Accountant: Double whammy left town council close to running out of cash

Published on: 10 Jul 2015

Filton Town Council suffered a ‘double whammy’ last year of salaries not matching budgets while income did not meet expectations, the full town council meeting heard.

The result was that reserves were reduced to just £21,000 - compared to a level recommended by council accountant Derek Kemp of £165,000.

The council ended up with a deficit of £98,000, which led to the hit on reserves.

Mr Kemp - whose recommended figure was disputed by a resident who said it should be nearer double that amount - warned that the council came close to ‘running out of money’.

He told the meeting: “It was apparent that things were not in accord with the budgets.

“The causes were obvious - salaries and staffing structures were out of line with budgets, especially the rosters in the swimming pool, while income was falling short of budgets. This resulted in a double whammy for the council.”

He said there had been issues with the way budgets were recorded with what should happen not matching what actually happened.

Since then new measures have been put in place and cost cutting introduced, and Mr Kemp said he hoped reserves would be in six figures again within three of four years.

Resident Dave Mikkelson, an outspoken critic of the council’s finances, said he had been warning since September of the fragile state of the balance sheets but that it took until December before action was taken.

He asked Mr Kemp why the problems had not been spotted earlier but Mr Kemp said it was when he began work on the new budgets that he noticed the problems.

Mr Mikkelson and Mr Kemp disagreed over the recommended levels of reserves, with Mr Kemp saying he believed £165,000 was appropriate while Mr Mikkelson said the council’s audtor’s report recommended £300,000.

Mr Kemp said that the new councillors elected in May had nothing to do with last year’s problems and that while the situation has not been good, it is for the council to adapt to the situation.

He said it was likely the precept (Filton element of council tax) would rise in 2015/16.

The town council officers and councillors are now being urged to take part in a training session later this month focusing on accounting.

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