Debt balloons

VINCENT council has been left with a $635,000 debt after a search of archives found it pocketed money that was supposed to be destined for benevolent institutions.

The council has been managing Leederville Gardens Retirement Village since July 2002, and under the village’s constitution surplus funds are supposed to go into a trust account.

Money from that account is supposed to be distributed by the council to not-for-profit organisations that benefit the community.

But on five occasions, part or all of the surplus was diverted, meaning the cash ended up in general revenue.

In the 2007/08 financial year alone (described in Vincent’s budget as significant for its infrastructure works) the council failed to transfer $339,968.

Current CEO Len Kosova, who’s trying to extricate Vincent from Leederville Gardens, initiated the review after discovering another $362,638 which wasn’t transferred in 2012/13.

He also found the council hadn’t set up a trust fund, but a reserve account which is described in previous budgets as being available for maintenance at Leederville Gardens or for its expansion, which is against the rules of the constitution.

All up the council failed to transfer $779,801, but about $360,000 has already been repaid, leaving it with a $417,163 shortfall.

With the interest that money could have earned taken into account, the council’s debt was pushed over $630,000.



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