Open letter to Mr Schooneveldt: Firstly, let me thank Mr Schooneveldt for his various emails and articles, insights and contribution to a very public debate on the Bass Coast Shire Council’s finances which has been long overdue for the benefit of our community.
However, as indicated, operating deficits of more than $20 million over the financial years ended June 30, 2013, to June 30, 2016 inclusive were incurred by council.
Council incurred more on operating expenditure than it received by way of operating income, and this has had two main consequences:
1. Underperforming capital expenditure for new assets/infrastructure because of insufficient funds available from operations due to the deficits; and
2. Underperforming renewal and upgrade capital expenditure for existing assets/infrastructure, again, because of insufficient funds available from operations due to the deficits.
In other words, if you incur a trend of deficits (where expenditure exceeds income), there is insufficient funds available from operations to fund assets/infrastructure at the appropriate levels.
Our community understands these matters from a non-accounting and less complicated perspective, and that is:
• A continuing trend of operating deficits (in this instance, more than $20 million over several financial years in a row) equals insufficient funds available for new assets/infrastructure projects; plus
• Insufficient funds available for renewal of existing assets such as roads, footpaths and bridges etc.
I fully respect Mr Schooneveldt when he says he a numbers man, and refer him to the Victorian Auditor-General’s Report Local Government: 2015–16 Audit snapshot (November 2016), where he can confirm the underperformance of council in the critical areas of capital replacement and asset renewal.
Les Larke, FCPA, Fellow Certified Practicing Accountant – CPA Australia, Bass Coast Shire councillor, Bunurong Ward.