Freo's View

CITY OF FREMANTLE FINANCES SOUND

Posted in city of fremantle, economy, finances, Uncategorized by freoview on August 11, 2017

 

A small article in today’s West Australian reported that David Templeman, the Minister for Local Government, had announced that 15 per cent of, or 22 local councils in W.A. were considered to be high risk by the department.

They include the City of Perth, Fremantle, Kalgoorlie, Exmouth, Derby, Carnarvon, etc. but the article did not go into detail as to why these councils are judged to be high risk.

The claim about Fremantle’s finances has been made before, and rejected by the City, but I thought it would be prudent to ask them for a comment. Here it is:

Today’s page 14 newpaper article in The West Australian: ‘More councils high-risk’ has named the City of Fremantle as being identified by the Department of Local Government as ‘high risk’.

The City assumes it was included in this list due to a one-off low Financial Health Indicator (FHI) score for the 2015/16 financial year. The lower than usual score was caused by a combination of factors including a change in accounting methodology used by the City to simplify the way overhead costs are recorded. This change artificially inflated the year-on-year operating expenditure in 2015/16.

With this anomaly addressed in subsequent budgets, the City’s FHI score will normalise back to its long-term healthy trend when the 2016/17 audit is completed.

In previous reports issued by the Department of Local Government the City of Fremantle has not ever been classified as being in any risk category, let alone a high risk.

The City is independently audited each year and no audit has ever indicated any fundamental issues or problems with the City’s medium or long-term financial viability.

I wonder if it should not be a matter of course for the Department of Local Government to notify local councils of their findings and concerns and offer support to them, and clarify how they reached the findings.

 

Roel Loopers

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