City of Nedlands councillors warned they could be breaching laws by hiring a consultant to fix finances

Nedlands councillors have voted to hire an independent consultant on their own volition to fix the City of Nedlands’ failed audit - despite warnings they could be breaking the law.

A hastily called special council meeting on Wednesday came after auditors filed a disclaimer of opinion claiming the city’s financial report for the 2022-23 financial year was submitted for audit without complete and accurate underlying records.

Finance records that were so bad Mayor Fiona Argyle claimed RSM auditors allegedly said they couldn’t rule out fraud.

At a fiery meeting on March 11, councillors voted to ask independent consultants to review the auditors’ findings instead of heeding a call to hire four extra accountants to play catch up on the city’s finance books at a cost of $142,000.

Since that decision, two staff from the finance team — including an officer hired to help fix the city’s finances — have resigned.

“In anticipation of council endorsing the officers’ recommendation for the special council meeting we had assembled half of the project team and following council’s decision not to endorse our recommendation the project officer saw no other option but to leave the organisation and pursue other interests because of her need for full-time employment,” the City of Nedlands’ director of corporate services Michael Cole said.

“At the moment we have a full complement of staff, as of yesterday another officer has resigned but that is part of what should be expected in an organisation where there is going to be continual turnover.”

At Wednesday’s meeting, Cr Hengameh Amiry put forward a motion to appoint Craig Ross as an independent consultant to assess the audit findings and work with staff to fix the issues. For the three-month assignment, he will be paid $42,000.

“Before the (auditors filed their) disclaimer of opinion I had no knowledge of Mr Ross. He’s not a friend, he doesn’t go to same clubs, I haven’t had barbeques with him,” she said.

“He was referred to me after I spoke to people about the city’s dire situation. I had two meetings with Mr Ross and quizzed him on his abilities and went through his CV.”

City officers warned that hiring an independent consultant without going through the proper procurement procedures went against the Local Government Act.

“Council does not have the power to circumvent the council’s procurement procedures,” city officers said in the report.

“The policy outlines requirements in relation to seeking a minimum of three quotes, makes reference to the form of the quotations, and includes as one of its objectives that the process should be open, fair and transparent.”

It is a concern acting chief executive Tony Free relayed to council on Wednesday night.

“The advice is that we don’t believe it does comply with the regulations which must be a risk to council,” he said.

Cr Noel Youngman attempted to convince other councillors to vote against the motion for fear they would be breaching the local government laws.

“I don’t want to break the law, which is effectively what we are trying to do with this notice of motion,” he said.

“It’s been been pointed out to us that we are trying to do an administrative task and that has to be a concern to us because that’s not our role as a council we aren’t equipped to do that.

“There is a due process the council cannot circumvent the procedures... bringing in someone I’ve never heard of how is that open, fair, transparent?”

Despite the warnings the motion passed with only Cr Youngman and Cr Fergus Bennett voting against the idea.