Pre-payment of government grants making council figures look better than expected

Mr McMahon cited the pre-payment of government financial assistance grants as one factor making the figures look better than expected.

READ ALSO: Council cautious about 'surplus' as end-of-year finances tabled

"The biggest anomaly is in the pre-payment of the financial assistance grants. This is a point in time and there's been significant accummulation of pre-payments and we need to be cautious," he said.

Director of business and governance Illiada Bolton said in her report to council the result was better than the original budget of $1.5m deficit.

"The impact of this is we are reporting an inflated net operating surplus because we received those grants in advance," Ms Bolton said.

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"Council's cash and investment balance has improved in FY22 with total cash and cash equivalents of $105m. Council had external restrictions (water, sewer, developer contributions, unexpended grants and loans) of $82m and internal restrictions of $22.5m; the remaining unrestricted cash is $500,000," Ms Bolton said.

In terms of changes to the budgeted figures, there was over $15m increase in the cost of materials and services while employee costs increased by almost $2m. Increases in materials and services can be due to additional funds given to cope with emergency or disaster recovery. There were 348 full time equivalent employees at the year end.

Council collected $25m in general rates and a further $30m in annual charges for waste, water and sewer services.

However council received a qualified audit for 2021/22 due to not recognising rural firefighting equipment as assets within 'Infrastructure, property, plant and equipment'. It is one of 37 councils to receive a qualified audit because the RFS assets were not included.

Councils have protested that they should not be responsible for assets over which they have no control.

"At the August 17, 2022 council meeting, councillors supported council's objection to the NSW Government's determination on ownership of Rural Fire Service (RFS) assets," Ms Bolton said.

ACM asked Deputy Premier and Minister for Regional NSW Paul Toole, why councils had to account for RFS assets, given it could affect their bottom line.

Mr Toole said said it was an accounting requirement and determination of the Auditor General.

"There are opportunities for councils to talk to Treasury so that it's not impacting on the bottom line," Mr Toole said.

The audited figures are available on council's website.

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