Council CEO Bernard Smith says the government’s financial position has ‘strengthened significantly’ since the last financial statements were lodged with the auditor general.
Council CEO Bernard Smith says the government’s financial position has ‘strengthened significantly’ since the last financial statements were lodged with the auditor general.

CEO: Council has a plan to return to surplus

CEO Bernard Smith has defended Gympie council’s financial position in the wake of a critical state audit report, saying the organisations’s position “strengthened significantly” in the past eight months.

The Queensland Audit Office today revealed the council’s long-term sustainability risk rating has changed from the lowest level to “moderate”.

This was driven by the council running at an operational loss in three of the past four years, including an $11 million deficit last year.

However Mr Smith said the audit office’s report reflected the council’s position as of June 30 last year and is now expecting a cash position $2 million greater than first forecast for the 2019-20 year.

Gympie Town Hall
Gympie Town Hall

“The long-term financial model shows cash reserves at least $20 million greater on average than originally forecast over the coming years,” he said.

Although the council will run at another loss this year, Mr Smith said this was a conscious decision and a”plan is in place to return to surplus”.

“Periodic deficits are acceptable and many councils have run them for a significant period of time, however Gympie Regional Council does not wish to do this.

He said the latest audit result reflected issues around accounting standards and non-cash items like depreciation.

“Council recognises processes need to improve, in particular the recognition, valuation and depreciation of new assets,” he said.

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.

“There has been some commentary regarding the overall reduction of council cash reserves, however local government in the past has been criticised for taking money away from the ratepayer and not spending this money back into the community.

“Cash reserves need to be at an acceptable, not an excessive level.”

And he would be worried if the downward operating surplus trend continued in the future “however this is not the case”.

“Since June 30 council has strengthened its position, currently has very low debt, will have a year-end cash position almost $2 million better than originally forecast, and will continue to have a sharp focus on cost containment,” Mr Smith said.

“The 2018-2019 financial year was very challenging.

“This audit reflects this, however some great progress has been made since June 30, 2019 to ensure Council has a sound and sustainable financial future.”