The public can make submissions to the Council up to seven days after the public presentation of the financial statements. The council is required to forward a set of audited financial statements to the Office of Local Government.
BASIS OF PREPARATION
In accordance with the provisions of section 411 of the Local Government Act 1993 (NSW) (as amended), a separate and distinct trust fund is maintained to account for all money and property received by the Council in trust, which must applies only to the purposes of, or in accordance with, trusts in respect of that money. Revenues, expenses and assets are recognized net of the amount of the associated GST, unless the GST incurred is not recoverable by the tax authority.
BASIS OF PREPARATION (continued)
If the transaction is a transfer of a financial asset to enable the municipality to acquire or build an identifiable non-financial asset controlled by the municipality (ie the actual acquisition of the non-financial asset), the council recognizes a liability for the excess of the fair value of the transfer over any related recognized amounts. If the transaction does not enable the municipality to acquire or build an identifiable non-financial asset that would be controlled by the municipality, then any excess of the initial book value of the recognized asset over the related amounts is recognized as revenue.
INCOME FROM CONTINUING OPERATIONS
TOTAL RATES AND ANNUAL CHARGES
INCOME FROM CONTINUING OPERATIONS (continued)
Parking charges and fines are recognized as revenue when the service is provided or when the fine is imposed, whichever occurs first. Other revenue is recorded when the payment is due, the value of the payment is communicated, or the payment is received, whichever occurs first.
TOTAL GRANTS AND CONTRIBUTIONS
EXPENSES FROM CONTINUING OPERATIONS
Superannuation – defined contribution plans Superannuation – defined benefit plans Workers' compensation insurance Fringe benefits tax (FBT).
TOTAL EMPLOYEE COSTS EXPENSED
EXPENSES FROM CONTINUING OPERATIONS (continued)
TOTAL MATERIALS AND CONTRACTS
Auditor remuneration
EXPENSES FROM CONTINUING OPERATIONS (continued). c) Amortization, depreciation and amortization of intangible assets and IPP&E.
TOTAL DEPRECIATION, AMORTISATION AND IMPAIRMENT / REVALUATION DECREMENT FOR INTANGIBLES AND IPP&E
- GAINS OR LOSSES FROM THE DISPOSAL, REPLACEMENT AND DE-RECOGNITION OF ASSETS
- RECEIVABLES
- RECEIVABLES (continued)
- Inventories and other assets
- INVENTORIES AND OTHER ASSETS
- INVENTORIES AND OTHER ASSETS (continued)
- INFRASTRUCTURE, PROPERTY, PLANT & EQUIPMENT (continued)
- INVESTMENT PROPERTY
Financial instruments are initially recognized on the date that the Board becomes a party to the contractual provisions of the instrument. The carrying amount of the asset is reduced and the amount of the loss is recognized in profit or loss.
TOTAL PAYABLES AND BORROWINGS
PROVISIONS
TOTAL PROVISIONS
ACCUMULATED SURPLUS, REVALUATION RESERVES, CHANGES IN ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS
The surplus from the revaluation of infrastructure, tangible fixed assets is used to record increases and decreases in the revaluation of non-current assets. The council's valuation of community land has been carried out internally based on the Valuer General's valuation for assessment purposes where available. This change resulted in an increase in the Council's revaluation reserve and non-current assets.
These errors have been corrected by restating the balances at the beginning of the earliest period presented (July 1, 2017) and transferring the adjustment to the revaluation reserve on that date.
ACCUMULATED SURPLUS, REVALUATION RESERVES, CHANGES IN ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS (continued)
ACCUMULATED SURPLUS, RVALUATION RESERVES, CHANGES IN ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS (continued).
STATEMENT OF CASH FLOWS - ADDITIONAL INFORMATION
CONTINGENCIES AND OTHER LIABILITIES/ASSETS NOT RECOGNISED
- Guarantees
CONTINGENCIES AND OTHER LIABILITIES/ASSETS NOT RECOGNISED (continued)
- Other liabilities
These plans also indicate proposed future expenditures to be incurred by the Council, which will be financed by levying levies and receiving funds in future years or, where there is a shortfall, by using the general resources of the Council. These future expenditures do not qualify as liabilities at the reporting date, but represent the Board's intention to spend resources in the manner and timing set forth in those plans. vi) Potential land purchases due to planning restrictions imposed by the municipality. At the reporting date, reliable estimates of the value of any liabilities (and subsequent land assets) arising from such potential acquisitions were not possible.
Due to the limited information available on the status, value and duration of outstanding notices, the Council is unable to determine the value of outstanding income.
FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT (continued)
The Board applies the simplified approach for non-rate and annual charge receivables to provide for expected credit losses as prescribed by AASB 9, which allows the use of the lifetime expected loss provision. To measure expected credit losses, non-rate and annual charge receivables are grouped based on shared credit risk characteristics and days past due. Creditors and loans are both subject to liquidity risk – the risk that insufficient funds may be on hand to meet payment obligations as and when they fall due.
Borrowing is also subject to interest rate risk – the risk that interest rate movements may negatively affect financing costs and debt servicing requirements.
MATERIAL BUDGET VARIATIONS (continued)
The fair value of assets and liabilities must be estimated in accordance with different accounting standards either for recognition and measurement requirements or for disclosure purposes.
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Level 2 Quoted
FAIR VALUE MEASUREMENT (continued)
Fair value measurement hierarchy
- Own source operating revenue ratio Total continuing operating revenue (1)
- Unrestricted current ratio
DEVELOPER CONTRIBUTION STATEMENT (cont'd) $'000 S7.11 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 6 - Extractive Industries Roads CONTRIBUTION PLAN NUMBER 8 - Rouse Hill Drainage Roads Traffic Facilities Open Space Community Facilities Other1 (Specify) Other. STATEMENT OF DEVELOPER CONTRIBUTIONS (continued) $'000 S7.11 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 9 - Castle Hill Town Center Roads Open Space Other CONTRIBUTION PLAN NUMBER 11 - Annangrove Industrial Roads Traffic Facilities. DEVELOPER CONTRIBUTION STATEMENT (continued) $'000 S7.11 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 15 - Box Hill Precinct Drainage Roads Traffic Facilities Open Space Other CONTRIBUTION PLAN NUMBER 16 - Box Hill North Precinct Drainage Open Space.
STATEMENT OF DEVELOPER CONTRIBUTIONS (continued) $ '000 S7.11 CONTRIBUTIONS – NOT UNDER A PLAN Drainage Roads Traffic Facilities Parking Open Space Other–.
END OF AUDITED FINANCIAL STATEMENTS
COUNCIL INFORMATION AND CONTACT DETAILS
STATEMENT OF DEVELOPER CONTRIBUTIONS WITHOUT INTERNAL LOANS (continued) $000 SUMMARY OF CONTRIBUTIONS AND FEES Drainage Roads Traffic Facilities Open Space Community Facilities Planning Agreement Other Check. STATEMENT OF DEVELOPER CONTRIBUTIONS WITHOUT INTERNAL LOANS (continued) $ '000 S7.11 CONTRIBUTIONS - PURSUANT TO A PLAN CONTRIBUTION PLAN NUMBER 6 - Extractive Industry Roads CONTRIBUTION PLAN NUMBER 8 - Rouse Hill Common Drainage Facilities Roads Other Traffic Facilities. STATEMENT OF DEVELOPER CONTRIBUTION WITHOUT INTERNAL BORROWING (continued) $ '000 S7.11 CONTRIBUTIONS - UNDER ONE PLAN CONTRIBUTION SCHEDULE NUMBER 9 - Castle Hill Town Center Roads Open Space Other CONTRIBUTION SCHEDULE NUMBER 11 - Annangrove Industrial Roads.
STATEMENT OF DEVELOPER CONTRIBUTIONS WITHOUT INTERNAL LOANS (continued) $ '000 S7.11 CONTRIBUTION - UNDER A PLAN CONTRIBUTION PLAN NUMBER 15 - Box Hill Precinct Drainage Roads Traffic Facilities Open Space Other CONTRIBUTION PLAN NO.
Opinion
Basis for Opinion
Other Information
The Councillors’ Responsibilities for the Financial Statements
Auditor’s Responsibilities for the Audit of the Financial Statements
I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Report on the Conduct of the Audit for the year ended 30 June 2019
The Hills Shire Council
INCOME STATEMENT
Operating result
The Council's operating income ($146.9 million including the effect of depreciation and amortization costs of $22.5 million) was $0.6 million higher than its 2017-2018 result. Net operating income before capital grants and contributions ($12.3 million) was $5.3 million higher than 2017-2018 earnings. Contributions to the result were an increase in income from tariffs and annual expenses and an increase in the fair value of investment properties.
The deviation is due to the increase in household waste management fees and the growth of the area.
STATEMENT OF CASH FLOWS
FINANCIAL POSITION
Cash and investments
Operating performance ratio
Own source operating revenue ratio
Rates and annual charges outstanding percentage
Cash expense cover ratio
The 'unrestricted current ratio' is specific to local government and represents the council's ability to meet its short-term obligations as they fall due. Council's asset renewal additions for the year were $17.0 million compared to $17.8 million for the prior year. Asset renewals (excluding ongoing transfers) during the year accounted for 76 percent of the year's total depreciation expense ($22.5 million).
OTHER MATTERS
New accounting standards implemented
Financial Instruments’ and revised AASB 7 ‘Financial Instruments: Disclosures’
Legislative compliance
FINANCIAL
STATEMENTS
SPECIAL PURPOSE
STATEMENT BY BOARDS AND MANAGEMENT 95 2. Income Statement - Other Business Activities 96 Statement of Financial Position - Other Business Activities 97 3. i) These Special Purpose Financial Statements have been prepared for use by both the Council and the Office of Local Government in meeting their requirements under National Competition Policy. In essence, the principle is that public enterprises, whether Commonwealth, State or local, must operate without net competitive advantages over other businesses as a result of their public ownership. iii) For the Council, the principle of competitive neutrality and public reporting only applies to declared business activities. This includes (a) those activities classified as business activities by the Australian Bureau of Statistics, namely water supply, sewerage services, abattoirs, gas production and reticulation, and (b) those activities with a turnover of more than $2M which the Council formally declared as a business activity (defined as Category 1 activities). iv) In preparing these financial statements for the Council's self-classified Category 1 businesses and ABS-defined activities, councils must (a) adopt a corporatisation model and (b) apply full cost allocation, including tax equivalent regime payments and debt guarantee fees (where the business benefits from the Council's borrowing position compared to commercial rates).
NET ASSETS
TOTAL EQUITY
Business activities with gross operating turnover more than $2 million a. Child care
Business activities with gross operating turnover less than $2 million Nil
SIGNIFICANT ACCOUNTING POLICIES (continued)
The debt guarantee fee is designed to ensure that council business activities face 'true' commercial borrowing costs in line with private sector competitors. Accordingly, 'disclosed subsidies' (in relation to National Competition Policy) represent the difference between revenue generated from 'rate of return' prices and revenue generated from prices set by the Council in any given financial year. The actual rate of return achieved by each business activity is disclosed at the foot of each respective Income Statement.
Business activities must generate a minimum yield equal to the Commonwealth 10-year bond yield, which is 3.25% as of 6/30/19.
END OF AUDITED SPECIAL PURPOSE FINANCIAL STATEMENTS
My responsibilities under the Standards are described in the "Accountant's Responsibilities for the Audit of the Financial Statements". Without changing my opinion, I draw attention to Note 1 to the financial statements which describes the accounting policies. The financial statements have been prepared to comply with the Board's financial reporting responsibilities under the LG Code.
In connection with my audit of the accounts, my responsibility is to read the other.
SPECIAL
SCHEDULES
In any year, municipalities can claim the value of the lost income due to valuation objections. The OLG takes these amounts from the council's allowable revenue from general rates in the financial data declaration (FDR) to manage this process. In my opinion, the schedule has been prepared in all material respects in accordance with the requirements of the Local Government Code of Accounting Practice and Financial Reporting – Update Number 27 (LG Code), and is consistent with the books and records of the Council .
My responsibilities under the standards are described in the "Auditor's Responsibilities for Schedule Audit" section of my report.
Emphasis of Matter - Basis of Accounting
As of the date of this independent auditor's report, other information I have received includes the general purpose financial statements, the special purpose financial statements and the special list 'Infrastructure Assets Report as at 30 June 2019'. Government Act 1993 I separately expressed an opinion on general purpose financial statements and special purpose financial statements. In connection with my audit of the listing, it is my responsibility to read the other information and consider whether the other information is materially inconsistent with the listing or my knowledge of the audit, or otherwise appears to be materially misstated.
If, based on the work I have done, I determine that there is a material misstatement of other information, I must report that fact.
The Councillors’ Responsibilities for the Schedule
Auditor’s Responsibilities for the Audit of the Schedule
Infrastructure asset performance indicators * consolidated
- Buildings and infrastructure renewals ratio (1) Asset renewals (2)
- Infrastructure backlog ratio (1)
- Asset maintenance ratio Actual asset maintenance
- Cost to bring assets to agreed service level
Standard: ʊʊʊ Minimum >=100.00% Standard achievement ratio Source for the standard: Code of Accounting and Financial Reporting Practice #27 The ratio is outside the standard. To assess the rate at which these assets are renewed in relation to the rate with.
