In the earlier articles on this issues relating to the endorsement of work on a new complex in Gordon St were discussed. Now it is time to debunk the furphy arising out of the so-called CHCC’s Transformation to Sustainability (T2S) project.
In the earlier papers issues relating to the endorsement of work on a new complex in Gordon St were discussed. Now it is time to debunk the furphy of arising out of the Transformation to Sustainability (T2S) project.
T2S many will recall was a project to scale back on administrative expenses and lead to a downsizing in employee numbers. By “retiring” some employees for an estimate cost of $1M and recasting the work it was claimed a permanent saving of $4M would accrue. It is not necessary to debate this project. Final figures were not publicly released but rumours indicate the projected budget was grossly inadequate. Irrespective of whether any saving was achieved or not Council assertion is creative accounting.
Somehow an amount is saved and it is then spent. What is left is what you started out with.
This is impossible unless you start with nothing and spend nothing. Then at the end nothing is left and you are back to the sum you first had. Try it using the smallest of amount; one cent. After spending one cent there is nothing left. No matter how hard you try you will not have one cent.
Now primary school students understand this principle. So Councillors why did you not notice this mistake?
To be fair the amount was large $10M: so this must be right. The (paid) employees tell you it is. No. Wrong!
When the T2S project delivered any savings that was it. The specific expense was no longer; it was gone. In future years the person making the budget estimate at Council would not take it into account. It is a ‘one off’. So the team leader, accountant or General Manager would adjust the budget estimate in subsequent years? Any “saving” is available for allocation to other expense budgets. No doubt this was done and it was duly spent. No-one in their right mind would overstate the budget requirement only to transfer it to a reserve account for future use. This is in essence the creation of a ‘slush fund’.
“The King was in his counting house counting out his money” as the old rhyme says.
Should this be the case questions should be asked. Who knew and why was it done? Is there any approval at the highest level, the Council meeting? It should not be done for an unapproved project. It could well flag someone with something to hide. And if it occurred were the Councillors diligent when they checked the budget estimates? If they knowingly sanctioned a slush fund more questions will need to be asked.
No, the $10M was never in the estimates. There is no such saving in reality. It has never been legally transferred to a reserve for future use in the way Council now asserts. No matter how it is looked at it is being ‘highly creative’. And it is going to cost residents more money.
The old rhyme continues. “The queen was in the parlour eating bread and honey”.
It is time for Councillors to be more diligent, to ask questions and to verify the figures. Once money is spent it is not available for re-allocation; once it has been spent it cannot be spent again. It is time to forget the emotional talk and to get back to basics. Answer this question first. Can we afford the current proposed megalith in Gordon Street? Wishful thinking alone will not make it happen.
There are numerous risks associated with this project. One of the biggest risks is the inexperience of those in charge; they have never tackled a project of this size. The people elected to monitor the project are also without experience in a project of this magnitude. Past events show the T2S project failed to meet deadlines. It overran its budget estimates and reporting was “concealed”.
A note to Councillors
Councillors the diagram to the left presents but a few of the major aspects you have to be aware of with a project as complex as this. It is included to show you this is not a brief discussion at a Council meeting. Do you think you need more information? Or will you do as you always do and treat it as commercial in-confidence? And believe what you are told and offer no reasonable review on behalf of the residents?
Councillors you have not started to do the work required. Councillors you are tinkering on the sidelines.
What will be the price should you fail to exert due diligence?
“And down came a black bird and pecked off their noses”.
‘Cob’ was a forensic auditor for Federal and State Governments prior to moving to the Coffs Coast to retire.
Editors Note: The purpose of these four articles by ‘Cob’ is not to argue that Council may need new premises. They probably do. They have been published to highlight that the promised Gordon Street chambers as proposed have every chance of being unaffordable and to become an ongoing problem for ratepayers.
Interestingly a letter from Geelong in today’s Coffs Coast Advocate raises similar points as Cob has after a sizeable CHCC delegation visited Geelong to look at their council chambers recently. See the hard print copy of the Advocate – Wednesday 29 August 2019.
Nevertheless one suspects a former senior CHCC official was right when they said to Outlook; “ If council want their building they will go ahead and have it. Irrespective of sound arguments to the contrary.”