Bayside Council is unable to confirm the “completeness and reliability” of the financial statements of the former Botany Bay Council.
Bayside is required to prepare the draft financial statements of the former Botany Bay Council for the period ending September 9, 2016.
This follows the proclamation of the new Bayside Council after the merger of Rockdale and Botany Bay councils.
Bayside Council officers and the Audit Office of NSW have devoted considerable resources time and effort on the audit process of the former Botany Bay Council, a council report said.
“Due to the significant breakdowns in administrative, financial and governance internal controls identified in the former (Botany Bay) council by the Independent Commission Against Corruption (ICAC) under Operation Ricco, it has not been possible for the current Bayside Council management to ensure completeness of the financial statements as a whole,” the report states.
Operation Ricco identified overwhelming corruption and systemic failures in internal controls at Botany Bay Council.
“Despite significant investments of time and resources by both Bayside Council and the Audit Office of NSW, it has not been possible to warrant the completeness and reliability of the (Botany Bay Council) statements.”
While Bayside Council has undertaken significant work to implement a new internal control environment to address the areas identified in Operation Ricco, this cannot correct the past failings for the former Botany Bay Council, the council report said.
To finalise the audit process of the former Botany Bay Council, Bayside councillors and officers will need to sign-of on the financial statements so they can be issued to the council auditor and the Audit Office of NSW.
The financial statements will be presented to the April meeting of Bayside Council.
Last Month, Bayside Council said it would seek a $17 million contribution from the State Government to recompense ratepayers for costs related from the misappropriation of funds by employees of the former Botany Bay Council.
ICAC’s Operation Ricco investigation found that former Botany Bay chief financial officer Gary Goodman, who passed away late last year, and 11 other people, mostly employees of the former council, acted corruptly raising more than $5 million in bogus invoices.
But Bayside Council mayor Bill Saravinovski said the real cost is much more and is impacting on the new council.
“The legacy of the misappropriations and costs of remediation result in a net fund deficit of $17 million, placing Bayside Council at a significant disadvantage,” Cr Saravinovski said.