Glen Innes Severn Council has endorsed an alternative response to the NSW Government’s proposed Performance Improvement Order, following detailed consideration at its Extraordinary Council Meeting on 10 September 2026.
Council resolved to adopt the alternative draft tabled by Mayor Cr Margot Davis and amended through a Committee of the Whole, building on the officer-prepared draft.
The General Manager has been requested to finalise the submission by incorporating the amendments and additional information identified by Council, verifying factual, financial and evidentiary references, and completing necessary administrative and drafting corrections.
Council also delegated authority to the Mayor to approve the final form of the submission before it is lodged with the Minister for Local Government and/or the Office of Local Government by 15 September 2026.
The final submission will then be reported back to the September Ordinary Council Meeting so that Councillors and the community have access to the document submitted on Council’s behalf.
Mayor Margot Davis said the revised approach was intended to provide a more complete and evidence-based response to the concerns raised by the Minister and the Office of Local Government.
“This is not about pretending there have not been serious problems, because there have been,” Councillor Davis said.
“Council has experienced three consecutive disclaimed audit opinions, significant financial reporting and liquidity challenges, problems arising from the previous financial management system, and broader issues around financial processes, organisational capability and assurance.”
“What Council resolved today was that our response needs to acknowledge those matters honestly, while also accurately showing what has changed, what remains unresolved and what the elected governing body has already done in response,” she said.
Cr Davis said the alternative submission also makes an important distinction between the role of the elected governing body and the operational responsibilities of the Council organisation.
“The Office of Local Government confirmed in our meeting this week that references to ‘Council’ in the proposed Order relate to Council as the entity, rather than automatically being a finding against the elected body.”
“That distinction matters. The elected governing body does not undertake day-to-day accounting, prepare financial statements, manage the Finance team, undertake reconciliations or implement financial systems. Those operational responsibilities sit within the organisation under the General Manager.”
“Our role is to provide strategic direction, make the necessary financial and policy decisions, require appropriate reporting and assurance, and keep the organisation’s performance under review.”
The alternative submission therefore gives greater prominence to formal resolutions of the elected governing body that have already sought to address many of the matters raised in the proposed PIO.
These include Council’s decisions on the Special Rate Variation and Long-Term Financial Plan, requirements for improved cash-flow and contract-asset reporting, stronger workforce-capacity assurance, improvements to ARIC oversight, and the Financial Sustainability Phase 2 resolution adopted in June.
That June resolution requires the General Manager to provide Council with a consolidated roadmap covering financial sustainability, audit, assurance, organisational improvement, systems improvement, workforce capability, risks, resources, delivery timeframes, ARIC reporting pathways and future service-review opportunities.
Cr Davis said this was particularly relevant because OLG officers had expressly supported inclusion of the Phase 2 work during discussions on 7 September.
“OLG made it clear that it wants to see a measurable improvement program with clear actions, delivery dates, progress measures and, where possible, quantifiable financial benefits.”
“That is useful clarification, and it aligns closely with work the elected body had already formally required through Financial Sustainability Phase 2.”
Council’s submission will therefore ask that any final decision on the proposed PIO be deferred until the outcome of the 2025–26 external audit is available.
Cr Davis said the audit outcome would provide important independent evidence about the Council entity’s current financial reporting position.
“The audit is not the answer to every issue, but it is a significant piece of independent evidence and it makes sense for the Minister to have that information before making a final determination.”
“If the Minister does not agree to defer the decision, Council’s submission will take a constructive approach and seek to ensure any final Order is focused on current residual risks, practical assurance and measurable improvement rather than duplicating work already underway.”
The alternative response also adopts a more cautious approach to claims about the new Civica financial system, Finance capability and Council’s cash position.
“Starting a new system, appointing people and reporting stronger unrestricted cash are positive developments, but they are not the same thing as proving that every control, process and capability issue has been resolved,” Cr Davis said.
“That is why the final submission will distinguish between actions that have been completed, improvements that can be demonstrated, and matters that still require evidence or independent assurance.”
Council also resolved that the final submission must not materially depart from the position endorsed by the elected governing body.
“Our objective is a submission that is balanced, credible and defensible,” Cr Davis said.
“It should recognise the progress that has been made without overstating it, clearly identify what still needs to be done, and demonstrate the strategic direction and oversight already provided by the elected body.”
“Council is not arguing that no further improvement is required. The real question is whether the proposed Performance Improvement Order adds sufficient value to justify its additional cost and administrative burden, or whether the same outcomes can be achieved through the improvement, reporting and assurance mechanisms already in place and being strengthened.”
Media Release: Glen Innes Severn Council
