Audit puts Shire ahead of its peers
The latest positive financial audit of the Shire of Augusta-Margaret River has highlighted improvements in the local government’s trading position that put it ahead of many other regional authorities.
The Shire’s audit committee met last fortnight to review the audit outcome, which found no noncompliance issues and the Shire operating within favourable parameters for key indicators, including asset renewal.
Although other ratios were better than regional and State five-year averages, the auditors put red flags on the Shire’s ratios for asset sustainability, debt servicing, operating surplus and revenue markers.
Despite the generally upbeat assessment, asset sustainability, operating surplus and revenue were trending downwards in the five-year average.
“While some ratios are below the accepted industry benchmark, given the relative strength of the other ratios and the Shire’s balance sheet, lower ratios may be expected and acceptable in the short term, provided other measures/strategies are maximised,” the audit report noted.
In a teleconference with mem- bers, the Shire’s auditor noted greater scope to raise income by increasing rates on property owners to boost ratios.
Shire chief executive Gary Evershed praised the latest outcome, saying it reflected measures put in place after a forensic audit of the books in 2009.
“The audit results show that the Shire is a strong, financially viable and sustainable local government,” he said.
“Benchmarked against State and regional local governments, we have lower debt servicing, less dependency on grants, and we are funding our asset renewal better than most other local governments as well as running a wide range of services and facilities.”
Mr Evershed noted the Shire still struggled to get out of the red with its operating surplus ratio.
“Currently we do not fully cash back our depreciation, which shows up as a deficit in our operating statement on paper, but we are still outperforming the majority of our State and regional counterparts,” he said.
The Shire now held almost $25 million in reserve, much of it identified for capital works such as waste management, up from $3 million in 2010-11.
“Major investments in community facilities renewal this financial year — with the cultural centre project, the skate park and the million-dollar asbestos-removal program — will see a multimilliondollar spend bring degraded facilities up to a modern standard,” Mr Evershed said.
“New borrowings for the Cultural Centre and skate park will be repaid from developer contributions without impacting the rate base.”
The audit report also noted financial reporting was distorted by early receipt of some financial assistance grants.