City of Wanneroo reassures ratepayers on financial security

THE City of Wanneroo has moved to reassure ratepayers concerned about its financial security following a report on audit compliance.

A resident raised concerns at the September council meeting in response to an August decision noting the City’s failure to comply with an audit report was an “oversight”.

The June 2018 report found the City did not have enough assets compared to liabilities so it had to fix and disclose the issue, reporting to the local government minister within three months.

However, it had not complied after a year, prompting a query from the Department of Local Government, Sport and Cultural Industries.

The audit report found the current ratio was less than 1:1, which meant the City did not have enough assets that could be turned quickly into cash in case of emergencies, such as budget deficits or overdrafts.

In response to the resident’s questions, corporate strategy and performance director Noelene Jennings said the ratios were difficult for the City and “many other councils” to meet because “we build more new assets than maintain old ones”.

“The department is well aware that we are not able to meet that ratio,” she said.

Mrs Jennings said the ratio for unrestricted cash, which fluctuated through the year, was about 3:1 at the September 24 meeting, and gradually decreased to 0.9:1 by the end of the financial year.

Asked about measures put in place so ratepayers would be fully aware of the City’s financial position, Mrs Jennings said the City had been transparent and had always been solvent.

Councillor Domenic Zappa, who works as a financial auditor, asked the director to pull out a calculator in his bid to reassure people at the meeting that the City had a positive working capital ratio.

Confirming it did, Mrs Jennings said it meant the organisation could continue with its business.

In response to further questions, she confirmed the auditor general had not concluded the City was not able to continue as a going concern, nor had there been any adverse findings.

“The City does have a current asset position and is able to pay its debts as and when they fall due,” Cr Zappa said.

In response to questions, Mrs Jennings said the City only had to report to the department for one year, not three.

“There’s just one year of reporting to the department that we missed because the auditor had decided to report in a different way last year,” she said.

The City also published a statement on its website on Friday outlining the value of its assets and focus on “responsible financial management”.