$1 million marina query
INDEPENDENT auditors will be called in to decide if Robe District Council gave a “million dollar gift” to the Robe Marina project.
Independent auditors will be called in to decide if Robe District Council gave a “million dollar gift” to the Robe Marina project.
The council last week voted to accede to a request from former mayor and current council audit committee chair Will Peden to have Galpins Accountants Auditors and Business Consultants investigate its dealings with the marina corporation.
Mr Peden has for some months been agitating for an independent audit on the council’s involvement with the Lake Butler project, particularly focussing on the origin and current status of a $1 million “loan” from the council to the marina corporation some time before June, 2013.
He has alleged that in June, 2013, current council CEO Roger Sweetman cancelled the loan, effectively gifting $1 million of ratepayer money to the marina corporation.
At last week’s meeting, Mr Peden reiterated his allegations – claiming that former CEO Bill Hender had confirmed to him that the loan existed – and demanded an independent audit.
CEO Mr Sweetman responded to the allegations in a written report, explaining that the loan had been cancelled because he couldn’t find any paperwork confirming that it existed, and mayor Peter Riseley also referred to the issue in his mayor’s report.
After Mr Sweetman’s report was read to the meeting – attended by five of the six councillors and a small public gallery – councillors voted in favour of a motion to employ Galpins to do an independent audit on its financial dealings with the marina corporation.
Mr Sweetman said it was likely the auditors would be able to complete the audit in time to table at the council’s September meeting.
Mr Peden alleged that the council loaned $1 million to the marina group “to bill the marina project for ratepayer money that was spent on the marina” during the term of former CEO Mr Hender. Mr Hender confirmed this to Mr Peden.
He said the council had been receiving interest of $50,000 per year from the loan, but “now under the Sweetman administration ratepayers were getting nothing in interest each year and he wants councillors to endorse his action where ratepayers don’t get their million dollars back either”.
Mr Peden said the community was going to be justifiably angry when they found out the $1 million of their loaned money had been written off.
“When the whole community find out that their money has been given to berth holders without any consultation they are likely to be very angry, upset and demand their money back. They don’t care about internal paperwork, they just want their $1 million back.
“They are going to demand to know who is responsible for cancelling their loan.”
Mr Peden further alleged that in June, 2013, the accounts of the marina committee were merged with council’s accounts, “making it easier for marina expenses to be paid for by ratepayers.
“I can’t find a council resolution that authorised this. Marina expenses no longer appear to be added to their loan, interest on the loan is no longer paid.”
Mr Peden suggested the community be surveyed to find its opinion on the question: “$1 million loan to the marina project – keep or gift?”, along with other related questions.
THE CEO’S RESPONSE
Mr Sweetman countered Mr Peden’s claims by explaining he was only following correct accounting procedures in dealing with the “loan”.
“In the outset I can assure elected members that council staff have not written off any loans, nor gifted any annual interest charges relating to council’s finances or the marina’s finances.
“The loan that is being referred to by Mr Peden is not a loan but a liability which has been reported to the marina committee and council in the assets and liabilities statements for the operation of the marina.”
Mr Sweetman said council staff had researched all relevant minute books and financial statements and “can find no instruction from council to establish and report on an internal loan between council and the operation of the marina”.
He explained that shifting the operational accounts for the marina onto the same system as the council was merely for convenience so there weren’t two different recording systems, and “the transfer of the method of recording transactions has had no impact upon the ability to report the marina liability”.
After reading his report at the council meeting, Mr Sweetman added the comment that an independent audit would be “very beneficial” to ensure complete transparency.
THE MAYOR’S COMMENTS
Mayor Mr Riseley said the council had already previously answered a series of questions from Mr Peden with a 12-page reply, and senior administrative staff and elected members had also met with him for detailed questioning, but “it appears Mr Peden still has issue with some of the material”.
“Consequently the elected members feel the most appropriate pathway forward is to have an audit response from external auditors Galpins to the concerns raised.
“While it is unusual for a response to this type of comment by me in a mayor’s report, there is the knowledge that the marina project has in the past been very controversial.
“The current elected members are very aware of the requirements for accountability, due diligence, transparency and good governance; they are committed to serving this community well.
“The independent response by external auditors to the concerns will provide a response unbiased by council.
“The marina project has moved forwards a long way since its inception. Robe as a community has moved forward, it is important to remember the past and difficult times that were faced by our community.
“Robe is once again a focussed coherent society with visionary plans based on community input for its future.
“When there are issues there must be full disclosure and answers. United and together Robe will continue to prosper.”
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