Newcastle Now directors have sought advice about the business group’s financial position as it deals with the fallout from a Newcastle City Council investigation.
Council chief executive officer Jeremy Bath suspended Newcastle Now’s funding in July and launched an external investigation into whether it had been operating without submitting annual business plans, in breach of its 2011 funding agreement.
That investigation has claimed the jobs of council employees Jill Gaynor and Greg Fenwick, and Newcastle Now has been on a drip feed of funding for four months.
Rumours circulated this week that the organisation’s board of directors would consider at their annual general meeting on Thursday whether to go into administration, but chief executive officer Richard Christian said that option had not been discussed.
“There was some discussion around the ongoing capacity of the organisation to keep operating,” he said.
“We’re just going to exercise our due diligence. There were no formal decisions made.
“The directors have certain responsibilities, and I have responsibilities as the CEO of the organisation as well to just act responsibly.”
Chairman Edward Duc said the board had resolved to obtain advice from Newcastle Now’s accountants.
“The board’s obviously concerned that we need to handle our budgets very carefully, given the fact there’s a lot of budget we’re not getting,” Mr Duc said.
“We’ve asked our accountants to review everything to make sure we do everything according to the law.”
He said Newcastle Now had enough money in the bank to cover employee entitlements and other financial commitments.
The group, which is funded by a special levy on inner-city ratepayers, submitted a business plan to the council this week and is waiting to find out if it will receive funds to stay afloat until January.
“It is unfortunate that timing-wise it’s a bit tricky for us at the moment, but I certainly don’t feel antagonistic towards council; they’re doing what they can and exercising due diligence,” Mr Christian said.
In the meantime, the council is conducting a review of the entire business improvement association (BIA) model, of which Newcastle Now is a part.
The results of that review, which is being conducted by consultants AECOM, are expected to go before the council on December 11.
It is understood the consultants have been asked to consider whether to continue the BIA system or centralise management of the five BIA groups within the council.
The council has not made public the findings of the Newcastle Now investigation, and Mr Christian said he had not seen the report.
Solicitor Catherine Henry, artist and Timeless Textiles gallery owner Anne Kempton, and Crown and Anchor co-owner Tom Brown were elected to the Newcastle Now board on Thursday to replace Emma Mead, Bronwyn Rundle and Sarah-Parry Jones, none of whom sought re-election.