Community out of pocket after $195,000 lost in unclaimed GST

 

An internal investigation is now
underway after council rejected a request by
the Toodyay Shire administration to write off
$195,000 in unclaimed GST owed to the shire
by the Australian Taxation Office (ATO).
Council instead voted to support a
recommendation by the Audit and Risk
Committee to do more investigation and get
external advice.
The request to write off the funds as a loss
was made because a four-year window open to claim the money has now closed.

Community cost

In response to questions asked at the December council meeting, the shire confirmed the loss would decrease the available funds which it would otherwise use to deliver services to the community.

          “The community will have to bear the brunt of this in the 2025/26 year

    by reducing the amount of funds available for much needed community projects.”

A report to the Audit and Risk Committee said, as part of council’s standard end of year procedure, a reconciliation should have been done to ensure that all monies owed to the shire by the ATO in the form of GST credits had been claimed.
“And if not, lodge revised Business Activity Statements (BAS) to ensure those monies are claimed and received by theshire,” the report said.
But an investigation found that no reconciliation of GST had occurred.
Records also showed a large amount of money held by the Australian Tax Office that was owed to the shire in the form of GST credits for purchases made by the shire.
“The reconciliation showed that $633,000 was owed to the shire by the ATO dating back to 2020.”
The report said under the ATO rules, the shire was only able to amend BAS returns dating back four years.
Funds owed from before December 2021 cannot be claimed by the shire and this equates to $195,000.
The report also noted that this credit should have been picked up by management when preparing the annual financial statements each year, but there was no evidence that
this had happened.

One mistake spans two shire administrations

The historic failure to identify the money owed by December 2024 spanned successive shire administrations, including the current one.
Toodyay Shire chief executive officer Aaron Bowman told The Herald the matter was not brought to his attention by the then executive manager of corporate and community.
Mr Bowman said the issue only came to light when the current executive manager of finance and corporate services completed the year end GST reconciliation, at which point it
was formally reported to him.
The Herald questioned why the opportunity to retrieve some of the GST up until December 2025 had not been taken.
Mr Bowman said as the matter was only raised with him towards the latter part of 2025 the opportunity to act earlier had already passed.
“Additionally, the year end reconciliation process required significant time to complete, which further restricted the window for recovering any remaining GST,” he said