Council in $7m deficit

$17m in, $25m out adds up to budget black hole

BUDGET documents have revealed the $7m financial black hole the Palm Island Aboriginal Shire Council has fallen into.

The budget, released in the past week, shows the “mismanagement” of not only the council’s own budget but state government funding.

The council earns about $17m a year and spends almost $25m.

It also owes the state government millions for funded projects that were never started or completed.

Financial services director John Mugambi Mwamba and a former accountant are under investigation by the Crime and Corruption Commission over allegations they defrauded the council.

Mayor Mislam Sam said the next few years would certainly be “character building”.

“We’re going to go through major organisation reforms … we’re spending much more than we are earning,” he said.

“There will be a total focus on self-generated income on the basis of doing more with less.

“It’s going to be a trying time for our community. “We’ve got to do more. “We have to deliver on more for our locals.”

Cr Sam said the council would work towards raising more revenue, rather than relying on grants, which were used by Aboriginal shire councils that could not collect rates.

“There is leakage on the island, (there are) contracts that are being awarded that we can possibly deliver on,” he said.

“(We are) trying to get enough contracts where we can self-generate a lot of income.

“It’s only going to improve … we need it right now in light of what has transpired in the last 12 months.”

Cr Sam said the council owed the state government millions of dollars for projects, but the money was no longer there.

He said there had been a lot of shifting around of money and not delivering projects on time and on budget in the past.

“There is a lot of stuff that we inherited,” Cr Sam said.

The budget revealed the council was still spending more than $9m on employee costs a year and was projected to spend almost $12m a year in the next decade.

Last week, CEO Adele Young announced a major shake-up of the council’s senior management, with just one deputy CEO instead of three directors.

More changes are expected to be put in place in 2022.

The new structure is tipped to streamline processes and reduce the council’s costs.

Ms Young said this situation had not happened overnight and previous administrators had done a poor job of managing the council’s affairs.

A two-year plan has been proposed to bring the council’s budget back on track.

“Changes have to be made to cut costs, grow revenue and sell any assets that are nonproductive,” Ms Young said.

“Reducing administrative costs and increasing productivity is simply a must do.

“The option to do nothing is just not possible.”

WE’RE GOING TO GO THROUGH MAJOR ORGANISATION REFORMS … WE’RE SPENDING MUCH MORE THAN WE ARE EARNING

MAYOR MISLAM SAM