There are bog standard disclaimers not only on them but also footnotes aligned to the final disclaimers are all the way through them too!

        Little Charlie is right about you in my humble opinion.

        1. Without diminishing the veracity of your comment I’m dying to see one of those “pubic” audit reports you have been reading? 😊😊

          Editor: Doh! That one escaped my not so ‘eagle eye’! 😉

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