€5.5m added to bad debts as businesses struggle to pay rates
CORK County Council has been advised to increase its provisions for bad debts by a further €5.5m, as the local authority continues to struggle to collect rates from businesses.
A recently published report by the Department of Local Government's Audit Service has highlighted a number of issues facing councils across the country.
In the report, the auditor appointed to oversee Cork County Council's 2011 financial statement noted that 'closing arrears increased to €44m at year end, continuing the upward trend in arrears on the main collections' and that the write-off of uncollectable accounts increased to €10.3m, mainly in respect of rates.
'In 2011 the council's provision was increased by €7.8m to €31.2m including fully providing for development levy arrears of €7.3m. Arising from my audit, I requested that the provision be increased by an additional €5.5m to reflect the likelihood of collection at the date of audit," the report read.
County Manager Martin Riordan said that the increasing provisions for bad debts is a reflection on the difficulties facing both the council and businesses.
"The increased provision for bad debts reflects the impact of the deteriorating economic climate on the council's debtors generally.
"The council is constantly attempting to balance the collection of debt and the ability of business and householders to respond," he said.
Meanwhile, the report was critical of Cork County Council's inability to compile a complete and accurate list of its fixed assets for audit, a difficulty Mr Riordan blamed on staff cuts.
"Completing the required reconciliations requires significant resources to carry them out. As a result of a significant reduction in staff numbers, allocating the required resource to the task is proving extremely difficult but some work on improving the position is intended," he said.