Sligo County Council has been told it needs to prepare “realistic, achievable budgets” after an audit found the deficit on its revenue account, which rose 30 per cent last year, had been understated.
It has emerged that Sligo County Council included “income” of €4 million in its budget for 2012. This money was anticipated payroll savings from a voluntary redundancy scheme which has not been introduced.
In his report, which expresses “serious concerns” about Sligo County Council’s €73 million capital debt and a €13 million deficit in its revenue account, the auditor highlighted a number of problems, including “an insufficient audit trail” in relation to some capital projects and a failure to tender for legal and insurance services.
The Local Government Auditors Statutory Report for 2011 also highlights the purchase for €100,000 of property from the Health Service Executive in 2010 “by way of verbal agreement”.
“No formal agreement was drawn up,” according to the auditor Raymond Lavin, who pointed out that no independent valuation was carried out before purchase. He added that Sligo County Council “should ensure that appropriate documentation exists” for capital purchases.
In a response included in the report, which will be discussed by councillors at a meeting next Monday, county manager Hubert Kearns said the site in question was for a new fire station in Ballymote. The agreement presented “excellent value for money for the council” and “there is no possibility of any loss to the public purse”.
One of the auditor’s most controversial findings was that an independent financial appraisal into the council’s finances earlier this year by consultants Grant Thornton, which predicted a €28 million deficit by 2017, had been based on the assumption that the council would break even this year. The auditor said this now appeared extremely unlikely, given the estimated €1.5 million deficit for the first six months of the year.
