Audit outcome - more about appearance than substance

The residents of the former Gosford Council have been told it is highly unusual for an auditor to write a disclaimer instead of offer an "opinion" on its financial statements.

It has been portrayed as letting administrator Mr Ian Reynolds, chief Mr Rob Noble and their senior management team "off the hook" in terms of their Local Government Act responsibilities to vouch for the accuracy of the former Gosford Council's financial statements.

It also gives their no-doubt well-paid auditor, Price Waterhouse Coopers, an "out" - if management could not provide sufficient evidence, the auditor could not possibly be expected to provide an opinion as to the validity of the books.

Both gentlemen lit a fire in March when they announced they had uncovered "serious control weaknesses" and had to revalue the former Gosford Council's assets downward by $1.38 billion.

They made it clear that they did not believe any current member of staff had done anything wrong.

Before they drew their line in the sand and stopped answering questions about the Gosford accounts, they explained that the revaluation issues related mainly to a double-counting of manholes in 2010 and an over-valuation of bulk earthworks.

Their great discoveries were more about incompetence, human error and sloppiness, than any great financial scandal ... but the mud stuck.

They also explained that the control issues related to software, believed to be used by local councils across the state since the late 1980s, that had an "option" switched off at some stage which allowed for multiple parties, including third parties, to make changes to data without leaving an evidence trail.

When pressed, Mr Noble said he was unable to confirm whether any data changes had been made, nor could he confirm they hadn't.

The matters were referred to ICAC, police and the NSW Auditor, although Mr Noble at no stage named those external parties.

Mr Noble has not answered questions about whether the same "forensic" process was applied to the accounts of the former Wyong Council.

The auditor chosen from the short-list of candidates provided by the NSW Government, and in particular the Office of Premier and Cabinet that has controlled the whole council amalgamation process, Price Waterhouse Coopers, just happened to have been Wyong's auditor.

No fresh eyes, no independent, forensic third-party scrutiny has been applied to the accounts of the former Wyong Council.

As a result, it is unlikely we will ever know whether or not they double-counted their manholes or overvalued their road base or made similar errors.

Victors write history and there is now mounting evidence that the "amalgamation" of Gosford and Wyong LGAs has clearly been a takeover of the southern LGA by the Liberal-dominated Wyong Council.

In a corporate takeover, the target frequently has its assets revalued in the acquisition, for purposes that suit the purchaser.

It has been no different in this case.

Not one of over 40 senior managers from the Gosford Council remains, according to former Gosford deputy mayor Craig Doyle.

Former Gosford councillors across the political spectrum are incensed that the NSW Government-appointed Administrator and CEO have implied poor financial practices that have opened the way for targeted political advertising that could, at the very least, confuse the general public if not mislead it.

Independent financial experts have told Peninsula News it is unlikely any third party, ICAC, the police or the Auditor-General, will look further into the management of the former council's books or take action.

The former Gosford councillors have spent the past 13 months silenced as members of the tokenistic Local Representation Committee, now dissolved.

None chose to stay outside the administrator's regime and speak on-the-record about the loss of their constituents' democracy during that time.

Now they are no longer sworn to silence, it is too late to lead the public to fully understand what has already been lost: the dissolution of all community committees and their replacement with a website and hand-picked consultative groups; the appointment of a senior executive team on long-term contracts hand-picked by representatives of the current State Government; the diminution of representation to only three councillors per around 66,000 residents; the appointment of a Coordinator-General to ram through a regional plan that ignores the diverse and unique concerns and needs of the many communities that make up that region.

Each of those unique communities, Woy Woy Peninsula in particular, has now become part of a Mike Baird experiment that has the potential to impact our social, economic and environmental fabric and wellbeing for decades.

Jackie Pearson, 22 Jun 2017