Councillors 'not adequately supported', inquiry finds
The report of the Public Inquiry into Central Coast Council has found the "council's response to the financial problems it was facing was too little and far too late".
"Ultimately the responsibility for the fate of the Council rests with the councillors, but they were not adequately supported by a general manager who was able to provide strong leadership of the staff on financial matters at the time it was needed," said Commissioner Roslyn McCulloch.
She said that the absence of a permanent general manager and chief financial officer "contributed to a lack of leadership" and a "lack of financial direction".
The council had four different general managers between May 2016 and July 2018 which "contributed to a general lack of leadership and direction", she said.
"It also led to the absence of a permanent chief financial officer between August 2017 and May 2019 due to the reluctance of the interim and acting general managers to recruit and appoint a person for that role."
Ms McCulloch said the council lacked financial direction from August 2017 until the time of the appointment of Ms Natalia Cowley as chief financial officer in July 2020.
"While the appointment process for Mr Murphy as general manager was appropriate and fair, with the benefit of hindsight, he may not have been the best person for the position given the events which the Council was about to experience.
"His background was in engineering, and he had previously been the general manager of two much smaller councils.
"He had no experience with a merged council and a reported dislike of conflict.
"His lack of financial qualifications or experience in an equivalent-sized organisation, combined with the absence of a permanent chief financial officer for most of his term, created a situation in which there was no strong financial direction or oversight.
"Mr Murphy was responsible for the ill-fated appointment of Mr Craig Norman as chief financial officer in May 2019.
"Mr Norman was an accountant with no background in local government who never took control of the Council's finances.
"It is a sad twist of fate that the current chief financial officer, Ms Cowley, who has demonstrated an ability to re-float the sinking ship that was Central Coast Council, was looked over for the position."
Ms McCulloch said that Mr Norman said he had expressed to the councillors his preference was for a "long-term future where there would be either small surpluses or small deficits".
She said one councillor responded to that suggestion by saying words to the effect of "as government, we are here to run deficits".
"That exchange is emblematic of one of the problems which beset Central Coast Council," Ms McCulloch said.
"The chief financial officer did not direct or lead the councillors in any meaningful way and at least some of the councillors behaved recklessly in the management of Council's finances.
"Mr Norman admitted that he ought to have known that unrestricted funds had fallen into the negative, that he did not know who else in Council might have known about that fact, that he was aware that, due to Covid-19, cash could be an issue for CCC, and that local government was not a 'good fit' for him.
"Mr Norman was at Central Coast Council for a relatively short but crucial period.
"Unfortunately, his presence did not have a beneficial impact on the management of Council's finances and may have facilitated the lack of information flowing to councillors about the situation and lack of action to counteract the downward trend of Council's cash position."
Addressing what could have been done better, Ms McCulloch said: "The process for the appointment of the general manager could perhaps have benefitted from the inclusion on the selection panel of an independent person experienced in local government.
"Most of the councillors were first time councillors.
"An independent, knowledgeable voice on the panel may have assisted the panel and the councillors to understand the experience and qualities to look for in the candidates."
SOURCE:
Report, 17 Mar 2022
Roslyn McCulloch, Public Inquiry into Central Coast Council