NSW councils have been ‘set up to fail’ with their annual audits ‘because the NSW Government is forcing them to carry the depreciation cost of assets they neither own nor control’, claims the peak body representing councils, Local Government NSW (LGNSW).
Described in a press release as the ‘Red Fleet’ dispute, LGNSW says the audit requirements are adding to further financial uncertainty for local government areas across the state.
LGNSW President, Darriea Turley AM, said the current NSW Government was overseeing a ‘dramatic increase in the number of councils being hit with qualified audits, after only two were issued in 2021’.
Remarkably, the serious claims of cost-shifting and bullying by the state government have not been refuted by the Minister for Local Government, Wendy Tuckerman MP (Liberal).
LGNSW President, Darriea Turley, said the spike in qualified audits comes down to the NSW Government’s insistence that council accounts include depreciation costs for Rural Fire Service (RFS) assets.
‘It is a ridiculous notion that councils are responsible for RFS assets. In most instances we don’t even normally know when a new fire truck arrives in town until we see a photo of the minister and the local fire service in the media,’ Cr Turley said.
‘But despite this, the NSW Government continues to dig its heels in on the issue and heap more financial uncertainty on the local government sector at a time when councils facing unprecedented natural disasters can least afford it.
‘A qualified audit report can have serious financial repercussions for councils, limiting their ability to obtain loans and grants. This comes at a time when many are struggling with rising costs and a repair bill in the millions owing to recent extreme weather events.
‘The bullying of councils by the NSW Government needs to end. The government needs to do the right thing and take back control of the RFS assets.’
Cr Turley said LGNSW and councils across NSW wholeheartedly support the efforts of RFS volunteers who do a heroic job to keep communities safe.
‘This is purely about questionable accounting practices adopted by the NSW Government,’ Cr Turley added.
‘Requiring councils to record in their financial statements the total annual depreciation expense of RFS red fleet assets – estimated to be $145 million in the past year – will result in many councils having even less money to repair potholes in local roads or rebuild communities devastated by recent floods, let alone continue to provide and maintain other community infrastructure and services.
‘We’re so concerned about the implications of this issue that several metropolitan councils who don’t have a Rural Fire Service are passing motions in support for the communities that do’.
Minister handballs to bureaucrats
The Echo asked Minister for Local Government, Wendy Tuckerman MP (Liberal), whether the LGNSW claims were accurate.
Instead, a spokesperson for the Office of Local Government (OLG) replied on her behalf and told The Echo, ‘The Office of Local Government continues to engage and work with the local government sector to address issues and concerns around the financial reporting of Rural Fire Service assets’.
‘The Office of Local Government recently facilitated a webinar with councils and the RFS to provide guidance on the financial arrangements for the reporting of RFS assets. The Audit Office also attended the webinar and responded to questions’.