Two unforeseen acts just prior to Christmas have placed the future of the Corryong Neighbourhood Centre (CNC) and the community bakery in financial jeopardy.
Firstly, the Australian government delayed providing $85,000 of grant funding, which had already been spent, until May 2025.
Secondly, the Victorian government’s Department of Families, Fairness and Housing (DFFH) advised it will not be providing any further funding to the organisation and that, unless it is able to clear its debt by the end of January, the Neighbourhood House contract will be cancelled. This includes funding for local youth services.
CNC co-ordinator, Sara Jenkins, said “These two major blows mean that we have returned to work with $125,000 less cash than we expected to receive; no funding for our Youth Program for the next three years and the inability to actually complete the two ‘finished’ federal projects.
“Since its establishment in 2012 with the re-amalgamation of the Corryong Neighbourhood House and the Corryong Community Education Centre, the CNC has been intent on providing services and opportunities to meet identified needs – providing opportunities for employment and training and driving co-operation, progress and innovation throughout the Upper Murray community.
“While always moving forward and largely successfully, this has involved taking on risks and debt and experiencing setbacks.
“As a result, the CNC has been in a very precarious financial position since the Black Summer fires rocked everyone’s lives and businesses in 2020.
“With careful management, additional funds and support from many sources, we have still managed to strengthen our capacity to meet ever increasing community demand for our services, improve and build our vital Youth Program and keep our social enterprises open and employing for five years.
“However, this has come at a heavy financial cost,” Sara explained.
“We have been balancing debt costs and repayments; negative nett assets; increasing payroll and operational costs; and three consecutive years of bakery loss and a resulting goodwill devaluation.
“One of the key reasons the bakery was established as a social enterprise by the CNC 10 years ago, was to provide financial support for our community and youth operations which had previously been restricted and underfunded to the tune of around $100,000 per anum.
“Without bakery profits, stringent measures were taken to eliminate the financial dependence on the enterprise during these difficult times. Where additional funding was not available or sufficient, operating hours and staff hours were reduced. Payroll is by far our biggest expense, at 60 per cent of our total budget.
“Broader community development work was also curtailed and fees were introduced to cover auspice work and delivery of additional programs and projects.
“We also sought external expertise and advice and acted on that and our own learnings to make ongoing improvements in the bakery operations to improve sales and productivity and reduce costs.”
Support needed to save centre
“Although we have managed to have our nonbakery activities break even in 2023/24 and have passed annual audits without being declared insolvent – largely by demonstrated an ongoing capacity to ‘trade out of it’ – we have slipped gradually backwards, until we found ourselves at the end the 2024 financial year with current liabilities of $450,000 with little opportunity to reduce them,” Sara said.
“With major funded projects and bushfire support funds ending and limited opportunities to seek new funding – especially with limited capacity and a very poor balance sheet – we were well aware that the transition back to profitability in the bakery, which was only achieved in December, and the slow claw back to a positive balance sheet and any sort of cash flow security was going to be a difficult journey in 2025 and beyond but we were confident we had done enough to achieve the turnaround.
“However, literally in the week before we closed for the Christmas break, we received two major blows which have now made the recovery journey impossible.
“The federal government has delayed providing $85,000 of grant funding, which has already been spent, until May 2025.
“In addition, major bushfire recovery projects funded by the federal government were completed at the end of 2024. It is usual practice for the final 10 per cent of federal grants to paid ‘on lodgement of final reports’.
“However, that doesn’t mean ‘shortly after lodgement’ – it means ‘after we have taken months to ask for additional information’ or ‘after all 14 partners in the project have conducted audits, lodged their reports with the primary funding body, who then need to be audited and lodge their report with the government’ who then need to ‘take months to ask for additional information’
“This means the CNC is expected to hold and expend $85,000 of its own money and manage the burden of that cash flow shortfall until May 2025,” Sara emphasised.
“The second setback was DFFH slashing its funding.
“Despite receiving comprehensive financial reports and holding regular discussions with us for the past three years and therefore being well aware of our situation and our actions, on December 18th DFFH advised that they consider us to be ‘insolvent’ solely because we ‘cannot meet our debts as and when they become due’.
“They also indicated they will not be paying another cent to our organisation from that date and will be cancelling our NH contract if we cannot achieve a secure financial position by 31 January.
“The deemed insolvency also means that our applications for youth funding covering in the next three years which were submitted in November – and have been successfully obtained through multiple grant rounds for the past nine years – have been rejected without any prior notification or process for appeal.”
The setbacks will have repercussions on the provision of a range of services to the Upper Murray community.
“Firstly, all our existing commitments will be met and as far as possible, we will try to offer services while we try to resolve this dire situation,” Sara said.
“We will complete all our current auspice arrangements, continue to host visiting services, have the Youth Space open for drop-in use and provide Centrelink and Vicroads Agency services at least 12 hours per week.
“However, if we cannot find a resolution more drastic measures may have to be taken.
“The UM Community Garage in Walwa, which has already been severely restricted to operating only when there is work booked as part of the constraints of the past few years, will be closed and sold. The investment made in the property and facilities at Walwa has made it a far more desirable prospect, so hopefully it could be sold before there is too much aesthetic deterioration but the enormous future potential of the asset will be lost to the community.
“Without a funded Youth Worker or team, the vibrant and popular Youth Program will cease including the newly established learner driving program and other successful initiatives which have been established through the Futureproof project.
“The newly renovated Youth Space will be sold, wasting substantial investment in the asset and nullifying 10 years of work to build engagement and sustainability.
“All the current services provided at the CNC will cease – printing, promotion, public computers and internet, social media management, tech support, information, Centrelink and Vicroads, visiting services, use of equipment and vehicles, grants and auspicing, training and education, emergency response, community development and support and all those other things we do when people come in and say ‘I need help’.
“The worst case scenario is that the bakery will be sold or closed if a buyer cannot be secured, almost certainly resulting in fewer jobs.
“If we are ultimately unable to save the CNC, staff entitlements could be lost, assets and property wasted and local service delivery lost. If we are forced to close the doors and ‘sell up’, there could potentially be three empty shop fronts in the main street of Corryong and one on the main corner in Walwa, 23 people out of work and no Centrelink or Vicroads services in Corryong.”
In the meantime, the CNC is in discussion with Towong Shire, the regional NH network, DFFH and other stakeholders to see if a pathway can be found to continue to provide core services in Corryong .
“We are reaching out to all funding bodies and stakeholders to see if there is any funding or influence which could be secured to ease our cash flow crisis,” Sara added.
“We are continuing to closely monitor and manage the bakery to ensure it operates profitably and is able to build on the surplus to avoid further setbacks.
“We are telling everyone and asking for any assistance they can provide – politicians, media, everyone who expresses any interest. The only way we will find help is if our circumstances are known.
“We have also started a fundraising drive – 1000 Steps to Sustainability – seeking donations of multiples of $500 in an attempt to raise up to $500,000 to enable us to recover from the impact of the past five years to continue and build on what we do for the community with a clear road ahead.”
This article appeared in the Corryong Courier, 16 January 2025.