Streets paved with gold: Ipswich and its $12 million income-producing footpaths
Local Government Minister Stirling Hinchliffe’s predecessor in the Bligh Government was warned 10 years ago about “irregular” accounting by Ipswich City Council after the council revalued the city’s footpaths upwards by $12 million and claimed the amount as “income” in its annual financial statement.
But according to the senior judicial official who raised the issue with then-Local Government Minister Warren Pitt, “nothing came of it”.
Adrian Bloomfield, a vice president of the Queensland Industrial Relations Commission and founding chairman of the Local Government Remuneration Tribunal, told Fairfax Media he had found the “questionable accounting practice” in 2008 and raised it with Minister Pitt at a formal meeting in December of that year.
He said he had stumbled upon it while considering an application by another similar-sized council to be promoted to a higher category, which allows higher pay for councillors.
The Tribunal has set councillors’ pay since 2007 and later took on responsibility for dealing with serious misconduct by councillors. Mr Bloomfield continued to sit on the tribunal panel until June of this year.
“I found that the income was not as high as they’d claimed [in Ipswich] because they’d put in the revaluation of the footpaths as, inverted commas, ‘income’,” Mr Bloomfield, who has a background as a chartered accountant, told Fairfax Media.
“I thought it was irregular. I’d not seen anything like that before, not heard anything like that happening before and it just struck me as very unusual.
“If it’s an asset revaluation I’ve never seen it come through as income, treated as income, in terms of your profit and loss.”
The discovery prompted Mr Bloomfield to call on the Minister to standardise local government accounting practices, but according to Mr Bloomfield, nothing came of that either.
“When I found out about the Ipswich City Council arrangement I started to have a further look at some other statements that I could get access to from each council’s website and I started to say to myself, ‘this is all a bit strange’ because everybody reports their affairs differently,” he said.
“You really have to search through each set of accounts to almost do a forensic accounting exercise just to find out what’s happening.”
In a briefing note handed to Minister Pitt, Mr Bloomfield told him the tribunal had “found a lot of inconsistency in the way councils record and report their data … this makes comparison between councils difficult.”
“The Tribunal recommends a six-way meeting between (the Local Government Department), Queensland Treasury Corporation, Grants Commission, Queensland Audit Office, Local Government Association of Queensland and itself to discuss development of a standardised reporting protocol.”
No such meeting ever took place.
“Nothing came of it ... everyone kept on saying that there are steps in place to get some standardisation and we’d better let those steps take their course,” Mr Bloomfield said.
A copy of the 2007 annual financial statement by Ipswich City Council, obtained by Fairfax Media, signed off by then-Mayor Paul Pisasale and chief executive Carl Wulff, includes $12.385 million in “other revenue” attributed to “revisions to infrastructure assets”.
A note in the accounts describes a “special project” carried out in 2006-07 because there was “insufficient information … to recognise footpaths as individual records - the changes in estimates arising from this project have been quantified and have been reflected in 2006/07”. There is no explanation of why this figure was considered to be “revenue”.
Minister Stirling Hinchliffe did not address questions regarding the concerns Mr Bloomfield raised with the Bligh government.
“Queensland councils are required to prepare annual general purpose financial statements that comply with Australian Accounting Standards,” he said in a statement.
“The department regularly facilitates workshops to assist councils to comply with these requirements and the annual general purpose financial statements are audited by the Queensland Audit Office.
“The department’s capacity building program for 2018-19 will have a greater focus on financial sustainability, including financial forecasting, asset management and community engagement.”
Most Queensland councils have been obliged to conform with Australian Accounting Standards since 1993.
Mr Bloomfield also revealed that prior to the establishment of the tribunal in 2007, when councillors still set their own pay, Ipswich councillors were the highest or second-highest paid after Brisbane City Council.
“They were streets ahead of everybody else,” he said.
The council had since been the most frequent applicant to the tribunal for pay rises, Mr Bloomfield said, describing such applications as “pretty much an annual event.”
Seven of the 10 Ipswich councillors who ran the council in 2008 are still in office, but facing imminent dismissal by Local Government Minister Stirling Hinchliffe, who has described an “unprecedented integrity crisis” at the council.
Fifteen people connected with the council including two mayors and two chief executives have been charged by the Crime and Corruption Commission with a total of 79 offences.
They include Mr Pisasale and Mr Wulff, both of whom have been charged with official corruption and other offences. They are contesting the charges.
Bundamba ALP MP Jo-Ann Miller and former Bligh government minister Rachel Nolan have accused successive state governments of turning a blind eye to wrongdoing and allegations of corruption at Ipswich City Council.
Ms Nolan has claimed the ALP “forced out or marginalised” people who raised concerns about Ipswich City Council and that Mr Pisasale, who was in the role from 2004 until June last year, “used his membership (of the ALP) to neutralise the party as a potential source of opposition and his popularity to co-opt key state MPs to his team”.
Minister Hinchliffe this week tabled in Parliament three damning reports on Ipswich City Council-owned entities detailing evidence of potential fraud and breaches of the Corporations Act.
At a press conference in the Ipswich Mall on Tuesday, he said taxpayers had been dudded by dodgy deals under a council culture of secrecy, entitlement and a lack of accountability.
Councillors have been fighting a rearguard action to keep their jobs, appealing to Queensland Governor Paul de Jersey this month to intervene as part of an orchestrated PR campaign fronted by long-serving councillor Paul Tully.
Mr Bloomfield said the public was “entitled to be concerned about what they are reading” regarding the behaviour of elected officials and others in local government across Queensland.
Ipswich City Council was approached for comment but did not respond by deadline.