Financial Reporting: Council to Present Draft 2023/24 Statements

Published on 05 September 2024

Transparent Financial Reporting: Council to Present Draft 2023/24 Statements

Wingecarribee Shire Council's draft financial statements for the financial year 2023/24 will be presented to the Extraordinary Council meeting on September 9, 2024.

The draft financial statements have been reviewed by the Audit Risk and Improvement Committee (ARIC) and endorsed to be tabled to Council at the coming Extraordinary Council meeting. This additional, independent review provides assurance to Council and community on the financial transparency in preparing the draft financial statements.

The NSW Auditor-General's Office will audit the financial statement to ensure compliance with accounting standards before it is presented by the incoming Council in November.

Summary of Financial Outcomes:

• Working Capital Above Benchmark: Despite these challenges, Council’s revised unrestricted working capital position exceeds the benchmark of $5.8 million by $278K, reflecting prudent financial management with timely and transparent reporting on Council’s financial position.
• Financial Benchmarks: Council has met all financial benchmarks, except for the Operating Performance Ratio, which had a positive trend in comparison to the 2022/23 financial year but did not exceed the benchmark. Council met all its Infrastructure benchmarks noting that the condition of the network deteriorated which is directly attributed with natural disasters.

Key Contributing Factors:

In reviewing the 2023/24 budget against the original adopted budget, the following matters occurred and were addressed during the year:

• DA Consultant Costs: Due to staff vacancies, Council has relied heavily on consultants to process development applications during the year. While consultant costs were partially offset by staff vacancies, a gap remained and were reviewed and updated during the year. These costs will decrease as we build a stronger in-house team.
• Delayed Disaster Recovery Funding: Ongoing natural disasters have led to delays in receiving $6.2 million in disaster recovery funding from Disaster Recovery Funding Arrangements (DRFA). Wingecarribee Shire has experienced one disaster every four months, on average, placing it equal first in the state for natural disaster frequency. This funding is critical for repairing roads and infrastructure, but Council has had to forward-fund works while awaiting reimbursement, affecting cash flow. Council has forward funded $14.34 million in grant related works as at 30 June 2024.
• Projects Carried Forward: Several projects initially scheduled for completion in the 2022/23 financial year were delayed due to natural disasters and have been carried forward to the 2023/24 financial year.

In reporting these variances, updates on these matters have been provided to ensure that Council has been informed of the financial impacts of these contributing factors through the Quarterly Budget Review.

The report to Council, includes a detailed reconciliation of the Council’s unrestricted working capital position, showing the impact of grant debtors and contract assets on the final working capital figure ($14.34M). As part of this, Council proposes a temporary release of funds from internally restricted reserves, totaling $14.34M, with plans to replenish these reserves in the 2024/25 financial year once these funds are received.

“We have been transparent throughout this process, reporting these material variances to Council through quarterly budget review cycles and we’ve maintained a healthy working capital position,” said Council’s Chief Financial Officer, Pav Kuzmanovski. “We’re committed to improving our processes and advocating for necessary reforms to ensure the long-term sustainability of our financial operations.”

Council is committed to improving development application processes and reducing reliance on external consultants. We are also advocating for improvements in disaster funding arrangements to better support our community.

For further information, please see the September 9 Extraordinary Meeting agenda via Council’s website: Council Meeting Minutes and Agendas | Wingecarribee Shire Council (nsw.gov.au)