Council Audit Briefing 13 May 2016 to 30 June 2017 What will this - PowerPoint PPT Presentation

Council Audit Briefing 13 May 2016 to 30 June 2017

What will this presentation cover? Significant matters for 2017 Level of Cash & Investments Operating Result Performance Ratios Sources of Income General Observations Application of Expenditure Audit Opinion

Significant matters for 2017 ▪ Net operating surplus $5,057,000 ▪ The operating result from ordinary activities before capital amounts ($4,882,000) deficit ▪ User Charges & Fees revenue included $2.6M of RMS roadwork Operating & Capital grants totalled $26.7M ▪ Water & Sewer infrastructure were revalued with a (P&L) ▪ decrement of $6.9M

Consolidated Operating Result $’000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 2017 Before Capital 7,432 After Capital 13,361

Operating Result – Water, Sewer & General Fund $’000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - -2,000 -4,000 -6,000 -8,000 Water Sewer General Water Sewer General Fund Fund Fund Fund Pre Fund Pre Fund Pre After After After Capital Capital Capital Capital Capital Capital 2017 306 306 -6,402 -6,402 1,214 11,153

Operating Revenue – by source $’000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Annual G & C - G & C - User Interest Rates Other Charges Operating Capital Charges Revenue 2017 6,927 5,948 16,787 9,939 6,576 1,350 1,108 Total operating revenue $48,635,000

Operating Expenses – by type Revaluation decrement $6.9M $’000 Stronger Community Grants Paid $1.1M 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Borrowing Employees Materials Depreciation Other Costs 2017 12,093 9,959 9,322 185 12,019 Operating expenses $43,578,000

Cash and Investments 50,000 40,000 30,000 $’000 20,000 10,000 0 2017 Unrestricted 5,483 External 14,154 Internal 21,744 Cash and investments total $41,381,000

Operating Performance Ratio Purpose of this ratio: To assess whether operating expenditure is contained within operating revenue. OLG Benchmark: 0% 6 4 % 2 OLG Benchmark 0 > 0% 2017 4.71 The ratio of 4.71 % exceeds the OLG benchmark of 0% - helped by the amalgamation operating grants and early payment of 2018 FAG instalments

Own Source Operating Revenue Ratio % 100.00 80.00 OLG Benchmark 60.00 >60% 40.00 20.00 - 2017 OSOR 44.77 • This ratio measures Council’s financial flexibility by determining the degree of reliance on external funding sources such as operating grants and contributions. • Increases in the level of grants & contributions will serve to decrease this ratio.

Unrestricted Current Ratio 12.00 9.00 6.00 3.00 OLG Benchmark > 1.5 times - 2017 UCR 8.46 • Council's Unrestricted Current Ratio is 8.46 exceeding the industry benchmark of 1.50x by a large margin and indicating sufficient liquidity that council is comfortably able to satisfy its debts as and when they fall due.

Debt Service Cover Ratio 25.00 20.00 15.00 10.00 5.00 OLG Benchmark > 2.0 times - 2017 DSCR 19.62 This ratio measures the availability of operating cash to service debt including interest, principal and lease payments. The higher the number, the greater the ability to service debt.

External Debt $’000 4,000 3,000 2,000 1,000 0 2017 Term Loans 3,459

Audit findings ▪ Unqualified audit reports issued on General & Special Purpose Financial Statements. ▪ All reporting and disclosure obligations satisfied Management letters issued and acted upon appropriately ▪ We extend our thanks to Council’s staff for their preparation and ▪ assistance.

QUESTIONS