Council in a safe financial position according to auditor
Wednesday November 19, 2008
Auditor Jeff Shanks (from Morse Group) addressed a special meeting of Cobar Shire Council last Thursday to discuss a recent audit and council’s financial performance.
Cobar Shire Council’s “sound” policies have ensured its cash investments have been largely sheltered from the current turbulence in the global financial markets.
Auditor Jeff Shanks from Morse Group
made a presentation to council last Thursday where he commended council’s director of corporate and community services Wally Black and his team for a “safe” approach to investments.
“Cobar has had very limited exposure to the financial crisis.
“Across the state a number of council investments collapsed significantly, due to poor decisions.
“A lot of NSW councils lost millions,” Mr Shanks said.
According to an audit of the council completed after the end of the 2007-08 financial year, Cobar Shire Council “performed above budget expectations”.
“Council should be pleased with the result of the last 12 months,” Mr Shanks said.
He gave a brief overview of a number of aspects of council’s financial situation, saying one of the most pleasing aspects was council’s continued lack of debt.
“The external debt service ratio is zero.
“Council has not borrowed money for quite a long time,” Mr Shanks said.
Council’s income for the year was mostly dominated by grant revenue, and Mr Shanks said rates and charges income also increased on the previous years.
“That is most likely due to an increase in the number of assessments (since Pioneer Estate opened),” he said.
“Council also made a good gain on the disposal of assets, mainly due to the sale of Pioneer Estate.”
He said a decrease in income from water supply and user charges was recorded, but was expected due to harsh water restrictions during last summer.
Mr Shanks said the most significant expenditure by council was “employee costs”, at around $8 million, describing it as “to be expected”.
The auditor’s report also showed a major change in council’s liquidity last year, measuring restricted and unrestricted cash.
“Liquidity is a key area of measuring financial strength and viability.
“Council’s unrestricted funds are at their lowest level for quite a while, but it is quite comfortable at the moment,” Mr Shanks explained.
“This is because council has transferred more to internal restrictions (for example for future projects).”
Mr Shanks said the auditors’ job was helped by the fact that council “met all the reporting requirements”.
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