An auditor has identified “significant deficiencies” in the pre-planning and finances of Kiama Council’s ambitious $109 million, 134-bed Blue Haven Bonaira aged care facility, in Kiama, about 120km south of Sydney.
Among other failings, Auditors Forsyth Accounting found the Council underestimated the cost of building the facility by about $30 million.
They found the construction cost of the project was the main factor in the Council’s deteriorating financial position in recent years, which ultimately led, in March, to the Council agreeing to sell all its aged care services at Blue Haven Bonaira to address its financial problems.
The ABC has reported the auditor said the aged care facility was at risk of non-compliance with the Aged Care Act because about $5 million in Refundable Accommodation Deposits (RADs) was spent, but not properly documented before 2019.
Deputy Mayor Imogen Draisma told the ABC the report showed the Council had made some “very poor decisions” in previous years.
“This was a massive project. It was way too big for any council of our size to deliver,” she said.
The project “was too ambitious and now we’re in a very precarious position,” she said.
The SOURCE: This case begs the question: are Councils equipped to understand the cost and complexity of aged care development? Developers require specialised knowledge and experience to be successful.
