Audit reports finds sustainability a serious concern for Gympie region.
Audit reports finds sustainability a serious concern for Gympie region. Contributed

CEO refutes council financial worries

GYMPIE regional council is one of a number of councils in danger of becoming financially unsustainable according to a new report released by the Queensland Audit Office.

The report gave Gympie an average asset sustainably ratio of 71.63%, which was expected to trend downwards over the next decade.

The rating sits within the lowest quarter of all 77 councils' sustainable ratio ratings in the report, and is indicative of "a declining asset base and/or inadequate asset management plan", or relatively new assets (from repair or renewal from natural disasters, for example) which do not require replacement yet.

Gympie Council CEO Bernard Smith has said he is not worried by the findings of the report, believing the council is well placed to continue to maintain its assets.

Gympie Regional Council CEO, Bernard Smith.
Gympie Regional Council CEO, Bernard Smith. Renee Albrecht

"I'm very confident," Mr Smith said today, noting he had not yet had a chance to read the report.

He pointed out the council had had "successive operating surpluses" recently, and were aware care was needed due to the continual rise of costs.

"We've been recognised for quite a while as being in a... financially responsible position."

According to Mr Smith, who was standing in for Mayor Mick Curran who was unavailable due to health reasons, the council is responsible for assets totalling $1.2 billion, $1.1 billion of which were physical assets.

Mr Smith said the council did need to be wary in how it manages them.

"We do need to be careful, we always need to be careful in terms of the assets and how we maintain them, but there is - in terms of our recently audited figures - there's no cause for concern.

"We keep an eye across our whole asset base. That's what we need to do on an annual basis, that's what we're required to do so we need to be very vigilant in terms of how we manage our assets."

Mr Smith said the council was responsible for regularly keeping track of the state of its assets.

"We need to continually assess our assets; we need to have very robust asset management systems in place. We recently introduced a totally new asset management system, so it's a matter of being vigilant.

He admitted the council's asset management plan "is immature", but said it was taking proactive steps to ensure its quality was improved.

The report also found the council would maintain its current ratio of state funding support over the next 10 years, which Mr Smith said was about $17 million - less than 20% of the council's annual income.

However, the report highlights government grant funding has historically been in decline, bringing into question the ability of councils to continue to rely on them.

"Inaccurate forecasting" was another problem highlighted in the report, which said many councils were relying on "incomplete or inaccurate asset condition data".

Hilary Smerdon
Hilary Smerdon

Cr Hilary Smerdon said he believed the council was using reliable data in its decisions.

"As far as I'm concerned, at this stage anyway, the financial information that we're given is fairly accurate," Cr Smerdon said, adding he believed it would remain so as long as the current procedures remained in place.

While Cr Smerdon had also not read the report this morning, he said he was confident in the council's financial position going forward.

"I think it's always on our mind. You've got to have good financial management of all assets, that's paramount. As far as I'm concerned, financial stability is good through Gympie Regional Council this stage."

One area in which the report indicates the council was performing well was operating surplus, with a ratio of 7.09% and expected to trend upwards in the future.

According to the report, a ratio exceeding the benchmark of 10% would indicate "the council is raising more revenue than it needs".

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