RVC on right path to safeguard ‘fit for the future’ status
RICHMOND Valley Council has received a tick of approval for its financial management from the Audit Office of NSW, allowing it to continue with key projects for the community.
The Audit Office provides an independent examination about the reliability of financial statements produced by state and local governments. It measures the financial sustainability of local governments gauging their short and long-term sustainability through operating surplus ratios, net financial liabilities ratios and asset sustainability ratios.
Council has continued to meet the industry benchmarks for the operating performance ratio and own-source operating revenue ratio, demonstrating it is not overly reliant on external funding sources. The unrestricted current ratio, which represents Council’s ability to meet its short-term obligations as they fall due, continues to be well above the industry benchmark, as does the debt service cover ratio.
There was a reduction in the level of Council expenditure on building and infrastructure renewals, however, the sewer fund achieved an asset renewal ratio above the industry benchmark.
Despite an improvement in the current year, Council did not meet the industry benchmark for rates and annual charges outstanding, which assesses the impact of uncollected rates and annual charges on Council’s liquidity and the adequacy of debt recovery efforts.
Council’s General Manager Vaughan Macdonald said the Auditor-General's Report was a strong endorsement of Council's financial management.
Mr Macdonald said the improvements in key performance indicators demonstrated that Council was taking significant steps forward in the area of financial sustainability, and had taken on board the recommendations of the NSW Treasury Corporation review.
He said while there were many challenges and opportunities ahead, residents could be assured the organisation was in a strong financial position to meet the challenges and seize the opportunities.
He said he was confident the right strong financial platform was in place to take Council into the future.
“The Auditor-General's Report confirms what we have been working towards - a further strengthening in Council’s financial position and an improvement in performance indicators,” Mr Macdonald said.
“Through sound financial management, Council has positioned itself to deliver on the community’s priorities outlined in the Community Strategic Plan so ratepayers are not overburdened.”
Council’s operating result from continuing operations for the 2016-2017 year increased to a surplus of $7,507,000 compared to $1,727,000 in 2015-2016.
The main reasons for the rise were an increase in operating grants and contributions, an increase in user charges and fees, and a decrease in loss on disposal of assets.
Council's revenue increased significantly from $49,353,000 to $56,458,000. The main areas of change are an increase in operating grants and contributions, and an increase in user charges and fees.
Expenditure had a moderate increase from $47,626,000 to $48,951,000. The main areas of change in expenditure are increases in employee costs and materials and contracts, and a decrease in loss on sale of assets.
Cash, cash equivalents and investments increased by $6,269,000 to $38,645,000 at year end.
For further information, or comments from General Manager Vaughan Macdonald, please contact Sharon Davidson on 0419 401 214