Mackay Park: Should the Audit Committee have scrutinised the FULL business case

It is difficult to forget Clr Constable’s impassioned plea for advice before committing ratepayers to the $19 million cost blow out for the Batemans Bay Aquatic and Arts Centre, not to mention its future running costs.

Clr Constable, at the 28 July 2020 meeting, wanted to postpone the decision to endorse the construction tender and the final budget allocation of $69 million to the project, until the Audit Committee could analyse ALL the financial information, determine the risks involved and advise councillors.

In what appeared to be a well rehearsed charade, the chair, Mayor Innes, was at the ready, responding:

“Tender prices cannot be given to the Audit Committee,”

whilst the General Manager, shuffling her pre-prepared paper work, informed councillors that the Audit Committee could not have access to the tender document for construction of the facility or the total budget amount because it was ‘commercial in confidence’.

The GM stated (Timestamp 34:00) that there were 2 overriding pieces of legislation councillors needed to be aware of:

1. The Local Government Act(LGA): “it is confidential if it's commercial information of a confidential nature (oooo) disclosed prejudice the commercial position of the person who supplied it or confer a commercial advantage on a competitor of the council.”

This quote is from s10A: Which parts of a meeting can be closed to the public?

This LGA requirement refers to closure of council meetings so as to not disclose confidential information to the public. It is not about providing confidential information to the Audit Committee.

2. The Tendering Guidelines 1.3:

“Council must not disclose tender information received from tenderers that is intellectual property, proprietary, commercial-in-confidence or otherwise confidential”.......(omitted: without their prior consent)...... “until council has resolved the outcome of the tender.”

Once again this is referring to disclosure of information to the public, not the Audit Committee.

The Audit Committee are bound by confidentiality, just the same as the GM herself, councillors, staff members, delegates and committees delegated to council functions, under the Model Code of Conduct and ESC’s own Code of Conduct.

In fact under the Model Code of Conduct, there is a Guide for Committee members and delegates applicable to the Audit Committee which states in part:

“You must maintain the integrity and security of any confidential or personal information you have access to.

In particular, you must only access confidential information that you have been authorised to access and only for the purpose of performing your duties.”

“You must not disclose confidential information discussed during a closed session of council or committee meeting or any other confidential forum.”

Then we have the Audit Committee’s Terms of reference.

One of the specified official functions of the Committee is:

“SIGNIFICANT PROJECTS – Review the risks, progress, controls, finances and performance surrounding major projects.”

I also contacted the Office of Local Government who confirmed that the Audit Committee can be provided access to any confidential/commercial in confidence/tender information necessary for the purpose of performing their official functions.

So, in the words of the General Manager, “IT IS VERY CLEAR,” or in layman’s terms ‘bleedin’ bloody obvious’ that the Audit Committee can be provided with confidential documents/information in order to perform their delegated functions, one of which is to advise councillors.

Councillor Constable sought such advice so as to make an ‘informed decision’ but was denied the opportunity by the General Manager.

I believe the General Manager gave incorrect advice to councillors and that in doing so might have removed the opportunity for councillors to support Councillor Constable's amended request to await further scrutiny by the Audit Committee of the financial viability of the BBRAALC project and the liability to be imposed upon ratepayers.

Councillors’ subsequent approval of the tender and final budget for this multi million dollar development was without an updated business case or any professional advice.

This would not have occurred if the Audit Committee had been involved as they have at least one financially qualified member and are permitted to “obtain legal or other professional advice considered necessary to meet its responsibilities.”

It is my belief that the General Manager’s incorrect advice resulted in councillors making an ‘uninformed’ decision that will cost Eurobodalla ratepayers for many years to come.

If YOU were a councillor in this shire with a low socio-economic demographic, would YOU be prepared to commit ratepayers’ money to a multi million dollar project with a current $19 million cost blow out, predicted million dollar losses for the first 10 years, with no professional advice, no updated business case and no consideration of the implications of COVID? Patricia Gardiner

Deua River Valley