Home Financial consultant Consultant’s report criticizing a disconnection between the Council’s finance department and the directorates

Consultant’s report criticizing a disconnection between the Council’s finance department and the directorates

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A report on the financial capacity of the Central Coast Council by consultants in 2020 revealed a cultural lack of emphasis on the importance of its financial position and performance.

The consultants, Grant Thornton, found too many competing priorities that overshadowed the need for a financially viable organization.

The Council called on consultants to examine the financial impacts of the 2020 economic slowdown from lockdowns from the COVID-19 pandemic.

The first thing the consultants noticed was that the board continued to work on the integration process with many processes and systems to be consolidated following the 2016 merger of the Wyong and Gosford boards.

The report, still in draft form as of August 2020, estimated that the integration had cost around $ 40 million by that date.

He noted some data integrity issues, duplication of work and a high degree of manual entry to enable reporting and that this was causing disruption in various Council flows.

“Since the merger, there has been a growth in the number of FTEs (full time equivalents) and an increased level of investment projects during this period, although operational performance has deteriorated,” the consultants said. .

“As a result of the increased scope of services and support provided by the Council, there are competing priorities internally that are placing great strain on the limited financial resources of the Council.

“The Council is currently at a point where it cannot sustain the level of services provided and changes are needed to ensure that the Council becomes more financially viable and has sufficient liquidity to support its operations. “

The consultants said strong leadership would be required to drive the changes at all levels.

The team and financial systems were able to produce a multitude of reports, but despite the systems and structure, there was a mismatch between finance and management, and the actions required to set reasonable budgets, restructure costs and operate within budget.

“Given the Board’s historical operational performance and the lack of unallocated cash reserves, there must be an immediate restructuring of the cost base and a culture change to ensure the Board is financially responsible and sustainable,” said consultants.

To achieve this, the CEO and leadership team should work collaboratively with finance and support strategic finance goals.

He said the finance team needed to be able to move away from data compilation, remediation and reporting and focus more on financial analysis and planning.

“In turn, all Directors, Heads of Section and Heads of Unit should have an appropriate level of financial literacy to understand the reports provided and the actions required to rectify any performance issues,” the consultants said.

“Through analyzing the financial results and understanding the cost and expense drivers, negative variances against budget need to be identified and strategies put in place quickly to address poor performance; and there must be greater accountability for financial performance at all levels.

“Section heads, unit heads and directors ultimately control the financial performance of their directorates and are able to deliver results.

“As such, they must be held accountable for negative budget variances and with the support of finance, implement strategies to turn around performance.”

The report, which totaled 70 pages in two phases, included a series of recommendations.

A key priority was the integration of cash reports into the management team’s standard monthly financial reports, integrated with results and balance sheet position.

He said the long-term financial plan showed that the current budget could not be sustained and the acceptance of ongoing operational losses had to cease.

A plan must be implemented to reduce expenses, given the limited acceptable opportunities for advisers to increase income, according to the report.

The report has been made public and can be viewed on the Council’s website under the heading “public inquiry”.

Merilyn vale

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