Cr Ros Heit - Finance Portfolio Report - 11 October 2017

Financial Report

The financial statements are as at the 30 September 2017.

The financial results are performing to target with 25% of the year completed.  Some of the revenue and expenditure items do not perform on a straight line basis with revenue items reflected when billing occurs and extraordinary expenditure being recognised at the time.  For example,

While the Employee Benefit expense shows the effect of the recent redundancy program and will smooth out over time.

Ratios

All indicators are within the desired range while the Current Ratio is outside range due to the recent rates received and this is a favourable result which will again move back within the limits as the year progresses.

Capex Report

The capex report for this month has been included for the information of Council.  Actual expenditure at the end of September was $5.384m of a total available budget of $35.358m after the first quarter review is adopted by Council.  It is important to note that the 1st quarter revised budget includes the total estimate Works for Queensland Round 2 Projects however these projects are due for completion over two financial years.

1st Quarter Budget Review

Operating Budget

This review has changed the bottom line budget surplus from $577,665 to $561,614 a small swing of $16,051.  The change between General Operations and Plant and Fleet was due to end of quarter internal transactions for overheads.  Of note is the result for Plant and Fleet Operations, that result will be reviewed into surplus in the 6 month budget review.  Table of results is included in a separate report to today’s meeting.   

Capital Budget

First quarter revision adjustments are represented by the inclusion of W4Q Round 1 predicted 2017/2018 expenditure and the addition of W4Q Round 2 projects.

Other major adjustments to the first quarter include the addition of:

• $200,000 to Kingaroy Water - Gordonbrook Dam Spillway; and
• $500,000 to Kingaroy Wastewater - Completion of the Kingaroy Wastewater Treatment plant which will focus on the irrigation pond refurbishment, irrigation upgrades and laboratory fitouts.

Works for Queensland

All approved projects for Round 1 will be completed by the due date of 30 November 2017.

Rating and Rate Recovery

At the conclusion of the recent rate discount period approximately 85% of rates had been paid.  This is the usual take up during the discount period.  First reminder letters were sent on Monday 9 October with the second reminder letter to be forwarded in about the 2nd or 3rd week of November. 

The rate recovery process will continue after that with the first set of outstanding rates to be forwarded the external collection agency Recoveries and Reconstruction for processing.   

External Audit

The external auditors completed the audit and the audited Financials for the year ending 30 June 2017 were signed by the milestone date of 6 October 2017.  No unexpected issues were identified which is well done to the staff in achieving what is expected to be an unqualified audit result.

The Audit highlighted the need to renew Council’s Asset Management Plans which council has acknowledged and is already in progress.  Consultants have been recently appointed to assist in the renewal of these plans which is to progressively occur over the next 3 years in accordance with the Asset Management Strategy.

The Audit also accepted the Business Continuity Plan but noted that the plan is yet to be tested and that further documentation is required for an IT specific plan.  That specific plan will be developed during the year as part of the capital investment to duplicate the IT system in Nanango.