AUDITORS REPORT DAMNING INDICTMENT OF COUNCIL MANAGEMENT

THE LOCAL GOVERNMENT Auditors Report for 2012 is a damning indictment of the manner in which the senior management of Sligo County Council manages its financial business and it clearly confirms that the local government system in Sligo is in a shambles, Cllr Declan Bree said yesterday.

"The Auditors report reveals that Sligo County Council’s overall debt has increased from €85 million to €94 million in the past year.

"It should be obvious to most people that what is happening in local government in Sligo is not only unacceptable, its unsustainable.” said Cllr Bree.

In his report on the Council’s finances for 2012, the Local Government Auditor, Mr Raymond Lavin, expresses concerns in relation to the financial performance of the Council and in regard to the financial standing of the Council and its increasing level of debt.

Mr Lavin states that the Revenue deficit increased by 19% in 2012 to €15.4 million.  He said that the 2012 Council Budget was prepared on the assumption that €4 million in income would be saved as a result of redeployment/voluntary transfer opportunities and he pointed out that there was no evidence at the time of the budget preparation that these saving would occur in 2012.  “These saving were subsequently not achieved.”

He said that an independent financial appraisal was conducted of Sligo County Council by a firm of external consultants (Grant Thornton) and was presented to the Council’s members in August 2012.  “The Financial appraisal included an assumption that the Council would break even in 2012, based on the 2102 balanced budget presented by Council management to the external consultants.  This assumption was incorrect as the Council has a reported deficit in excess of €2.45 million.”

Mr Lavin said the Council’s financial position had deteriorated significantly during 2012 and he expressed significant concern that the Revenue debit balance had increased to €15.4 million at the end of 2012 and the long term debt was €79 million.

Mr Lavin also pointed out that the projected interest charges on loans taken out by the Council in 2010 and 2012 to fund the revenue deficit and partially finance unfunded balances will be €430,000 in 2013.  He said the interest will have to be revenue funded and will have an impact on future Council budgets.

He said that unfunded balances are understated in the accounts by at least €580,000 and that the Council’s deficit was also understated as the bad debt provision was inadequate.

He also drew attention to the sum of €92,000 in statutory payments which the Council deferred paying in its 2012 budget.  He recommended that these outstanding sums be provided for in the forthcoming Council budget.

Speaking this week Cllr Bree said “The local government system in Sligo is in a shambles and much of the blame lies with senior Council management.  They are currently blocking meetings of the Borough Council from taking place and the County Council is a basket case.

"People I meet are incensed at the fact that the senior officials responsible for the state of local government in Sligo and for presenting these fantasy budgets are answerable to no one and accountable to no one.  It would appear that they are untouchable and can continue in their positions regardless of the level of incompetence

"We may be getting a new County Manager in January but it will take a lot more than that to change the mindset and the level of incompetence we have witnessed over the past number of years. 

"Some of the Council’s senior management are paid in the region of €100,000 a year, plus expenses – and look at the state of local government in Sligo.   We are the laughing stock of the country.

"The Council is now over €94 million in debt and is it any wonder? For the past number of years the Council Management has consistently asked councillors to adopt annual budgets that were based on fantasy, budgets that bore no resemblance to reality, budgets that were absurd and unattainable, budgets that led to massive deficits in the revenue account each year.  And to make up for the shortfall each year the Management then urged councillors to take out loans and increase overdrafts.” Cllr Bree said.

"Unfortunately the majority of councillors placed their trust in the management and danced to the County Managers tune and constantly voted for budgets which have brought the Council to the verge of bankruptcy.    

"While other councils may have had difficulties, the fact of the matter is that Sligo County Council is the only Council in the state where the revenue deficit has been consistently increasing year by year.

"What has been happening here is madness and unfortunately it will be the ordinary people of Sligo who will suffer the consequences.” said Cllr Bree.