Sunday, May 26, 2024

Debt-ridden Kiama Council issued Performance Improvement Order

Kiama Council has received a Notice of Intention to Issue Performance Improvement Orders (PIO) from the NSW Minister for Local Government, Wendy Tuckerman.

Minister Tuckerman wrote to the council on Tuesday to indicate her intent to issue a PIO over concerns it had failed to comply with its legislative responsibilities.

In the letter, Mrs Tuckerman said action must be taken to improve the council’s performance based on her concerns regarding the Council’s financial management practices and its ongoing debt issues.

“Specifically, [the] council has accessed restricted funds without approval and used those funds for purposes other than for which they were intended, in breach of the Local Government Act and the Environmental Planning and Assessment Act,” the Minister wrote.

NSW Local Government. Minister, Wendy Tuckerman.

“There is evidence to suggest that [the] council may not be able to pay its debts as they fall due.

“There were, and continue to be, serious risks faced by the council due to its financial position having deteriorated to the extent that it had insufficient cash to cover all internal and external obligations.”

The notice will be publicly tabled in a supplementary report at the Extraordinary Council Meeting this Thursday.

The notice raises 10 specific concerns regarding:

  • Council’s financial management and legislative breaches;
  • inability to pay its debts as and when they fall due;
  • financial record-keeping;
  • construction costs of Blue Haven Bonaira;
  • the ongoing operation of Blue Haven and resultant financial stress on Council.
Kiama Council’s Blue Haven aged care facility.

The Minister has also given notice of the intent to appoint a temporary financial adviser with the requisite financial expertise to oversee and report on the implementation of the Performance Improvement Orders.

Council has until 25 October to respond to the notice and says it will do so via public resolutions at a Council meeting.

Kiama Council advised the public of the PIO in a Facebook post yesterday.

“This is a serious matter and must be given the required consideration,” a Council agenda document tabling the letter states.

“Councillors will meet to discuss the letter and will consult with Audit and Risk Improvement Committee and the Finance Advisory Committee.”

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