Cherbourg Council CEO Chatur Zala and Mayor Elvie Sandow, front, with senior Council managers Darren Lonergan, Edwina Stewart, Sean Nicholson and Sam Murray (Photo: CASC)

May 19, 2022

Cherbourg Aboriginal Shire Council managed its finances extremely well in 2021, better than nearly all Indigenous councils and better than some local non-Indigenous councils.

The Queensland Auditor-General’s annual Local Government report – which reviews the audited financial statements of 77 councils – showed that Cherbourg and Hope Vale were the only two Indigenous councils in Queensland to receive a perfect score.

Assessments by the Queensland Audit Office (QAO) of financial sustainability risk gave Cherbourg and Somerset councils three green lights; South Burnett, Western Downs and Gympie councils received two greens and an amber; and the North Burnett council received two greens and a red.

Cherbourg’s net financial liabilities ratio (19 per cent) – which measures the ability of councils to pay their debts when they fall due – was well up on the average (-45.36 per cent).

So was its current asset sustainability ratio (141 per cent), which measures the ability of a council to replace assets at the end of their useful lives (60.67 per cent).

And CASC’s average operating surplus ratio (5.42 per cent) – which indicates the extent to which revenues cover expenses – was also well above the cluster average (-18.83 per cent).

While most of the State’s 17 Indigenous councils were now rated as being at high risk of becoming financially unsustainable, the Auditor-General graded Cherbourg’s risk as low.

Last October, Auditor-General Brendan Worrall  praised Cherbourg for submitting its audited financial statements well ahead of the statutory deadline.

He said Cherbourg was the 23rd local government out of the 77 councils across Queensland to get its financial reports certified by the QAO in 2021.

“It’s obviously a reflection upon the appetite for good governance, of which financial reporting is a part,” he said.

On Thursday, CASC CEO Chatur Zala said he was very pleased with the report.

He said it capped off 10 years of hard work by Councillors and the Council’s finance and management team to turn the community’s fortunes around.

Despite having to depend on unpredictable government funding to operate, and battling through two years of the pandemic, floods and bushfires, he said Cherbourg had been able to add to its community facilities, build housing and create revenue-raising businesses such as the town’s recycling centre.

“Council has also grown, and I’m very proud to say we now employ 120 staff,” he said.

“We are achieving what we always wanted to achieve, and this report indicates our Council is heading in the right direction.”

* * *

South Burnett Mayor Brett Otto

The South Burnett Regional Council (SBRC) is also pleased with its report.

The SBRC is one of nine councils included in the Rural-Regional cluster along with Goondiwindi, Lockyer Valley, Mareeba, North Burnett, Scenic Rim, Somerset, Southern Downs and Tablelands.

The Auditor-General found the SBRC performed well above average on the crucial net financial liabilities ratio (9.1 per cent) compared with the median for Rural-Regional Councils (-31.41 per cent).

The region’s current asset sustainability ratio was also above average (110.7 per cent) compared with similar councils (102.31 per cent).

However, its current operating surplus was negative (-1.6 per cent against a cluster average of -0.45 per cent).

CEO Mark Pitt said he was delighted.

“South Burnett Regional Council is way ahead in the financial health stakes,” he said.

“Importantly, the South Burnett’s relative risk assessment indicator was at the lowest end of the spectrum. Our cash position is strong, and our loan levels and debt management are all within respectable limits.”

Mayor Brett Otto said the report was encouraging but cautioned that while the SBRC’s historical financial performance was sound, the future financial sustainability of council will come with challenges.

“We are going to need to be very careful about the decisions we make moving forward,” Mayor Otto said.

“Council has reported deficits for the past two years and is likely to do so again in 2022-23.”

He said this was the result of increasing depreciation costs due high to asset revaluations, and proposed cuts to the Council’s annual Financial Assistance Grants (FAGs).

“The Queensland Grants Commission has reduced Council’s FAGs grants by $1.5 million over the next three years, a decision that has me completely baffled,” the Mayor said.

“We have written to the Queensland Government (about this) but received no satisfactory response.”

The Mayor said the FAGs funding cut and inflationary pressures will give rise to significant challenges for both the South Burnett community and the Council in the years ahead.

“More than ever, we will need to manage our finances very carefully,” he said.

* * *

The QAO provides an interactive dashboard that allows the public to examine their council’s key financial performance indicators over the past four years, 2018-21.

This data shows the relative risk of the South Burnett Regional Council becoming unsustainable was low in 2018, and this remained unchanged in 2019, 2020 and 2021.

This is the same as neighbouring Somerset and Western Downs councils.

However, over the past year Toowoomba has reduced its risk of becoming unsustainable from moderate to low.

Gympie Regional Council is now rated as being at moderate risk and the North Burnett is high risk.

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2 Responses to "Auditor-General Gives Councils A Tick"

  1. I’m really happy for Cherbourg Council in achieving a great Audit result. Congratulations to CEO Chatur Zala and Mayor Elvie Sandow and staff. The result of hard work over the past 10 years has produced an admirable result. The Council’s finance and management team have managed to turn the community’s fortunes around. Fantastic result.

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