COUNCIL ON VERGE OF BANKRUPTCY

THIS country is in the midst of a catastrophic financial crisis because those who were charged to look after the interests of the people chose to look the other way and to ignore events that were happening all around them.  Money was borrowed, money was squandered and no one was held accountable, Cllr Declan Bree, told Monday’s meeting of Sligo County Council. 

“In this context I would remind the members of this Council that in terms of corporate governance we have an obligation both legal and moral, to ensure that in so far as possible that sound systems of financial management are in place in this Council.

 “The Annual Financial Report for 2010 which we have before us today clearly confirms that this County Council is in the midst of a major financial crisis.

“According to the report this Council overspent by €2.46 million in 2010.  We are also told by our officials that there is a deficit brought forward from 2009 of €7.5 million, leaving this Council with an overall deficit of €9.98 million.

“Apart from the unacceptable overspending last year I have to say that I am amazed to find that there was also a deficit of €7.5 million brought forward from last year.

 “Following consideration of the 2009 Financial Report, in July last year, the County Manager asked the members of this Council to authorise a facility of borrowing of a sum not exceeding €18 million by way of a term loan of €15 million and a temporary overdraft of €3 million and it was understood at the time that the borrowing of the €15 million would clear the then existing €7.5 million deficit. 

“We were told then that the main reasons for the loan and overdraft facility totaling €18 million was because there was an accumulated deficit on the revenue account of €7.5 million and that there was expenditure of approx €10million on capital related activity that awaited funding.  We were also told that there were time differences where expenditure is incurred in advance of receiving the recoupment from the Department.

“However despite the fact that the Council borrowed the money to clear the €7.5 million deficit last July, the report we have before us today tells us that the deficit of €7.5 million still exists.   I suppose I will be accused of inappropriate behavior when I say that this Council has been hoodwinked, however that is my interpretation of the matter and I find it unacceptable.

 “In January we asked the County Manger to provide this Council with a report indicating the amount of interest being paid on the €15million loan along with a full report indicating where the borrowed money was expended.   To date the County Manager has not provided us with that report.

“What is happening here is unacceptable.  Information which we are entitled to and which we should have is being withheld from us.   Councillors are being kept in the dark and possibly some are happy to remain so.     

“However I would point out that the Council is on the verge of bankruptcy,    Decisions relating to our finances are being taken by councillors without adequate reports or background information being provided by the County Manger.    

“In addition to borrowings, huge deficits of millions of Euro have now been run up by the Council and no one appears to be accountable.

“What is happening in terms of the finances of this Council is unsustainable and we urgently need advice and assistance from a third party.”

Cllr Bree then proposed the following: “That this Council, recognising the grave financial position it finds itself in, requests the new Minister for the Environment to meet with an all party delegation of councillors to consider the critical financial position of the Council and to seek the advice and assistance of the Department of the Environment and Local Government in terms of resolving the crisis.”.   Cllr Bree’s motion was seconded by Cllr Sean MacManus and was unanimously adopted.