Au­dit puts Shire ahead of its peers

Augusta Margaret River Times - - News - War­ren Hately

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.

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