Councillors this week signed off the carryover of the largest amount of unspent annual funding ever recorded at the City of Ballarat.
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The "carryover" (also called "carry forward") represents the amount of unspent funding in a financial year transferred to the next one.
This year's total for the City of Ballarat was $54,657,872 - a figure described by one councillor as "eye-watering" - of which $35,885,488 was council funding.
The council funding carryover is more than $7million over the $28.8m for the City of Greater Geelong, a municipality around double Ballarat's size. It was also close to four times the $9,538,000 level registered in the City of Greater Bendigo's budget. In a statement, a City of Ballarat spokesperson said it was difficult to compare "without understanding each council's carryover process".
What then, can the sum tell us about our council's performance? Is it much more than a technical accounting process? And should ratepayers care?
Some observers - including a few councillors - believe it indicates the oversight of projects is not working as well as it should.
On a more positive note several, including the Mayor Cr Ben Taylor, Crs Daniel Moloney and Grant Tillett, also made the point the sum should mean more could be invested in works to help the post COVID-19 recovery.
However, councils have previously faced pointed criticism for routinely carrying over large sums of money every financial year.
A state government commissioned report into the City of Greater Geelong council, published in early 2016, described its "persistent... substantial capital carryovers" as "indicative of inadequate strategic planning, prioritisation, project planning and management of detailed implementation."
A City of Ballarat spokesperson made the point that this year's carryover included $7 million in state government grants.
Good governance and transparency in planning and budgeting for capital projects is perhaps more important than the carryover level
- Kathryn Arndt, VLGA
The municipality received large capital grants in the 2019/20 financial year for Ballarat Events and Sports Centre as well as the Wendouree West Recreation Reserve. "Other councils may not have had these high level of grants," a council statement noted. It also said historically the council had included the overall cost of a project in its annual budget, even when works were due over several years.
The highest sum registered on the list of items on this year's carryover total was $5,133,887 for the Victoria Park redevelopment. The Courier understands this is partly due to a delayed state government loan, which eventually council borrowed elsewhere.
However, there was some acknowledgement at the council meeting on Wednesday that change was needed.
In previous years, Ballarat's carryover has still been high: $36.141 million for the last financial year, following totals of $41,554,629 and $45,323,982 in 2018 and 2017 respectively.
Interim CEO Janet Dore told councillors that the City of Ballarat was looking to consolidate "project management resources into a central location".
She said this was intended "to improve business planning and project evaluation, which can only help delivery."
Previously, Ms Dore has said council has been hindered by an excessive amount of strategies and projects, saying there were "too many plans, not enough delivery".
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A spokesperson for the Department of Jobs, Precincts and Regions said there could be a "variety of factors" affecting councils that can lead to carryovers.
They said Local Government Act reforms introduced this year would help councils "improve their planning and delivery of works", citing in particular the development of "10-year asset plans".
The Victorian Local Government Association (VLGA) meanwhile, an independent organisation which advises councils on governance, said differences between budgeted and completed works were inevitable.
"Weather conditions, supply issues and a range of unforeseen events may see timelines change," said Kathryn Arndt, the VLGA Chief Executive Officer. "Good governance and transparency in planning and budgeting for capital projects is perhaps more important than the carryover level."
The issue of project oversight has been under the spotlight in the city recently, with controversy over the amount of spending on the Gatekeepers Cottage and the new fernery in the Ballarat Botanical Gardens.
A City of Ballarat spokesperson said it is considering dropping the notion of carryovers for budgets, and instead including amounts for projects in progress, as well as anticipated grants in the capital works budget.
Ms Arndt said: "All capital projects should have proper oversight.
"This means that material variations, delays and projects brought forward are routinely reported to the council as a demonstration of transparency and oversight over capital projects and associated expenditure."
FULL MEDIA RESPONSES
The Courier contacted a number of organisations researching this article. Here are their responses in full.
City of Ballarat
It is difficult to make comparisons between councils without understanding each council's carryover process. Ballarat does not include any carryovers in the adopted budget. Some councils do include some level of carryovers in their budgets.
Part of the City of Ballarat's carryovers comprise $7,000,000 received from the Victorian Grants Commission for the 2020-2021 year that was received in late 2019-2020. Some councils may include this in their 2019-2020 budget.
This year the City of Ballarat received some large capital grants before 30 June, such as Ballarat Sports and Events Centre Stage 2 and the Wendouree West Recreation Reserve projects which are included in this year's carryovers. Other councils may not have had these high level of grants.
Ballarat historically has included the full cost of a project in its annual capital budget, even though the project may have a life cycle over several years. Unspent funds are then carried over into subsequent years.
Council is considering changing its budget process to remove the notion of carryovers and include works in progress and anticipated grants for future works in the Capital Works budget.
Further, only the annual budget of those projects with total end costs spread over several years would be disclosed.
Victorian Local Government Association
VLGA Chief Executive Officer Kathryn Arndt:
There will always be variation between budgeted and completed capital works. Weather conditions, supply issues and a range of other unforeseen events may see timelines change. Also priorities might change, for example in response to natural disasters, and as a result, budgets may require amendment.
Good governance and transparency in planning and budgeting for capital projects is perhaps more important than the carryover level. All capital projects should have proper oversight. This means that material variations, delays and projects brought forward are routinely reported to the council as a demonstration of transparency and oversight over capital projects and associated expenditure.
DELWP, department of Jobs, Precincts and Regions
Councils make a significant contribution to local economies through capital works and there may be a variety of factors influencing their delivery that can lead to carryovers.
Reforms initiated through the Local Government Act 2020, including the development of 10 year asset plans as part of an integrated planning framework, will help councils improve their planning and delivery of works.
Further budget coverage:
- Ballarat budget 2020/21: Council pushes back budget decisions
- Ballarat draft budget 2020/21: What's the real deal for how our money is being spent?
- City of Ballarat draft budget 2020/21: Residential rates to go up
- Council to cut agency staff
- Ballarat City Council's 2020-21 draft budget amid coronavirus (COVID-19) pandemic
- City of Ballarat budget 2020-21: Council proposes borrowing $17m for post-coronavirus budget
- Ballarat council draft budget 2020/21: Figures are not the full story
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