Independent councillor John Church has accused Newcastle City Council leaders of concealing an annual budget “overrun” by not disclosing monthly financial performance numbers for June.
Cr Church issued a media release on Friday questioning why the council has withheld a June financial report from councillors, in breach of a 2012 resolution to provide figures every month.
“I suspect the report will reveal a multimillion overrun in unbudgeted expenditure that the CEO or lord mayor would prefer was not made public,” he said.
In a later interview with the Newcastle Herald, he said: “I suspect part of the budget overrun is due to work preparing Newcastle for Supercars. I don’t have a problem with that; I just wish the administration would let the people of Newcastle know that fact.”
Lord mayor Nuatali Nelmes hit back, describing Cr Church, who was elected last year, as an “L-plate councillor” whose media release was “not based in fact”.
“Under Labor, the City of Newcastle has posted strong and consistent budget surpluses while investing record amounts into building the infrastructure that this city deserves while protecting jobs and services,” she said.
“Cr Church, like every councillor, has been provided with our preliminary end-of-June financial position, which I’m pleased to report indicated another projected budget surplus for the city.”
The June report would include a year-to-date financial position which can be interpreted as a preliminary end-of-year figure.
The Herald understands the council will record a budget surplus of more than $1 million for 2017-18, $3 million below the $4.8 million surplus forecast at the start of the financial year.
Council chief executive officer Jeremy Bath issued a statement on Friday afternoon saying a preliminary end-of-year result had been shared with Cr Church and other councillors at a workshop on August 14.
“His claim we have refused to release the figures is baffling and incorrect,” he said.
“It serves no purpose to issue to councillors and the public an end-of-June financial position in July which will not be accurate given we are only then commencing the end-of-year auditing process and which takes more than two months to complete.”
The statement, under the heading “False claims made about Council financial statements”, said the council continued to receive invoices in the first few weeks of July for the previous financial year and a June 30 figure issued in July would likely be incorrect by millions of dollars.
It said the council’s net operating result would be officially reported to councillors at their October meeting once the Audit Office of NSW had issued its independent report on the end-of-year financial statements.
Cr Church said he was not asking for the council’s end-of-year financial position but simply the monthly June report, as per the 2012 council resolution.
You have to ask the question why? What is it they are hiding?- Cr John Church
“Unless they address the issue, it’s all just politics and spin,” he said.
“I have asked for these June figures to be provided by contacting the CEO directly, raised the matter in the chamber and in a councillor workshop.
“Despite having expressed my concerns in the strongest terms, this administration has refused to release the figures.
“Financial oversight is one of the core responsibilities of councillors, a role which is impossible to discharge without financial information being provided in a timely manner.
“You have to ask the question why? What is it they are hiding?”
Cr Church and Cr Kath Elliott (Ind) have raised concerns at recent council meetings about the lack of a June report.
The council also withheld the June figures last year.
A report to go to councillors next week recommends they adopt a new “financial reporting framework” which removes the need for reporting June figures each year.
Cr Church said the lack of June figures in the past two years was a “concerning precedent”.
“Setting aside the merit or otherwise of releasing the preliminary financials, what we have seen is an administration which has chosen to ignore an instruction from a democratically elected council,” he said.
“The council is now trying to entrench the practice of selective reporting by bringing a motion before next week’s council meeting to remove the obligation to provide the June figures going forward.
“I urge all my fellow councillors to vote against this motion and stand up for open and transparent governance.”
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