VINCENT city council’s financials are in deep trouble after $3.2 million listed as a surplus was found to be a deficit. If not tackled, the council deficit could blow out to $6.4 million.
The discovery means “potentially nothing is off limits” says new CEO Len Kosova in his first tumultuous week in the job.
“There will have to be across-the-board considerations to reducing expenditure… it may be we need to defer, split, or no longer proceed with certain initiatives.”
Mayor John Carey says it’ll be up to the council to decide how to tackle the problem but he’s already flagging that “wishlist” programs like North Perth underground power are likely to be shelved.
The WA local government department wrote to Mr Carey on July 31 to warn him of the error, requiring a response by August 31 on how the council intends to balance its books.
The deficit appeared as a late item towards the end of the last council meeting. Councillors were told, “if not addressed, this transposing error could result in an estimated deficit of $6,399,558” by next June.
The department notes in its letter it had “raised questions regarding the City’s financial position and reporting discrepancies” in January 2014, April 2013, and January 2013.
Mr Kosova pored over the books to discover the previous administration had predicted balanced budgets for the past five years, but ended up between $2.2m and $3.6m in the red.
He says he wants to “work out if this was just a one-off thing that has arisen, or if there is a deeper, more systemic issue that has been occurring here”.
“Unfortunately there was a trend since 2009 that in every budget presented to council by administration, it was intended to be a balanced budget.
“At the close of the financial year it wasn’t a balanced budget, and not by an insignificant amount.”
Finance director Mike Rootsey is overseas, but Mr Kosova says he’ll be having a chat when he gets back.
“The city needs to be much more accurate and reliable in how we manage our spending,” he says.
by DAVID BELL
Perth Voice Interactive 
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