Footing the bill for flood repairs left Forbes Shire Council looking well short of its forecast $3.3 million budget surplus in the last financial year.
Chris Clayton, NSW Audit Office, presented Council’s 2016-17 financial results to the November Council meeting last Thursday.
He said Council was in the black by $410,000, but with a much lower surplus than budgeted.
Council’s operating result was $4.5 million down on the previous year’s $5 million surplus, but much of that was due to unfortunate timing with the funding of flood road repairs, Mr Clayton said.
Council saw a 27.5 per cent – or $3.2 million - increase in materials and contracts because of repairs and maintenance that had to be carried out after the devastating floods of last September and October.
Much of the money was receipted back to Council in July, too late to balance out this year’s financial results, Mr Clayton explained.
He confirmed that that would have a very beneficial impact on the 2017-18 budget.
Forbes also saw a 10.8 per cent drop – or $1.4 million less – in income from user charges and fees.
Mr Clayton outlined that Council had received $100,000 more in ordinary rates and a $312,000 more in annual charges due to an increase in rateable properties.
The Audit Office, which is overseeing local government end of financial year results for the first time, gave Council’s financials “a clean bill of health”.
“I am presenting an unmodified audit,” he said.
The officers only flagged a couple of results that were outside the recommended benchmarks, one of which was outstanding rates.
The other was the financial operating ratio, explained by the financial outlay for flood repairs.
Cr Chris Roylance asked whether those rates were from residents who had suffered flood damage or loss and been unable to pay their rates.
Acting director corporate services Ian Prior said they were long-term issues.
Cr Phyllis Miller asked how Council could address the issue and bring Forbes within the guidelines.
“I’m staggered,” she said.
“It’s really important that we meet those benchmarks, we will be a red flag.”
New general manager Steve Loane said Council was well covered with options to recover outstanding rates over the long term, but could certainly take a more aggressive approach to getting the debts paid.
“I am happy to more actively pursue it,” he said.
Council asked for a report to the December meeting outlining options.
Councillors asking whether the Audit Office would be conducting performance audits as well as financial across local government.