Gympie Regional Council’s (pictured here CEO Bernard Smith) is at growing risk of long-term financial unsustainability, the Queensland Audit Office says.
Gympie Regional Council’s (pictured here CEO Bernard Smith) is at growing risk of long-term financial unsustainability, the Queensland Audit Office says.

Audit reveals council's coffers don't look healthy

CRACKS continue to grow in Gympie Regional Council's financial foundations with the latest state audit finding it is at growing risk of becoming financially unsustainable.

The Queensland Audit Office's 2018-19 report revealed the council was at "moderate" risk of becoming financially unsustainable in the long-term.

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It is the first time since 2012 the council's risk has changed, having previously sat at the lowest level.

This shift was driven by the council's continued operating losses including last year's $11 million deficit.

Gympie council’s ongoing operating losses continue to haunt it.
Gympie council’s ongoing operating losses continue to haunt it.

Its operating ratio now sits at -3.5 per cent, the lowest among all coastal councils.

The council's net financial liabilities ratio and average asset sustainability ratio also dropped.

Financial governance in the council was also a problem.

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The report rated the quality of the council's draft financial statements as below average, needing material adjustments to some parts.

Council CEO Bernard Smith has responded to questions about the report's findings.

Overall the QAO's audit found financial sustainability continued to be a concern for Queensland's councils.

"More than half of the councils continue to spend more delivering services to their community

than they receive in revenue from rates, fees and charges, and grants," the report said.

"Councils need to know which services their communities value.

Councillors Hilary Smerdon, Dan Stewart, Glen Hartwig, Bob Leitch, Mick Curran, Bob Fredman, Mal Gear, Daryl Dodt and Mark McDonald.
Councillors Hilary Smerdon, Dan Stewart, Glen Hartwig, Bob Leitch, Mick Curran, Bob Fredman, Mal Gear, Daryl Dodt and Mark McDonald.

"This enables them to make informed decisions when deciding which services to provide and when managing costs."

The increasing cost of maintaining and replacing assets was another problem, along with stronger controls on internal governance.

Despite some improvements the number of "significant control issues … indicates there are still systemic problems with councils' internal control frameworks," the report said.

"By not addressing these vulnerabilities in internal controls, councils are exposed to risk of fraud or errors."

The QAO has asked the State Government change legislation to require all councils to have audit committees, change sustainability ratios and require published financial statements for entities controlled by councils.