29-10-2024
Upper Lachlan Shire Council met on 28 October 2024 with the draft Financial Statements tabled in accordance with the Local Government Act 1993. Council resolved at the meeting that the 2023/2024 Financial Statements will be referred for independent external audit by the Audit Office and be signed by Mayor, Deputy Mayor, Chief Executive Officer and Chief Financial Officer.
The referral for audit of the Financial Statements is a standard industry requirement and the Financial Statements have been prepared in compliance with:
• The Local Government Act 1993 and Regulations;
• The Australian Accounting Standards (AAS);
• The Office of Local Government Code of Accounting Practice and Financial Reporting;
• The Financial Statements have been reviewed and endorsed by the Audit, Risk and Improvement Committee (ARIC) Meeting.
The Income Statement shows Council has recorded a net operating result deficit, before capital grants and contributions provided for capital purposes of $4.461 million (original budget was $4.303 million deficit). This result was heavily impacted by non-cash items including; $3.739 million net loss from disposal of assets and increase in assets depreciation expense above budget projections. The asset disposals or write-off are required by Australian Accounting Standards. It should be noted the Operating Performance Ratio benchmark (-1.58%) specifically excludes these non-cash items.
Council has achieved 4 of 6 consolidated financial performance measures in 2023/2024 as seen at Note G5-1 of the Financial Statements. Council management will continue to carefully monitor these benchmarks.
One such financial performance measure at Note G5-1 sees the Unrestricted Current Ratio of assets to liabilities as 2.49%. This ratio shows that all liabilities of Council are adequately covered by current assets and Council remains in a sound financial position to meet these liability expenses.
In the Statement of Financial Position, this shows that Council overall total cash position has improved. Total cash includes investments and cash and cash equivalents, totalling $35.289 million (2023 – was $34.092 million cash).
It is important to note that $34.884 million of the total cash is not available for discretionary general use by Council as these funds include internal and external restrictions on their use and are to be used only for the purpose which they were received and/or purpose of collection; i.e. sewer, water supply, DWM, Section 7.11 and Section 64 development contributions and specific purpose unexpended grants. Council unrestricted cash position has improved to $405K from (2023 – $117K). However, this falls short of the target $2million unrestricted cash position as recommended in the 2023 AEC Group Financial Sustainability Report.
Council has already taken steps as recommended in the November 2023 AEC Group Financial Sustainability Report to increase Council unrestricted/discretionary cash position; these steps include service level decisions taken by the previously elected Council, Council decisions to sell surplus buildings and sell surplus plant and equipment, Council management undertaking business unit service reviews and an organisation restructure that was concluded in September 2024. The positive operating cost reductions and increased cash generation from these tough, yet prudent decisions will be more acutely seen in the Financial Statements results in the years ahead.
Mayor Paul Culhane said;
“I would like to convey my thanks to the Council Finance team in compiling the Financial Statements and all supporting audit documentation in such a timely fashion to meet the Office of Local Government lodgement deadline for submission of Financial Statements.”
Councillors and the senior management team will work together to continue to deliver quality services to the community whilst remaining focused on ensuring a financially sound Council into the future.
The Council 2023/2024 Financial Statements and the Independent Auditors Report and the Conduct of Audit Report from the Audit Office will be publicly presented at 21 November 2024 Council Meeting.