Council deficit of €14.3m remains a ‘serious matter’

Donegal County Council

Donegal County Council

DONEGAL County Council’s annual revenue deficit fell last year but it remains a ‘serious matter’ for the Council to address.
The cumulative deficit on the income and expenditure account was €14.35m (€14.97 in 2014) while loans payable by the Council amounted to €135 million at the end of 2015.
As well as this, collection of rates, rents and annuities – all important elements in the financing of local government – remain ‘unsatisfactory’.
Details were included in the Local Government Audit report on the Council’s Annual Financial Statement 2015 which was circulated to Councillors this week.
In his report, Mr Raymond Lavin, Principal Local Government Auditor, also noted that a review of the council’s register for lands and buildings indicated that they had not been properly maintained.
“Significant additional work remains to be performed to identify all historic assets and all way-leaves or permissions in relation to historic assets. It was noted with the exception of the transfer of assets to Irish Water no other work was conducted on this area during 2015,” he said.
In reply, Mr Seamus Neely, Chief Executive, said the comments of the Auditor were acknowledged and the importance of proper asset management was fully recognised.
Commenting on the Council’s overall financial position, Mr Neely said that the improvement on the revenue account for 2015 was €620,934 which means that the deficit has improved from €14.97m in 2014 to €14.35m.
Mr Neely said it was also important to note that the net revenue deficit at the end of 2015 now stands at under €11m.
“Reducing the accumulated revenue deficit remains a key priority,” Mr Neely said.
A summary of the revenue collection in 2015 shows rates at 63%, rents and annuities (90%) and Housing Loans (63%).
“The collection yield for 2015 (Rates) increased by 5% to 63% (remaining unsatisfactory) resulting in year-end debtors of €15.7m, which represents a decrease of €1.9m on the 2014 comparative amount.
“The collection performance of 63% (Housing Loans) is unchanged form the 2014 yield. This collection yield is far from satisfactory. The debtors at year end amounted to €1.15m,” the Auditor noted.
In reply, Mr Neely said that housing loans continue to present a challenge but said that the Mortgage Arrears Resolution Process and associated arrangements were being applied on a case by case basis with a view to achieving a balanced, positive outcome for both the loan-holder and the local authority.
With regard to rates, Mr Neely said that arrears have fallen by almost 11% and in terms of actual cash collected, an additional €2.1m was collected in 2015 compared with 2014.
Last year, Donegal was named as one of five local authorities (including Mayo, Sligo, Waterford and Wexford) that were dealing with a ‘significant deterioration’ in their finances.
The National Oversight and Audit Commission (NOAC) report, which looked into local authority performance all over the country, found that Donegal County Council’s annual revenue deficit had risen from €11.6 to €14.9 million in 2014. The Council’s annual revenue deficit reduced to €14.35m at the end of 2015.

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