Notes to the Budget Statements
Town of Eagle Bay
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
Note
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Page
Significant Accounting Policies
Revenues and Expenses
Acquisition of Assets
Disposal of Assets
Information on Borrowings
Reserves
Net Current Assets
Rating Information
Specified Area Rate
Service Charges
Rate Payment Discounts, Waivers and Concessions
Interest Charges and Instalments
Fees and Charges
Elected Members’ Remuneration
Notes to the Statement of Cash Flows
Major Land Transactions
Trading Undertakings and Major Trading Undertakings
Section 4 - Budget Process – Page 45
50
66
74
76
78
82
86
88
90
90
92
92
94
94
96
98
100
Note 1
DLGC
Commentary – Summary of Significant Accounting Policies
Australian Accounting Standards do not require specific disclosures in the
Budget. However, it is recommended to disclose council policy for consistency
with the annual financial report. Some classifications are referred to in the
budget document and inclusion in the Significant Accounting Policy provides
information with respect to their composition.
Refer to Accounting Manual Section 6.4 for commentary on Significant
Accounting Policies.
Section 4 - Budget Process – Page 46
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
1.
AASB 101.117
(a) Basis of Accounting
The budget has been prepared in accordance with applicable Australian Accounting Standards
(as they apply to local governments and no-for-profit entities), Australian Accounting
Interpretations, other authoritative pronouncements of the Australian Standards Board, the
Local Government Act 1995 and accompany regulations.
AASB 1054.7
AASB 108.13
SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies which have been adopted in the preparation of this budget
are:
Except for cash flow, the budget has also been prepared on the accrual basis under the
convention of historical cost accounting, modified where applicable, by the measurement
at fair value of selected non-current assets, financial assets and liabilities.
FMR r. 22(2)
(b) The Local Government Reporting Entity
All Funds through which the council controls resources to carry on its functions have
been included in the financial statements forming part of this budget. In the process of reporting
on the local government as a single unit, all transactions and balances between those funds
(for example, loans and transfers between Funds) have been eliminated.
FMR r. 30(2)
(c) Previous Actual Balances
Balances shown in this budget as Previous Actual are as forecast at the time of budget
preparation and are subject to final adjustments.
FMR r. 15(3)
(d) Rounding Off Figures
All figures shown in this budget, other than a rate in the dollar, are rounded to the nearest
dollar.
AASB 101.51(e)
AASB 1004.30
(e) Rates, Grants, Donations and Other Contributions
Rates, grants, donations and other contributions are recognised as revenues when the
local government obtains control over the assets comprising the contributions. Control over
assets acquired from rates is obtained at the commencement of the rating period or,
where earlier, upon receipt of rates.
Interpretation1031
(f)
AASB 1004.27
Goods and Services Tax
In accordance with recommended practice, revenues, expenses and assets capitalised
are stated net of any GST recoverable. Receivables and payables in the statement of
financial position are stated inclusive of applicable GST, cash flows are presented on a
gross basis.
(g) Superannuation
The council contributes to a number of Superannuation Funds on behalf of their employees.
Section 4 - Budget Process – Page 47
Note 1
Commentary – Summary of significant accounting policies
(Continued)
Refer to Accounting Manual Section 6.4 for commentary on Significant
Accounting Policies.
Section 4 - Budget Process – Page 48
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 107.6
AASB 107.45,46
(h)
Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and
in hand and short-term deposits with an original maturity of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value. For the purposes of the Cash Flow Statement, Bank overdrafts are
included as short-term borrowings in current liabilities.
AASB 101.78(b)
(i)
Trade and Other Receivables
Trade and other receivables include amounts due from ratepayers for unpaid rates and
service charges and other amounts due from third parties for goods sold and services
performed in the ordinary course of business. Receivables expected to be collected within
12 months of the end of the reporting period are classified as current assets. All other
receivables are classified as non-current assets. Collectability of trade receivables is
reviewed on an ongoing basis. Debts that are known to be uncollectible are written off
when identified. An allowance for doubtful debts is raised when there is objective evidence
that they will not be collectible
AASB 102
(j)
Inventories
General
Inventories are valued at the lower of cost and net realisable value. Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
AASB 102.9
AASB 102.36(a)
Land Held for Resale
Land purchased for development and/or resale is valued at the lower of cost and net
realisable value. Cost includes the cost of acquisition, development, borrowing costs and
holding costs until completion of development. Finance costs and holding charges incurred
after development is complete are recognised as expenses. Revenue arising from the sale
of property is recognised in the statement of comprehensive income as at the time of
signing binding contract of sale. Land held for resale is classified as current except where it
is held as non-current based on council's intention to release for sale.
AASB 102.9
AASB 102.10
AASB 102.36(a)
AASB 116
(k)
Fixed Assets
Each class of fixed assets is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
FMR r. 17A
FMR r. 17A(4)
Mandatory Requirement to Revalue Non-Current Assets
Following the phasing in of fair value in relation to fixed assets by 30 June 2015, thereafter
each asset class must be revalued at least every 3 years in accordance with the date set
down in the FMR. Relevant disclosures, in accordance with requirements of Australian
Accounting Standards, have been made in the financial report as necessary.
FMR r. 16(b)(i)
Land Under Control
In accordance with the FMR, the council is required to include as an asset, land which is not
owned but under the control or management of council and which is used as a golf course,
showground, race course or any other sporting or recreational facility of state or regional
significance. Upon initial recognition of assets, these assets were recorded at cost in accordance
with AASB 116, classified as land and revalued with other land in accordance with other policies
at detailed in this note. After being initially recorded at cost, they were revaluated with other Land
and Building at 30 June 201X.
Section 4 - Budget Process – Page 49
Note 1
Commentary – Summary of significant accounting policies
(Continued)
Refer to Accounting Manual Section 6.4 for commentary on Significant
Accounting Policies.
Section 4 - Budget Process – Page 50
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 116
AASB 116.15
(k)
Fixed Assets (continued)
Initial Recognition and Measurement between Mandatory Revaluation Dates
All assets are initially recognised at cost. Cost is determined as the fair value of the assets
given as consideration plus costs incidental to the acquisition. For assets acquired at no cost
or for nominal consideration, cost is determined as fair value at the date of acquisition. The
cost of non-current assets constructed by the council includes the cost of all materials used in
construction, direct labour on the project and an appropriate proportion of variable and fixed
overheads.
AASB 116.73(a)
Individual assets acquired between initial recognition and the next revaluation of the asset
class, are carried at cost less accumulated depreciation which it is believed approximates fair
value. They will be subject to subsequent revaluation at the next anniversary date in
accordance with the mandatory measurement framework.
AASB 116.Aus39.1,
AASB 116 Aus40.1
AASB 116.Aus40.2
Revaluation
Where the carrying amount of a class of assets is increased as a result of revaluation. The net
revaluation increase is recognised in other comprehensive income and accumulated in equity
under revaluation surplus, except to the extent that it reverse a net revaluation decrease of the
same asset class previously recognised as an expense, in which case the increase is
recognised as income.
Revaluation decrease is recognised as an expense, except to the extent that it offsets a
previous revaluation increase for the same asset class, in which case the decrease is debited
directly to the asset revaluation surplus to the extent of the credit balance existing in
revaluations reserve for that asset class.
Revaluation increases and decreases relating to individual assets within the same class of
assets are offset against one another within that class but are not offset in respect of assets in
different classes.
Land under Roads
In Western Australia, all land under roads is Crown land, where the responsibility for
managing is vested in the local government.
AASB 1051.8
FMR r. 16(a)(i)
Effective as at 1 July 2008, council elected not to recognise any value for land under roads
acquired on or before 30 June 2008. This accords with the treatment available in
Australian Accounting Standard AASB 1051 Land Under Roads and the fact that Local
Government (Financial Management) Regulation 16 (a) (i) prohibits local governments from
recognising such land as an asset.
In respect of land under roads acquired on or after 1 July 2008, as detailed above,
Local Government (Financial Management) Regulation 16(a)(i) prohibits local
governments from recognising such land as an asset.
FMR r. 4(2)
Whilst such treatment is inconsistent with the requirements of AASB 1051, Local
Government (Financial Management) Regulation 4(2) provides, in the event of such an
inconsistency, the Local Government (Financial Management) Regulations prevail.
Consequently, any land under roads acquired on or after 1 July 2008 is not included as an
asset of the council.
Section 4 - Budget Process – Page 51
Note 1
Commentary – Summary of significant accounting policies
(Continued)
Refer to Accounting Manual Section 6.4 for commentary on Significant
Accounting Policies.
Note
The Depreciation of Non-Current Assets Schedule is a guide only and each
local government should adjust this schedule to their own circumstances.
Section 4 - Budget Process – Page 52
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
AASB 116.73(b,(c)
1.
(l)
SIGNIFICANT ACCOUNTING POLICIES (continued)
Depreciation of Non-Current Assets
All non-current assets having a limited useful life are separately and systematically
depreciated over their useful lives in a manner which reflects the consumption of the
future economic benefits embodies in economic benefits embodied in those assets.
Assets are depreciated from the date of acquisition or, in respect of internally constructed
assets, from the time the asset is completed and held ready for use.
Expenditure on items of equipment under $2,000 are not capitalised but are placed on an
Asset Inventory listing.
Buildings
Furniture and Equipment
Plant and Equipment
Sealed roads and streets
formation
pavement
seal
- bituminous seals
- asphalt surfaces
Gravel roads
formation
pavement
Formed roads (unsealed)
formation
pavement
Footpaths - slab
Sewerage piping
Water supply piping & drainage systems
AASB 136.59
50-80 years
4-10 years
5-15 years
not depreciated
50 years
20 years
25 years
not depreciated
50 years
not depreciated
50 years
20 years
100 years
75 years
The assets residual values and useful lives are reviewed and adjusted if appropriate,
at the end of each reporting period. An asset's carrying amount is written down
immediately to its recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These gains and losses are included in the statement of comprehensive income.
When revalued assets are sold, amounts included in the revaluation surplus relating to that
asset are transferred to retained earnings.
Section 4 - Budget Process – Page 53
Note 1
Commentary – Summary of significant accounting policies
(Continued)
Refer to Accounting Manual Section 6.4 for commentary on Significant
Accounting Policies.
Section 4 - Budget Process – Page 54
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE FINANCIAL REPORT
FOR THE PERIOD ENDED 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
AASB 116.73(a)
AASB 13.91
AASB 13.2,11,
61,67
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
(m)
Fair Value of Assets and Liabilities
When performing a revaluation, the council uses a mix of both independent and
management valuations using the following as a guide:
Fair Value is the price that Council would receive to sell the asset or would have to pay to
transfer a liability, in an orderly (i.e. unforced) transaction between independent,
knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing
information is used to determine fair value. Adjustments to market values may be made
having regard to the characteristics of the specific asset. The fair values of assets that are
not traded in an active market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the use of observable market
data.
AASB 13.16-21
To the extent possible, market information is extracted from either the principal market for
the asset (i.e. the market with the greatest volume and level of activity for the asset) or, in
the absence of such a market, the most advantageous market available to the entity at the
end of the reporting period (i.e. the market that maximises the receipts from the sale of the
asset after taking into account transaction costs and transport costs).
AASB 13.27-33
For non-financial assets, the fair value measurement also takes into account a market
participant’s ability to use the asset in its highest and best use or to sell it to another market
participant that would use the asset in its highest and best use.
AASB 13.91
Fair Value Hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy,
which categorises fair value measurement into one of three possible levels based on the
lowest level that an input that is significant to the measurement can be categorised into as
follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3
Measurements based on unobservable inputs for the asset or liability.
AASB 13.93(d)
The fair values of assets and liabilities that are not traded in an active market are
determined using one or more valuation technique. These valuation techniques maximise,
to the extent possible, the use of observable market data. If all significant inputs required to
measure fair value are observable, the asset or liability is included in Level 2. If one or
more significant inputs are not based on observable market data, the asset or liability is
included in Level 3.
Section 4 - Budget Process – Page 55
Note 1
Commentary – Summary of significant accounting policies(Continued)
Refer to Accounting Manual Section 6.4 for commentary on Significant
Accounting Policies.
Section 4 - Budget Process – Page 56
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
AASB 116.73(a)
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE FINANCIAL REPORT
FOR THE PERIOD ENDED 30 JUNE 201Z
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Fair Value of Assets and Liabilities (continued)
Valuation Techniques
The Council selects a valuation technique that is appropriate in the circumstances and
for which sufficient data is available to measure fair value. The availability of sufficient
and relevant data primarily depends on the specific characteristics of the asset or liability
being measured. The valuation techniques selected by the Council are consistent with
one or more of the following valuation approaches:
Market Approach: Valuation techniques that use prices and other relevant information
generated by market transactions for identical or similar assets or liabilities.
Income Approach: Valuation techniques that convert estimated future cash flows or
income and expenses into a single discounted present value.
Cost Approach: Valuation techniques that reflect the current replacement cost of an
asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and
sellers would use when pricing the asset or liability, including assumptions about risks.
When selecting a valuation technique, the Council gives priority to those techniques that
maximise the use of observable inputs and minimise the use of unobservable inputs.
Inputs that are developed using market data (such as publicly available information on
actual transactions) and reflect the assumptions that buyers and sellers would generally
use when pricing the asset or liability and considered observable, whereas inputs for
which market data is not available and therefore are developed using the best
information available about such assumptions are considered unobservable.
FMR r. 17A(4)(b)
As detailed above, the mandatory measurement framework imposed by the Local
Government (Financial Management) Regulations requires, as a minimum, all assets
carried at a valued amount to be re valued at least every 3 years by dates prescribed in
the FMR
AASB 7.21
AASB 139.14
AASB 139.38
AASB 7.B5 (c)
AASB 139.43
AASB 139.46
AASB 139.9
(n) Financial Instruments
Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when the council becomes a part
to the contractual provisions to the instrument. For financial assets, this is equivalent to
the date that the council commits itself to either the purchase or sale of the asset (i.e. trade date
accounting is adopted). Financial instruments are initially measured at fair value plus transaction
costs, except where the instrument is classified 'at fair value through profit or loss', in which case
transaction costs are expensed to profit or loss immediately.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at fair value, amortised cost using the
effective interest rate method or cost. Amortised cost is calculated as:
(a) the amount in which the financial asset or financial liability is measured at initial
recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the
amount initially recognised and the maturity amount calculated using the effective
interest rate method; and
(d) less any reduction for impairment
Section 4 - Budget Process – Page 57
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Section 4 - Budget Process – Page 58
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Financial Instruments (continued)
AASB 139.AG8
AASB 139.9
AASB 7.B5(a)
AASB 139.9
AASB 101.66, 69
AASB 139.9
AASB 101.66
AASB 139.9
AASB 7B5(b)
AASB 139.46,55
AASB 7B5(e)
AASB 101.66
The effective interest method used is to allocate interest income or interest expense
over the relevant period and is equivalent to the rate that exactly discounts estimated
future cash payments or receipts (including fees, transaction costs and other premiums
or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial
asset or financial liability. Revisions to expected future cash flows will necessitate an
adjustment to the carrying value with a consequential recognition of an income or
expense in profit or loss.
(i) Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss are financial assets held for trading.
A financial asset is classified in this category if acquired principally for the purpose of
selling in the short term. Derivatives are classified as held for trading unless they are
designated as hedges. Assets in this category are classified as current assets.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current assets,
except for those with maturities greater than 12 months after the balance sheet date
which are classified as non-current assets. Loans and receivables are included in trade
and other receivables in the Statement of Financial Position.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or
determinable payments and fixed maturities that the council’s management has the
positive intention and ability to hold to maturity. If council were to sell other than an
insignificant amount of held-to-maturity financial assets, the whole category would be
tainted and reclassified as financial available-for-sale. Held-to-maturity assets are
included in non-current assets, except for those maturities less than 12 months
from the balance date, which are classified as current assets.
(iv) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are
non-derivatives that are either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless management intends to
dispose of the investment within 12 months of the Statement of Financial Position date.
Investments are designated as available-for-sale if they do not have fixed maturities and
fixed or determinable payments and management intends to hold them for the medium to
long term.
They are subsequently measured at fair value with changes in such fair value (i.e. gains
or losses) recognised in other comprehensive income (except for impairment losses).
When the financial asset is derecognised, the cumulative gain or loss pertaining to that
asset previously recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale- financial assets are included in current assets where they are expected to
be sold within 12 months after the end of the reporting period. All other available-for-sale
financial assets are classified as non-current.
Section 4 - Budget Process – Page 59
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Section 4 - Budget Process – Page 60
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Financial Instruments (continued)
AASB 139.46,47,56
(v) Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently
measured at amortised cost.
AASB 139.58
AASB 139.55(b),67
AASB 7.B5(f)
Impairment
At the end of each reporting period, the council assesses whether there is objective
evidence that a financial instrument has been impaired. In the case of available-for-sale
financial instruments, a prolonged decline in the value of the instrument is considered to
determine whether impairment has arisen. Impairment losses are recognised in profit or loss in
the statement of comprehensive income.
In the case of financial assets carried at amortised cost, loss events may include: indications
that the debtors or a group of debtors are experiencing significant financial difficulty, default or
delinquency in interest or principal payments; indications that they will enter bankruptcy or
other financial reorganisation; and changes in arrears or economic conditions that correlate
with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate
allowance account is used to reduce the carrying amount of financial assets impaired by credit
losses. After having taken all possible measures of recovery, if management establishes that
the carrying amount cannot be recovered by any means, at that point the written-off amounts
are charged to the allowance account or the carrying amount of impaired financial assets is
reduced directly if no impairment amount was previously recognised in the allowance account.
AASB 139.17-20
AASB 139.39,41,42
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expire
or the asset is transferred to another party whereby the Council no longer has any significant
continual involvement in the risks and benefits associated with the asset.
Financial liabilities are derecognised where the related obligations are discharged, cancelled or
expired. The difference between the carrying amount of the financial liability extinguished or
transferred to another party and the fair value of the consideration paid, including the transfer
of non-cash assets or liabilities assumed, is recognised in profit or loss.
AASB 136.9 &12
(o) Impairment of Assets
In accordance with Australian Accounting Standards the Council's assets, other than
inventories, are tested annually for impairment. Where such an indication exists, an estimate
of the recoverable amount of the asset is made in accordance with AASB 136 Impairment of
Assets and appropriate adjustments made. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset's fair value less costs to sell and value in use. Impairment losses are
recognised in the Statement of Comprehensive Income. For non-cash generating assets of the
Council such as roads, drains, public buildings and the like, value in use is represented by the
asset's written down replacement cost of the asset.
Section 4 - Budget Process – Page 61
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Section 4 - Budget Process – Page 62
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 101.17(c)
(p)
Trade and Other Payables
Trade and other payables are carried at amortised cost. They represent liabilities for
goods and services provided to the Municipality prior to the end of the financial year
that are unpaid and arise when the Municipality becomes obliged to make future
payments in respect of the purchase of these goods and services. The amounts are
unsecured and are usually paid within 30 days of recognition.
AASB 119
(q)
Employee Benefits
The provisions for employee benefits relates to amounts expected to be paid for long
service leave, annual leave, wages and salaries and are calculated as follows:
AASB 119.9
AASB 119.11
AASB 101.70
(i) Wages, Salaries, Annual Leave and Long Service Leave (Short-term Benefits)
The provision for employees’ benefits to wages, salaries, annual leave and long service
leave expected to be settled within 12 months represents the amount the municipality
has a present obligation to pay resulting from employees services provided to balance
date. The provision has been calculated at nominal amounts based on remuneration
rates the council expects to pay and includes related on-costs.
AASB 119.8
AASB 119.155
AASB 119.156
(ii) Long Service Leave (Long-term Benefits)
The liability for long service leave is recognised in the provision for employee benefits
and measured as the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date using the projected unit
credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on national government bonds
with terms to maturity and currency that match as closely as possible, the estimated
future cash outflows. Where council does not have the unconditional right to defer
settlement beyond 12 months, the liability is recognised as a current liability.
AASB 123
AASB 123.8
AASB 123.Aus8.1
(r)
Borrowing Costs
Borrowing costs are recognised as an expense when incurred except where they are
directly attributable to the acquisition, construction or production of a qualifying asset.
Where this is the case, they are capitalised as part of the cost of the particular asset.
AASB 137.14
(s)
Provisions
Provisions are recognised when: The council has a present legal or constructive
obligation as a result of past events; it is more likely than not that an outflow of
resources will be required to settle the obligation; and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole.
A provision is recognised even if the likelihood of an outflow with respect to any one
item included in the same class of obligations may be small.
Section 4 - Budget Process – Page 63
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Section 4 - Budget Process – Page 64
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.10(e)
AASB 101.51
AASB 101.112
AASB 101.117
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 101.66
AASB 101.69
(t)
Current and Non-Current Classification
In the determination of whether an asset or liability is current or non-current, consideration is
given to the time when each asset or liability is expected to be settled. The asset or liability
is classified as current if it is expected to be settled within the next 12 months, being the
Council’s operation cycle.
In the case of liabilities where the Council does not have the unconditional right to defer
settlement beyond 12 months, such as vested long service leave, the liability is classified as
current even if not expected to be settled within the next 12 months. Inventories held for
trading are classified as current even if not expected to be realised in the next 12 months
except for land held for resale where it is held as non-current based on the Council’s
intentions to release for sale.
AASB 101.38
(u)
Comparative Figures
Where required, comparative figures have been adjusted to conform with changes in
presentation for the current financial year.
FMR r. 36(2)
AASB 101.17(b)
(v)
Budget Comparative Figures
Unless otherwise stated, the budget comparative figures shown in this budget document
relate to the original budget estimate for the relevant item of disclosure.
Section 4 - Budget Process – Page 65
Note 2
Commentary – Revenue and Expenses
Investment information
FMR r. 28
The notes to the annual budget are to include, in relation to money invested by
the local government, an estimate of —
(a) the amount to be earned from the investment of money held in reserve;
(b) the amount to be earned from the investment of other money; and
(c) the total earnings from investments.
Disclosure of Specific Revenues and Expenses
AASB 101(86)
When a revenue or an expense from ordinary activities is of such size, nature or
incidence that its disclosure is relevant in explaining the financial performance of
the local government, its nature and amount may be disclosed separately.
Extraordinary Items
AASB 101(87)
Disclosures of income or expense as extraordinary items are not allowed in the
Statement of Comprehensive Income or in the notes.
Depreciation and Amortisation
AASB 116(73)(e)
FMR r. 27(n)
The financial report shall disclose, for each class of property, plant and
Equipment a reconciliation of the carrying amount at the beginning and
end of the period showing depreciation and amortisation.
Auditors Remuneration
AASB 101
Aus 138(1)
Disclose the amount payable to auditor for an audit or a review of the financial
statements.
Finance Lease
AASB 117.31(c)
For financial leases, the amount of contingent rents recognised as an expense
in the period need to be disclosed.
Operating Lease
AASB 117.35(c)
Operating leases are to disclose the amount of lease and sublease payments
recognised as an expense in the period, with separate amounts for minimum
lease payments, contingent rents, and sublease payments
Investment information
FMR r. 49
The annual financial report is to include, in relation to money invested, details of:
(a) the amount earned from the investment of money held in reserve;
(b) the amount earned from the investment of other money; and
(c) the total earnings from investments.
Section 4 - Budget Process – Page 66
TOWN OF EAGLE BAY
AASB 101.10(e)
AASB 101.51
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
AASB 101.112
NOTE
FMR r.15(3)
2.
REVENUES AND EXPENSES
201Z
201Y
201Y
Budget
Actual
Budget
$
$
$
(a) Result from Ordinary Activities
(i) Charging as Expenses:
AASB 101.97
Significant Expense
The significant expense relates to the
0
(60,000)
0
15,000
14,800
15,000
0
0
0
5,000
4,830
5,000
3,542
6,432
0
0
391
0
217,000
216,547
215,000
2,500
2,541
2,500
550
550
550
2,800
2,781
2,700
reduction in the fair value of investments
Auditor's Remuneration
Audit
Interest on Overdraft
Other Services
Bad and Doubtful Debts
Rates
General Debtors
FMR r.27(n)
Depreciation
By Program
Governance
Law, Order, Public Safety
Health
Community Amenities
Recreation and Culture
Transport
Economic Services
8,500
8,486
8,000
6,170,200
5,878,904
6,072,850
3,450
3,427
3,400
795,000
794,171
795,000
7,200,000
6,907,407
7,100,000
Land and Buildings
577,998
366,771
433,860
Furniture and Equipment
130,343
77,146
109,951
Plant and Equipment
1,338,126
1,348,558
1,540,000
Roads
4,751,175
4,730,174
4,696,189
Footpaths
98,684
94,480
91,240
Drainage
70,130
68,033
28,760
233,544
222,245
200,000
7,200,000
6,907,407
7,100,000
Other Property and Services
15(b)
By Class
Other
Interest Expenses (Finance Costs)
- Finance Lease Charges
0
0
0
92,149
96,257
399,441
92,149
96,257
399,441
143,423
139,246
139,250
- Reserve Funds
225,000
247,379
200,000
- Other Funds
225,000
199,330
139,100
- Debentures
5(a)
Rental Charges
- Operating Leases
(ii) Crediting as Revenue:
FMR r.28
Interest Earnings
Investments
Other Interest Revenue
Section 4 - Budget Process – Page 67
12
50,000
52,255
46,000
500,000
498,964
385,100
This page has been intentionally left blank.
Section 4 - Budget Process – Page 68
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r.27(m)
FMR Schedule 1
Part 1
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
2.
(b)
REVENUES AND EXPENSES (Continued)
Statement of Objective
The Town of Eagle Bay is dedicated to providing high quality services to the community
through the various service orientated programs which it has established.
REPORTING PROGRAM DESCRIPTIONS
Council operations that are disclosed encompass the following service orientated activities/
programs:
GOVERNANCE
Objective: To provide a decision making process for the efficient allocation of resources.
Activities: Includes the activities of members of Council and the administrative support
available to the council for the provision of governance of the district. Other costs relate to
the task of assisting elected members and ratepayers on matters which do not concern
specific council services.
GENERAL PURPOSE FUNDING
Objective: To collect revenue to allow for the provision of services.
Activities: Rates, general purpose government grants and interest revenue.
LAW, ORDER, PUBLIC SAFETY
Objective: To provide services to help ensure a safer and environmentally conscious
community.
Activities: Supervision and enforcement of various local laws relating to fire prevention,
animal control and other aspects of public safety including emergency services.
HEALTH
Objective: To provide an operational framework for environmental and community health.
Activities: Inspection of food outlets and their control, provision of meat inspection services,
noise control and waste disposal compliance.
EDUCATION AND WELFARE
Objective: To provide services to disadvantaged persons, the elderly, children and youth.
Activities: Maintenance of child minding centre, playgroup centre, senior citizens centre
and aged care centre. Provision and maintenance of home & community care programs
and youth support services.
HOUSING
Objectives: To provide and maintain elderly residents housing.
Activities: Provision and maintenance of elderly residents housing.
COMMUNITY AMENITIES
Objective: To provide services required by the community.
Activities: Rubbish collection services, operation of rubbish disposal sites, litter control,
construction and maintenance of urban storm water drains, protection of the
environment and administration of town planning schemes, cemetery and public
conveniences.
Section 4 - Budget Process – Page 69
This page has been intentionally left blank.
Section 4 - Budget Process – Page 70
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r.27(m)
FMR Schedule 1
Part 1
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
2.
REVENUES AND EXPENSES (Continued)
(b)
Statement of Objective (continued)
RECREATION AND CULTURE
Objective: To establish and effectively manage infrastructure and resource which will help
the social well-being of the community.
Activities: Maintenance of public halls, civic centres, aquatic centre, beaches, recreation
centres and various sporting facilities. Provision and maintenance of parks, gardens and
playgrounds. Operation of library, museum and other cultural facilities.
TRANSPORT
Objective: To provide safe, effective and efficient transport services to the community.
Activities: Construction and maintenance of roads, streets, footpaths, depots, cycleway,
parking facilities and traffic control. Cleaning of streets and maintenance of street trees,
street lighting etc.
ECONOMIC SERVICES
Objective: To help promote the shire and its economic wellbeing.
Activities: Tourism and area promotion including the maintenance and operation of a
caravan park. Provision of rural services including weed control, vermin control and
standpipes. Building Control.
OTHER PROPERTY & SERVICES
Objective: To monitor and control Council's overheads operating accounts.
Activities: Private works operation, plant repair and operation costs and engineering operation costs.
(c)
Nature or Type Classifications
The Town of Eagle Bay is required by the Australian Accounting Standards to disclose revenue
and expenditure according to it's nature or type classification. The following nature or function
descriptions are also required by State Government regulations.
REVENUE
Rates
All rates levied under the Local Government Act 1995. Includes general, differential, specific
area rates, minimum rates, interim rates, back rates, ex-gratia rates, less discounts offered.
Excludes administration fees, interest on instalments, interest on arrears, service charges
and sewerage rates.
Operating Grants, Subsidies and Contributions
Refer to all amounts received as grants, subsidies and contributions that are not non-operating grants.
Non-Operating Grants, Subsidies and Contributions
Amounts received specifically for the acquisition, construction of new or the upgrading of
non-current assets paid to a local government, irrespective of whether these amounts are
received as capital grants, subsidies, contributions or donations.
Profit on Asset Disposal
Profit on the disposal of assets including gains on the disposal of long term investments.
Losses are disclosed under the expenditure classifications.
Section 4 - Budget Process – Page 71
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Section 4 - Budget Process – Page 72
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE FINANCIAL REPORT
FOR THE YEAR ENDING 30 JUNE 201Z
2.
REVENUES AND EXPENSES (Continued)
(c)
Nature or Type Classifications (continued)
Fees and Charges
Revenue (other than service charges) from the use of facilities and charges made for local
government services, sewerage rates, rentals, hire charges, fee for service, photocopying charges,
licences, sale of goods or information, fines, penalties and administration fees.
Service Charges
Service charges imposed under Division 6 of Part 6 of the Local Government Act 1995. Regulation 54
of the Local Government (Financial Management) Regulations identifies the charges which can be
raised. These are television and radio broadcasting, underground electricity and neighbourhood
surveillance services. Excludes rubbish removal charges.
Interest Earnings
Interest and other items of a similar nature received from bank and investment accounts, interest on
rate instalments, interest on rate arrears and interest on debtors.
Other Revenue
Other revenue, which cannot be classified under the above headings, includes dividends, discounts
and rebates. Reimbursements and recoveries should be separated by note to ensure the correct
calculation of ratios.
EXPENDITURE
Employee Costs
All costs associated with the employment of persons such as salaries, wages, allowances, benefits
such as vehicle and housing, superannuation, employment expenses, removal expenses, relocation
expenses, worker's compensation insurance, training costs, conferences safety expenses, medical
examinations, fringe benefits tax etc.
Material and Contracts
All expenditure on materials, supplies and contracts not classified under other headings. These
include supply of goods and materials, legal expenses, consultancy, maintenance agreements
communication expenses, advertising expenses, membership, periodicals, publications, hire
expenses, rental, leases, postage and freight etc.
Utilities (Gas, Electricity, Water, etc)
Expenditures made to respective agencies for the provision of power, gas or water.
Excludes expenditure for the re-instatement of road works on behalf of these agencies.
Depreciation on Non-Current Assets
Depreciation and amortisation expense raised on all classes of assets.
Loss on Asset Disposal
Loss on the disposal of fixed assets.
Interest Expenses
Interest and other costs of finance paid, including costs of finance for loan debentures,
overdraft accommodation and re-financing expenses.
Insurance
All insurance other than worker's compensation and health benefit insurance included as a cost of
employment.
Other Expenditure
Statutory fees, taxes, provision of bad debts. Donations and subsidies made to community groups.
Section 4 - Budget Process – Page 73
Note 3
Commentary – Acquisition of Assets
Recognition
Initial recognition - disclosure in accordance with AASB 116.73(a)
AASB 116
PPE should be recognised when it meets the recognition criteria of an asset.
PPE is measured initially at cost. Cost includes the fair value of the
consideration given to acquire the asset (net of discounts and rebates) and any
directly attributable cost of bringing the asset to working condition for its
intended use (inclusive of import duties and taxes).
Directly attributable costs are the cost of site preparation, delivery, installation
costs and relevant professional fees
Subsequent recognition - disclosure in accordance with AASB 116.73(a).
Classes of PPE should be carried at historical cost less accumulated
depreciation and any accumulated impairment losses, or at a revalued amount
less any accumulated depreciation and subsequent accumulated impairment
losses.
The depreciable amount of PPE (being the gross carrying value less the
estimated residual value) should be depreciated on a systematic basis over its
useful life.
The cost of a major inspection or overhaul of an item occurring at regular
intervals over the useful life of the item is capitalised only where the entity has
clearly identified as a separate component of the asset an amount representing
major inspection or overhaul and has already depreciated that component to
reflect the consumption of benefits that are to be subsequently replaced. The
carrying amount of the parts replaced should be appropriately derecognised. In
all other circumstances such costs are expensed as incurred.
Impairment - this policy refers only to non-current assets – see Commentary
Impairment of Assets
Determining “Classes” of Assets
AASB 116.37
A class of property, plant and equipment is a grouping of assets of a similar
nature and use in an entity’s operations. Subject to materiality, classes of
assets should be determined according to their nature. Where an asset is
comprised of a number of different components of rather different natures, the
grouping is still made on the basis of the nature of the asset as used by the
council.
LGA s. 6.2(4)(a)
The Acquisition of Assets Note dissects infrastructure assets into respective
classifications. However, it is recommended that all capital works and
purchases are disclosed in this note. It is also recommended that
supplementary information is included in the budget document giving details of
the plant replacement program, road replacement program and other
infrastructure.
Section 4 - Budget Process – Page 74
AASB 101.10(e)
AASB 101.51
AASB 101.112
LGA s. 6.2(4)(a)
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
3.
ACQUISITION OF ASSETS
By Program
Governance
Buildings
Furniture & Equipment
Plant & Equipment
Law, Order, Public Safety
Buildings
FESA Replacement Tender
Education and Welfare
Buildings
201Z
Budget
$
60,000
20,000
55,000
55,000
103,000
22,000
Community Amenities
Buildings
Loader for Landfill Site (second hand)
181,500
140,000
Recreation and Culture
Plant & Equipment
Infrastructure Assets - Parks, Ovals & Other
123,000
122,000
Transport
Land
Buildings
Plant & Equipment
Infrastructure Assets - Parks, Ovals & Other
Infrastructure Assets - Roads
500,000
10,000
926,000
1,235,000
6,865,895
Economic Services
Plant & Equipment
Other Property and Services
Land Held for Resale
Plant & Equipment
By Class
Land Held for Resale
Land
Buildings
Infrastructure Assets - Roads
Infrastructure Assets - Parks, Ovals & Other
Plant and Equipment
Furniture and Equipment
As per Rate Setting Statement
As per Cash Flow Statement
As per Rate Setting Statement
Section 4 - Budget Process – Page 75
72,000
3,851,373
80,000
14,421,768
3,851,373
500,000
328,500
6,865,895
1,357,000
1,499,000
20,000
14,421,768
(14,421,768)
(14,421,768)
Note 4
Commentary – Disposal of Assets
FMR r. 27(d)
The Disposal of Assets Note should include the net book value of that class of
assets, an estimate of the sale price of the class of assets and an estimate of
the profit or loss on the sale of that class of assets.
Section 4 - Budget Process – Page 76
TOWN OF EAGLE BAY
AASB 101.10(e)
AASB 101.51
NOTES TO AND FORMING PART OF THE BUDGET
AASB 101.112
FOR THE YEAR ENDING 30 JUNE 201Z
FM Reg 27(d)
4.
DISPOSALS OF ASSETS
The following assets are budgeted to be disposed of during the year.
By Program
Net Book
Sale
Value
Proceeds
Profit(Loss)
201Z
201Z
201Z
BUDGET
BUDGET
BUDGET
$
$
$
Governance
CEO Vehicle
48,500
50,000
1,500
Gardener Truck
25,000
20,000
(5,000)
Gardener Vehicle
21,000
19,000
(2,000)
Recreation & Culture
Transport
Aerodrome Hanger
252,705
360,000
107,295
Loader
50,000
50,000
0
Grader
44,000
40,000
(4,000)
23,000
22,000
(1,000)
Works Supervisor Vehicle
16,000
17,000
1,000
Engineering Vehicle
30,000
24,000
(6,000)
510,205
602,000
91,795
Building
Building Officer Vehicle
Other Property & Services
By Class
Land & Buildings
Net Book Value
Sale Proceeds
201Z
201Z
Profit(Loss)
201Z
BUDGET
BUDGET
BUDGET
$
$
$
252,705
360,000
107,295
0
0
0
Motor Vehicles
138,500
132,000
(6,500)
Plant & Machinery
119,000
110,000
(9,000)
510,205
602,000
91,795
Furniture & Equipment
201Z
Summary
BUDGET
$
Profit on Asset Disposals
109,795
Loss on Asset Disposals
(18,000)
91,795
Section 4 - Budget Process – Page 77
Note 5
Commentary – Information on Borrowings
DLGC
Long term borrowings are split into current and non-current portion.
If a council expects to refinance or roll over a loan for at least 12 months it
classifies the loan as non-current. When refinancing or rolling over the loan is
not at the discretion of the council and the potential to refinance is not
considered then loan is classified as current.
This disclosure has more detail that is required but it provides useful information
which is consistent with Annual Financial Report.
Self-Supporting Loans should be stated giving details of how the loan is funded.
FMR r. 29(f)
The Regulation requires detail on how the repayments are to be financed. In
this example this detail is shown in the report but it could be show by way of a
note.
FMR r. 30(1)(d)
Previous year budget and annual details are required to be shown.
Section 4 - Budget Process – Page 78
AASB
101.10(e)
AASB 101.51
AASB 101.112
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
5.
(a)
INFORMATION ON BORROWINGS
Debenture Repayments
Interest
Rate
FM Reg 29(f)
FM Reg
30(1)(d)
Maturity
Date
Principal
1 Jul 201Y
New
Loans
%
Particulars
Self-Supporting Loans
Loan 112 - Surf Club
Loan 113 - Speed Way
Loan 114 - Yacht Club
Loan 229 - Soccer Club
7.52
6.65
8.95
5.45
09/18
07/22
10/09
05/24
Total SS Loans
239,771
110,321
29,462
500,000
879,554
Education & Welfare
Age Care Facility
6.51
02/17
386,377
Transport
Loan 120 - Loader
6.5
09/15
0
6.45
04/17
375,896
Other Property & Services
Loan 228 - Lester
Sub-Division
Total Council Loans
TOTAL ALL LOANS
All debenture repayments are to be financed by general purpose revenue.
Section 4 - Budget Process – Page 79
0
320,000
Principal
Repayments
Principal
Outstanding
201Z
Budget
$
201Y
Actual
$
201Z
Budget
$
9,125
8,126
8,148
25,000
50,399
8,825
7,926
7,642
0
24,393
230,646
102,195
21,314
475,000
829,155
30,100
22,100
0
Interest
Repayments
201Y
Actual
$
201Z
Budget
$
201Y
Actual
$
239,771
110,321
29,462
500,000
879,554
15,887
4,704
2,025
27,000
49,616
16,187
4,904
2,531
0
23,622
356,277
386,377
35,280
37,282
0
320,000
0
0
0
28,113
24,104
347,783
375,896
22,300
35,353
762,273
320,000
58,213
46,204
1,024,060
762,273
57,580
72,635
1,641,827
320,000
108,612
70,597
1,853,215
1,641,827
107,196
96,257
Note 5
Commentary – Information on Borrowings (continued)
FMR r. 29
LGA s. 6.2(4)(d)
& (g)
The following are the various details requiring disclosure where certain
conditions exist.
Unspent Loans
When an unspent loan balance is carried forward the following requirements are
to be included as per FMR r. 29(a):
(a) an estimate of the amount brought forward on 1 July;
(b) the purpose for which the money was borrowed;
(c) an estimate of the amount to be used during the financial year;
(d) an estimate of the amount which will remain unused at 30 June.
Overdraft
Where an overdraft exists, details required as per FMR r.29(b) are as follows:
(a) an estimate of the amount brought forward on 1 July;
(b) the purpose for which the overdraft was established;
(c) the year in which the overdraft was first established;
(d) an estimate of the amount by which the overdraft will be increased or
decreased during the financial year;
(e) an estimate of the balance at 30 June.
Change of Purpose
Where it is proposed to change the purpose of existing borrowings the
requirements of FMR r. 29(c) are as follows:
(a) the purpose for which the money was borrowed;
(b) the purpose for which the money is to be applied;
(c) the reasons for the application of the money to that purpose;
(d) an estimate of the amount to be applied.
Re-financing of Existing Borrowings
Where it is proposed to re-finance existing borrowings the requirements of FMR
r. 29(e) are as follows:
(a) an estimate of the amount to be re-financed;
(b) where the principal sum under the new loan will be different from the
principal sum under the existing loan, detail of the amount of the difference
and the reasons for the re-financing are to be given;
(c) a brief summary of the changes to the original terms of the borrowing it is
expected will result from the re-financing.
Section 4 - Budget Process – Page 80
AASB
101.10(e)
AASB 101.51
AASB 101.112
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
5.
LGA S
6.2(4)(d)
FM Reg 29(d)
(b)
INFORMATION ON BORROWINGS (Continued)
New Debentures
Particulars/Purpose
Transport
Loan 120 - Loader
Estimated
Amount
To Be
Borrowed
320,000
Institution
Loan
Type
Term
(Years)
WATC
Debenture
5
Total
Interest &
Charges
104,000
Interest
Rate
%
6.5
FM Reg 29(a)
(c)
Unspent Debentures
Council had $30,000 in unspent debenture funds as at 30 June 201Y but it is not expected to have unspent debenture funds as at 30 June 201Z
FM Reg 29(b)
(d)
Overdraft
Council has not utilised an overdraft facility during the financial year although an overdraft facility of $400,000 with the Bank of Western Australia
does exist. It is not anticipated that this facility will be required to be utilised during 201Z.
Amount
Used
Budget
320,000
Balance
Unspent
$
0
S4 – Page 81
Note 6
Commentary – Reserves
DLGC
Not all the detail in this disclosure is required but is suggested to enhance the
Rate Setting Statement and to be consistent with the Annual Financial Report.
FMR r. 27(g)
In relation to each reserve account the report must include the following:
(i) the opening balance brought forward on 1 July;
(ii) the amount to be set aside during the financial year;
(iii) the amount to be used during the financial year;
(iv) the closing balance at 30 June.
If all or part of a reserve account is to be used or set aside for a purpose other
than for which it was establish then FMR r.27(h) requires the following
disclosure:
(i) the proposed purpose;
(ii) an estimate of the amount to be used or set aside;
(iii) the reasons for the change of use or purpose.
The note regarding reserve accounts needs to be tailored to the local
government circumstances. However, additional information regarding the exact
purpose of each transfer provides an easy access throughout the financial year
of what the intent was at the budget adoption. This is particularly useful when
there is a change in staff.
The note regarding asset revaluation should be worded to suit the policy of the
local government.
Section 4 - Budget Process – Page 82
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r. 15(3)
LGA s. 6(4)(e)
FMR r. 27(g)
FMR r. 30(1)(d)
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
6.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
201Z
Budget
$
201Y
Actual
$
201Y
Budget
$
1,163,026
1,764,199
(1,066,000)
1,861,225
584,375
781,352
(202,701)
1,163,026
584,375
209,110
(299,490)
493,995
775,544
550,000
(422,000)
903,544
806,956
632,244
(663,656)
775,544
806,956
318,012
(285,545)
839,423
977,669
500,000
(121,653)
1,356,016
824,785
948,367
(795,483)
977,669
824,785
477,019
(1,178,616)
123,188
623,039
600,000
(221,500)
1,001,539
406,750
218,906
(2,617)
623,039
406,750
91,318
(42,000)
456,068
178,880
372,821
(422,000)
129,701
250,000
624,110
(695,230)
178,880
250,000
215,000
(405,210)
59,790
644,160
79,200
(486,692)
236,668
657,330
171,082
(184,252)
644,160
657,330
168,125
(236,993)
588,462
0
1,000
0
1,000
0
0
0
0
0
0
0
0
5,489,693
4,362,318
2,560,926
RESERVES
Land Purchase & Development Reserve
Opening Balance
Amount Set Aside / Transfer to Reserve
Amount Used / Transfer from Reserve
Plant Reserve
Opening Balance
Amount Set Aside / Transfer to Reserve
Amount Used / Transfer from Reserve
Building Reserve
Opening Balance
Amount Set Aside / Transfer to Reserve
Amount Used / Transfer from Reserve
Sanitation (Rubbish Removal) Reserve
Opening Balance
Amount Set Aside / Transfer to Reserve
Amount Used / Transfer from Reserve
Aerodrome Reserve
Opening Balance
Amount Set Aside / Transfer to Reserve
Amount Used / Transfer from Reserve
Employee Entitlements Reserve
Opening Balance
Amount Set Aside / Transfer to Reserve
Amount Used / Transfer from Reserve
Workers Compensation Premium Reserve
Opening Balance
Amount Set Aside / Transfer to Reserve
Amount Used / Transfer from Reserve
Total Reserves
All of the above reserve accounts are to be supported by money held in financial institutions
Council have a policy of annual revaluation of road infrastructure. The amount of any revaluation
adjustment at 30 June 201Z is not known. Any transfer to or from an asset revaluation reserve
be a non-cash transaction and as such has no impact on this budget document.
Section 4 - Budget Process – Page 83
This page has been intentionally left blank.
Section 4 - Budget Process – Page 84
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r. 15(3)
LGA s. 6(4)(e)
FMR r. 27(g)
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
6.
201Z
Budget
$
201Y
Actual
$
201Y
Budget
$
1,764,199
550,000
500,000
600,000
372,821
79,200
1,000
3,867,220
781,352
632,244
948,367
218,906
624,110
171,082
0
3,376,061
209,110
318,012
477,019
91,318
215,000
168,125
0
1,478,584
(1,066,000)
(422,000)
(121,653)
(221,500)
(422,000)
(486,692)
0
(2,739,845)
(202,701)
(663,656)
(795,483)
(2,617)
(695,230)
(184,252)
0
(2,543,939)
(299,490)
(285,545)
(1,178,616)
(42,000)
(405,210)
(236,993)
0
(2,447,854)
1,127,375
832,122
(969,270)
RESERVES (Continued)
Summary of Reserve Transfers
Transfers to Reserves
Land Purchase & Development Reserve
Plant Reserve
Building Reserve
Sanitation (Rubbish Removal) Reserve
Aerodrome Reserve
Employee Entitlements Reserve
Workers Compensation Premium Reserve
Transfers from Reserves
Land Purchase & Development Reserve
Plant Reserve
Building Reserve
Sanitation (Rubbish Removal) Reserve
Aerodrome Reserve
Employee Entitlements Reserve
Workers Compensation Premium Reserve
Total Transfer to/(from) Reserves
In accordance with council resolutions in relation to each reserve account, the purpose for which
the reserves are set aside are as follows:
Land Purchased & Development Reserve
- established to fund land improvements and sub-division development.
Plant Reserve
- to be used for the purchase of major plant.
Building Reserve
- to be used for the construction of a new administration centre.
Sanitation (Rubbish Removal) Services Reserve
- established to fund the purchase of major sanitation equipment and for the future development
of waste disposal facilities. Funded from the annual surplus derived from property rubbish
disposal/collection fees after expenses.
Aerodrome Reserve
- to maintain a safe landing airstrip and functional airport amenities.
Employee Entitlement Reserve
- to be used to fund annual and long service leave requirements.
Workers Compensation Premium Reserve
- established to hold any workers' compensation insurance premium savings that may be made
each year and to fund any additional premium demand made by council's insurers from time to time.
Section 4 - Budget Process – Page 85
Note 7
Commentary – Net Current Assets
FMR r. 31
Net current assets to be shown at the start of the financial year are as follows:
(1) The annual budget is to include the net current assets carried forward from
the previous financial year.
(2) If at the time of preparation of the annual budget the net current assets is
not known, an estimate of that figure may, if it is disclosed as an estimate,
be included in the annual budget.
(3) The annual budget is to include or be accompanied by notes containing –
(a) a summary explaining the composition of the net current assets;
(b) if the net current assets differs from the figure used in the rate setting
statement, a disclosure of the difference and a brief explanation of the
reason for the difference.
FMR r. 32
Amounts which may be excluded in calculation of budget deficiency are as
follows:
(a) money borrowed or to be borrowed, to the extent that it is proposed in the
annual budget to remain unspent at the end of the financial year;
(b) reserves, to the extent that they are proposed in the annual budget to
remain unspent at the end of the financial year;
(c) in relation to a land transaction or trading undertaking, assets and liabilities,
to the extent to which they are proposed in the annual budget to remain
restricted to the purposes of the land transaction or trading undertaking at
the end of the financial year;
(d) any proposed amounts of depreciation of non-current assets;
(e) assets from grants or gifts or non-cash revenue or expenditure;
(f) current liabilities which, by their nature, are restricted, to the extent that they
are proposed in the annual budget to remain uncleared at the end of the
financial year;
(g) any other current assets which, by their nature, are restricted, to the extent
that they are proposed in the annual budget to remain unused at the end of
the financial year.
Local Government Operational Guidelines
DLGC
Guideline Number 08 sets out the procedure for determining the opening funds
for the annual budget. This is a useful tool to be used in the preparation of the
annual budget.
It is also suggested that a Budget Statement of Financial Position is prepared
although this is not required by regulation.
In this model, loan repayments are added back as they represent a current
liability to be paid over the next 12 months, already reflected as expenditure in
the budget.
Leave reserve is also added back to the extent of the amount cash backed as
this is deducted as a liability and also as restricted cash.
Note – only deduct the lesser amount. If the provision amount is more
than the cash backed amount then only the cash backed amount can be
deducted. If the cash backed amount is more than the provision amount
then only the provision amount can be deducted.
Section 4 - Budget Process – Page 86
AASB 101.10(e)
AASB 101.51
AASB 101.112
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
NOTE
201Z
Budget
$
15(a)
15(a)
450,639
5,489,693
0
FMR r. 15(3)
FMR r. 31
7.
201Y
Est. Actual
$
NET CURRENT ASSETS
Composition of Estimated Net Current Asset Position
CURRENT ASSETS
Cash - Unrestricted
Cash - Restricted Reserves
Cash - Restricted Unspent Grants
Cash - Restricted Unspent Grants to future year
Cash - Restricted Unspent Loans
Investments
Trade and Other Receivables
Inventories - Fuel and Materials
Inventories - Land Held for Resale
487,621
7,345,445
422,895
4,362,318
1,496,637
70,000
30,000
190,000
503,587
256,313
424,393
7,756,143
(2,201,032)
(2,033,690)
5,144,413
5,722,453
(5,489,693)
0
0
108,612
236,668
(4,362,318)
(70,000)
(424,393)
83,612
644,160
0
1,593,514
0
0
917,492
LESS: CURRENT LIABILITIES
Payables and Provisions
NET CURRENT ASSET POSITION
FMR r. 32(b)
FMR r. 32(g)
Less: Cash - Restricted Reserves
Less: Cash - Restricted future year Grants
Less: Land Held for Resale
Add Back: Current Loan Liability
Add Back: Cash Backed Employee Provision
6,15(a)
5
5
6
ESTIMATED SURPLUS/(DEFICIENCY) C/FWD
The estimated surplus/(deficiency) c/fwd in the 201Y actual column represents
the surplus/(deficit) brought forward as at 1 July 201Y.
The estimated surplus/(deficiency) c/fwd in the 201Z budget column represents
the surplus/(deficit) carried forward as at 30 June 201Z.
It is recommended that only the cash backed reserve amount of employee
provisions be added back in this calculation. However, if the annual leave is fully
budgeted for under salaries and wages then it is appropriate to add back the
annual leave provision amount.
Section 4 - Budget Process – Page 87
Note 8
Commentary – Rating Information
LGA s. 6.2(4)(b)
& (g)
FMR r. 23
Disclosure in regard to rating information is specified under FMR r.23 of the
Financial Management Regulations.
The annual budget is to include:
(a) in relation to general rates –
(i)
the reasons for any differential rates imposed under section 6.33 and
any differential minimum payments imposed under section 6.35(6)(c);
(iii) for each general rate —
(I)
(II)
the rate in the dollar;
whether the basis for the rate was the gross rental value or the
unimproved value of land;
(III) an estimate of the number of properties to which the rate will
apply;
(IV) an estimate of the total rateable values of the properties referred
to in Item (III);
(V) the amount it is estimated will be imposed by way of —
(A) the rate;
(B) interim rates; and
(c) back rates;
(b) if a differential general rate or minimum payment differs from the proposed
rate or payment set forth in the local public notice given under section 6.36 –
(i)
(ii)
details of the rate or payment set forth in the public notice; and
reasons for the difference;
(c) in relation to each minimum payment —
(ii)
(v)
the amount of the minimum payment;
an estimate of the total rateable values of the properties to which the
minimum payment is to apply;
(vi) an estimate of the total number of properties to which the minimum
payment is to apply; and
(vii) the amount it is estimated will be imposed by way of each
(I) minimum payment;
(II) interim minimum payment; and
(III) back minimum payment.
Attention:
Do you have differential general rates?
If yes, and the differential general rates or minimum payments differ from
those advertised in the local public notice, then you need to make
disclosures in accordance with FMR r.23(b) which set out:
(a) Details of the rate or payment set forth in the public notice;
(b) Reasons for the difference.
Section 4 - Budget Process – Page 88
AASB 101.10(e)
AASB 101.51
AASB 101.112
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
8.
LGA s. 6.2(4)(b)
FMR r.23 (a)-(c)
(a)
RATING INFORMATION - 201Z FINANCIAL YEAR
Rate in
Number
RATE TYPE
$
of
Properties
Differential General Rate
GRV - Residential
8.3900
3207
GRV - Comm/Industrial
8.3900
390
GRV - Truck/Bus Depot
9.0450
140
UV - Rural
1.2403
1231
UV - Mining
1.2403
50
UV - Commercial Industrial
1.2403
5
Sub-Totals
5023
Minimum Rates
Minimum
GRV - Residential
521
1570
GRV - Comm/Industrial
521
91
GRV - Truck/Bus Depot
521
60
UV - Rural
260
15
UV - Mining
260
12
UV - Commercial/Industrial
260
2
Sub-Totals
1750
6773
Ex Gratia Rates
Discounts (Note 12)
Rateable
Value
$
Rate
Revenue
$
27,943,588
14,003,417
850,492
351,422,400
1,496,250
486,160
396,202,307
2,344,467
1,174,887
76,927
4,358,692
18,557
6,030
7,979,560
7,894,525
420,977
603,132
37,821
95,099
8,755
9,060,309
817,970
47,411
31,260
3,900
3,120
520
904,181
8,883,741
Interim
Rates
$
Total Rates by Nature or Type
Total
Revenue
$
8,636
8,636
0
8,636
Total Amount Required to be Raised from Rates
Specified Area Rates (Note 9)
Excess Rates or Rates in
Advance
Totals
Back
Rates
$
0
0
201Y
Actual
$
2,344,467
1,174,887
76,927
4,367,328
18,557
6,030
7,988,196
2,512,438
1,234,027
76,251
4,115,380
6,470
6,138
7,950,704
817,970
47,411
31,260
3,900
3,120
520
904,181
8,892,377
7,010
0
8,899,387
15,230
928,760
44,128
31,066
6,835
23,506
530
1,034,825
8,985,529
6,950
(289,330)
8,703,149
49,261
0
8,914,617
595
8,753,005
All land except exempt land in the Town of Eagle Bay is rated according to its Gross Rental Value (GRV) in town sites or Unimproved Value (UV) in the
remainder of the Shire.
The general rates detailed above for the 201Z financial year have been determined by Council on the basis of raising the revenue required to meet the
deficiency between the total estimated expenditure proposed in the budget and the estimated revenue to be received from all sources other than rates.
Section 4 - Budget Process – Page 89
Note 9
FMR r. 23 (d)
Commentary – Specified Area Rate
FMR r. 23(d) requires local governments to show how the proceeds of the rate
are to be applied. The model example shows a specified area rate for a
Sewerage Scheme.
(d) for each specified area rate —
(i) the purpose of the rate;
(ii) the rate in the dollar;
(iii) a brief description identifying the area within which the rate is to be
imposed;
(iv) whether the basis for the rate is the gross rental value or the
unimproved value of land;
(v) an estimate of the total rateable values of the properties rated on gross
rental value or rated on unimproved value, as the case requires;
(vi) the amount it is estimated will be imposed by way of —
(I) the rate;
(II) interim rates; and
(III) back rates;
(vii) how the proceeds of the rate are to be applied including an estimate of
—
(I) the amount applied;
(II) the amount to be set aside in a reserve account;
(III) the amount to be applied from the reserve account.
Note 10
FMR r. 24
Commentary – Service Charges
FMR r. 24 requires local governments to show details of each service charge
and must include the following. The model example shows a service charge for
property surveillance and security.
(a)
(b)
(c)
(d)
(e)
details of the nature of the service for which the service charge is imposed;
the reasons for the service charge;
the amount of the service charge;
an estimate of the total amount to be imposed by way of the service charge;
if the service charge is to be imposed on land in a defined part of the district,
a brief description identifying the area within which the service charge is to
be imposed;
(f) details of how the proceeds of the service charge are to be applied,
including an estimate of —
(i) amount to be applied;
(ii) the amount to be set aside in a reserve account; and
(iii) the amount to be applied from the reserve account.
FMR r. 54
Defined service charges are:
(i)
(ii)
(iii)
(iv)
FMR r. 27(a)
television and radio re-broadcasting;
underground power;
property surveillance and security; and
water.
Refer to FMR r. 27(a) if interest is to be charged.
Section 4 - Budget Process – Page 90
AASB 101.10(e)
AASB 101.51
AASB 101.112
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
8.
(b)
RATING INFORMATION - Current FINANCIAL YEAR (continued)
Differential Rates
The Town of Eagle Bay has applied a uniform general rate to land rated on the basis of
Unimproved Values (UV).
Differential general rates have been imposed on Gross Rental Value (GRV) rated land where
a higher rate of Industrial land has been imposed on 133 properties to reflect the
impact that larger vehicles using these sites have on the road infrastructure in the
Town's industrial park.
The differential general rate is approximately 8% higher than the rate that
applies to all other GRV rated land. The object of the rate is to raise additional revenue to
meet the higher costs of road maintenance works required.
(c)
FMR r. 23(d)
9.
Minimum Payments
A minimum payment of $260 is applied uniformly to all UV land and a minimum payment of
$521 is applied to all other GRV rated land. This is in recognition that every property receives
some minimum level of benefit from services and needs to make a reasonable contribution to
those services.
SPECIFIED AREA RATE - 201Y/201Z FINANCIAL YEAR
Eagle Bay Water Scheme
UV Rural
Rate in
$
Basis
of
Rate
0.0050
3,579,000
201Z
Budgeted
Revenue
$
Budget
Applied
to Costs
$
201Y
Actual
$
15,230
15,230
15,230
15,230
49,261
49,261
The specified are rate for the Eagle Bay Water Scheme is for those properties in the Eagle bay
locality which are connected to the scheme and is levied on the gross rental value of
affected properties.
The proceeds of the rate are applied in full to the maintenance of the scheme which includes
loan repayments.
As such, no transfer to or from reserve accounts will occur.
FMR r. 24
10.
SERVICE CHARGES - 201Y/201Z FINANCIAL YEAR
Amount
of
Charge
$
FMR r. 27(a)
No interest will be charged on overdue service charges.
Section 4 - Budget Process – Page 91
201Z
Budgeted
Revenue
$
Budget
Applied
to Costs
$
201Y
Actual
$
0
0
0
Note 11
Commentary – Discount, Incentive, Concession, Waiver and Writeoff Information
FMR r. 26
(1) The annual budget is to include for each discount or other incentive or waiver
or concession for early payment of any money proposed in relation to any
money —
(a)
in respect of a discount —
(i)
(ii)
(c)
the amount or the percentage of the discount to be allowed;
the circumstances in which the discount will be granted.
in relation to a waiver or concession —
(i)
(ii)
(iii)
(iv)
a brief description of the waiver or concession;
a statement of the circumstances in which it will be granted;
details of the persons or class of persons to whom it is available;
the objects of and reasons for the waiver or concession.
(2) The annual budget is to separately include an estimate of the following to all
general rates, specified area rates, service charges and fees and charges
imposed under the Act or any other written law —
(a)
(b)
(c)
(d)
the total amount of the discounts which may be granted;
the total cost of each incentive scheme;
the total cost or reduction of revenue of a waiver or concession;
the total amount of money to be written off.
This disclosure could be presented by way of a table or by way of explanation.
Note 12
Commentary – Interest Charges & Instalments
FMR r. 27 (a),
Under ‘Budget notes’, FMR r.27 requires the annual budget to include notes
detailing –
(b), & (c)
LGA s. 6.13
(a) & (b) for the late payment of a rate or service charge:
(i)
(ii)
LGA s. 6.45
the rate of interest;
an estimate of the total amount of revenue from the imposition of the
interest.
(c) for the instalment options of the Local Government Act s6.45:
(i)
(ii)
(iii)
(iv)
due dates for each instalment under each option;
rate of interest;
the additional charge;
an estimate of the total amount of revenue from the imposition of the
interest and additional charge.
Note that the amounts shown in the Model are for guidance only.
Section 4 - Budget Process – Page 92
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r. 26
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
11.
RATE PAYMENT DISCOUNTS, WAIVERS & CONCESSIONS
- 201Y/201Z FINANCIAL YEAR
No discount is being offered to ratepayers for early payment of rates. However, a holiday
package donated by the Eagle Bay Motel will be drawn from those ratepayers who have
paid their rates in full by the due date.
A waiver of rates in relation to commercial leases entered into with tenants of the Museum
The Council offers those resident who hold a current valid seniors concession card, a
concession in respect of the following services:
(I) Rubbish Collection Services, 50% of the normal fee applicable
(II) Dog registration fees, 50% of the normal fee applicable
(III) User charges at the Bay of Eagle Leisure Centre, 30% of admission fees.
FMR r. 27
(a)(b)(c)
12.
INTEREST CHARGES AND INSTALMENTS
- 201Y/201Z FINANCIAL YEAR
An interest rate of 11% will be charged on all rate payments which are late. It is
estimated this will generate income of $25,000. Three separate option plans will be
available to ratepayers for payment of their rates.
Option 1 (Full Payment)
Full amount of rates and charges including arrears, to be paid on or before 24 September
201Y or 35 days after the date of service appearing on the rate notice whichever is the
later. See Note 12 for discount provisions under this option.
Option 2 (Two Instalments)
First instalment to be received on or before 24 September 201Y or 35 days after the date
of service appearing on the rate notice whichever is later and including all arrears and
half the current rates and service charges. Second instalment to be made on or before
28 January 201Z.
Option 3 (Four Instalments)
First instalment to be received on or before 24 September 201Y or 35 days after the date of
service appearing on the rate notice whichever is later and including all arrears and one
quarter of the current rates and service charges. Second instalment to be made on or
before 26 November 201Y, third instalment to be made on or before 28 January 201Z
and the fourth instalment to be made on or before 28 March 201Z.
The cost of the instalment plans will comprise of simple interest of 5.5% p.a. calculated
from the date the first instalment is due, together with an administration fee of $10 for
each instalment notice (ie $10 for Option 2 and $30 for Option 3)
The total revenue from the interest and administration charge is estimated as follows:
FMR r. 15(3)
Interest on Unpaid Rates
Interest on Instalments Plan
Charges on Instalment Plan
Section 4 - Budget Process – Page 93
Interest
Rate
%
11.00
5.50
0
Admin.
Charge
$
0
0
10
Budgeted
Revenue
$
25,000
25,000
25,000
75,000
Actual
Revenue
$
25,683
26,572
9,800
62,055
Note 13
Commentary – Fees and Charges
FMR r. 25
Local Governments are to disclose information of fees and charges imposed in
relation to each program. The total fees and charges should agree back to the
total fees and charges disclosed in the Statement of Comprehensive Income by
Nature or Type.
FMR Schedule 1
Part 1
Note that Sewerage, Waste Service (as defined in the Waste Avoidance and
Resource Recovery Act 2007) and Rubbish Collection Charges are part of this
disclosure and are also included under the Community Amenities program.
Note 14
Commentary – Elected Members’ Remuneration
FMR r. 27 (l)
The provisions regarding disclosure of fees paid to elected members contained in
FMR r.27 are:
(i)
(ii)
the nature of the fee, expense or allowance; and
an estimate of the total amount or value of each class of fee, expense or
allowance.
Admin Regs 30-34
Prescribed amounts are contained in the Local Government (Administration)
Regulations 30 to 34.
DLGC
General guidance regarding meeting fees, allowances and expenses are provided
in Local Government Operational Guideline Number 15.
Note that the amounts shown in the Model are for guidance only.
Section 4 - Budget Process – Page 94
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r. 25
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
13.
FEES & CHARGES REVENUE
201Z
Budget
$
FMR r. 15(3)
FMR Schedule 1
Part 1
FMR r. 27 (l)
FMR r. 15(3)
Admin Reg 3034
Governance
General Purpose Funding
Law, Order, Public Safety
Health
Education and Welfare
Housing
Community Amenities
Recreation & Culture
Transport
Economic Services
Other Property & Services
14.
14,900
800
230,500
150,000
382,000
600
1,586,150
1,190,000
750,000
494,300
300,500
5,099,750
201Y
Actual
$
14,115
784
229,958
98,247
278,472
520
1,424,141
921,370
811,692
445,437
774,981
4,999,717
ELECTED MEMBERS REMUNERATION
The following fees, expenses and allowances were paid to council members and/or the
mayor:
201Z
201Y
Budget
Actual
$
$
Meeting Fees
Mayor's Allowance
Deputy Mayor's Allowance
Travelling Expenses
Telecommunications & IT Allowance
Section 4 - Budget Process – Page 95
49,000
14,000
3,500
10,500
21,000
98,000
49,000
14,000
3,500
9,450
18,575
94,525
Note 15
Commentary – Notes to Statement of Cash Flows
AASB 107
The cash flow statement presents the generation and use of cash by category
(operating, investing and finance) over a specific period of time. It provides the
users with a basis to assess the entity’s ability to generate and utilise its cash.
Investing activities are the acquisition and disposal of non-current assets and
investments that are not cash equivalents. Financing activities are changes in
the equity and borrowings. Operating activities are the entity’s revenueproducing activities.
Entities may present their operating cash flows by using either the direct (gross
cash receipts/payments by function) or the indirect method (adjusting net profit
or loss for non-operating and non-cash transactions; and for changes in working
capital).
Non Cash Transactions
AASB 107.43
Information about transactions and other events which do not result in cash flow
during the reporting period but affect assets and liabilities that have been
recognised are required to be disclosed where the transaction involved external
parties and relate to the financing, investing and other non-operating activities of
an entity.
Examples of non-cash financing and investing activities include:
 Assets acquired but not paid for at year-end;
 An exchange of non-cash assets or liabilities;
 Assets acquired for debt, obtaining an asset by finance lease.
These non-cash activities would usually be disclosed as an additional note to
the Notes to the Cash Flow Statement.
Reconciliation of Cash
AASB 107.45
AASB 107 requires disclosure of the components of cash and cash equivalents
and presents a reconciliation of the amounts in its cash flow statement with the
equivalent items reported in the balance sheet.
Reconciliation of Net Cash by Operating Activities
AASB 107 Aus.20(1)
When an entity uses the direct method, a reconciliation of cash flows arising
from operating activities to profit or loss needs to be disclosed in the financial
report.
There are a number of different formats that may be used for the reconciliation
according to professional preference. Some formats are illustrated in AASB 107
Appendix A5.
Additional Disclosure
AASB 107.50
Additional information may be relevant to users in understanding the financial
position and liquidity of an entity. Disclosure of this information, together with a
commentary by management, is encouraged and may include the amount of
undrawn borrowing facilities that may be available for future operating activities
and to settle capital commitments, indicating any restrictions on the use of these
facilities.
Section 4 - Budget Process – Page 96
AASB
101.10(e)
AASB 101.51
AASB 101.112
AASB 107.45
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
15.
(a)
NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of Cash
For the purposes of the cash flow statement, cash includes cash and cash
equivalents net of outstanding bank overdrafts.
Estimated cash at the end of the reporting period is as follows:
201Z
201Y
201Y
Est.
Budget
Actual
Budget
$
$
$
Cash - Unrestricted Muni
450,639
422,895
1,444,000
Cash - Restricted Unspent Grants
0
1,566,637
2,000,779
Cash - Restricted Reserves
5,489,693
4,362,318
2,560,925
Cash - Restricted Unspent Loans
0
30,000
0
5,940,332
6,381,850
6,005,704
The following restrictions have been imposed by regulation or other externally imposed requirements
FMR r. 15(3)
Land Purchase & Development Reserve
Plant Reserve
Building Reserve
Sanitation (Rubbish Removal) Reserve
Aerodrome Reserve
Employee Entitlements - Annual Reserve
Workers Compensation Premium Reserve
Unspent Loans
Unspent Grants
AASB 107.
Aus20.2
(b)
1,163,026
775,544
977,669
623,039
178,880
644,160
0
30,000
1,566,637
5,958,955
493,995
839,423
123,188
456,068
59,790
588,462
0
0
2,000,779
4,561,705
Reconciliation of Net Cash Provided By Operating Activities to Net Result
Net Result
5,983,637
3,521,496
5,197,532
Depreciation
Write-down of Fair Value of Investments
(Profit)/Loss on Sale of Asset
(Increase)/Decrease in Receivables
(Increase)/Decrease in Inventories
Increase/(Decrease) in Payables
Increase/(Decrease) in Employee Provisions
Grants/Contributions for the Development
of Assets
Net Cash from Operating Activities
AASB 107.50
(c)
Undrawn Borrowing Facilities
Credit Standby Arrangements
Bank Overdraft limit
Bank Overdraft at Balance Date
Credit Card limit
Credit Card Balance at Balance Date
Total Amount of Credit Unused
Loan Facilities
Loan Facilities - Current
Loan Facilities - Non-Current
Loan Facilities in use at Balance Date
Unused Loan Facilities at Balance Date
Section 4 - Budget Process – Page 97
1,861,225
903,544
1,356,016
1,001,539
129,701
236,668
1,000
0
0
5,489,693
7,200,000
0
(91,795)
(320,085)
193,085
563,972
(412,351)
6,907,407
60,000
54,277
(106,454)
(89,854)
259,498
(289,554)
7,100,000
0
(2,284,581)
(90,278)
(1,749)
702,643
(701,905)
(5,658,334)
7,458,129
(2,994,037)
7,322,779
(5,856,328)
4,065,334
400,000
0
24,000
0
424,000
400,000
0
31,000
(8,212)
422,788
400,000
0
24,000
0
424,000
108,612
1,744,603
1,853,215
0
83,612
1,558,215
1,641,827
30,000
70,597
2,699,145
2,769,742
0
Note 16
Commentary – Major Land Transactions
LGA s. 3.59
The Local Government Act 1995 s.3.59 Commercial enterprises by local
governments defines a land transaction as an agreement, or several
agreements for a common purpose, under which a local government is to –
 Acquire or dispose of an interest in land, or
 Develop land.
Before the local government enters into a land transaction that is preparatory to
entry into a major land transaction, a local government is to prepare a business
plan.
F&G r. 7
FMR r. 27(k)
Under Regulation 8A of the Function and General Regulations, for a land
transaction to be a major land transaction, the total value has to be the lesser of:

$10 million or 10% of the operating expenditure of a local government in
the metropolitan area or a major regional centre; or

$2 million or 10% of the operating expenditure of other local governments.
If the transaction was entered into during a prior year the local government is
required to disclose an estimate of opening assets and liabilities.
In relation to each major land transaction according to nature or type –
(i) an estimate of revenue and expenditure;
(ii) estimated assets and liabilities at 1 July;
(iii) such other information as is necessary to provide full and complete
information on the transaction; and
FMR r. 30(1)(d)
LGA s. 3.58
Comparative figures are also required for each transaction.
Disposing of Property
(2)
(3)
Except as stated in this section, a local government can only dispose of
property to —
(a)
the highest bidder at public auction; or
(b)
the person who at public tender called by the local government
makes what is, in the opinion of the local government, the most
acceptable tender, whether or not it is the highest tender.
A local government can dispose of property other than under
subsection (2) if, before agreeing to dispose of the property —
(a)
it gives local public notice of the proposed disposition —
and
(b)
(4)
it considers any submissions made to it before the date specified
in the notice and, if its decision is made by the council or a
committee, the decision and the reasons for it are recorded in the
minutes of the meeting at which the decision was made.
The details of a proposed disposition that are required by
subsection (3)(a)(ii) include —
(a)
the names of all other parties concerned; and
(b)
the consideration to be received by the local government for the
disposition; and
(c)
the market value of the disposition —
Section 4 - Budget Process – Page 98
(i)
as ascertained by a valuation carried out not more than
6 months before the proposed disposition; or
(ii)
as declared by a resolution of the local government on
the basis of a valuation carried out more than 6 months
before the proposed disposition that the local
government believes to be a true indication of the value
at the time of the proposed disposition.
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r.27(k)
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
16. MAJOR LAND TRANSACTIONS
Lester Residential Subdivision
(a) Details
The council owns land, freehold at East Location 18, Lot 3 which is bounded by Chester Road and Owen
Street. During the 2006/07 year council created 30 blocks from part of Lot 3 and these blocks were sold at
auction and profit transferred into a cash reserve established for land development. The council is planning
to develop 90 lots after stage 2 of the development and intends to sell lots over the next 2-3 financial years.
The council has developed a Business Plan in relation to this development, a copy of which is available on
council's website.
(b) Current year transactions
Operating Income
No Operating Income
201Z
$
Operating Expense
Materials and Contracts
Interest Expenses
Other
Total
Capital Income
Land Sales
New Borrowings
Transfer from Land Development Reserve
Capital Expenditure
Purchase Land
Drainage and other works
Repayment of Borrowings
Transfer to Land Development Reserve
(c) Expected Future Cash Flows
Cash Inflows
Loan Borrowings
Land Sales
Transfer from Land
Development Reserve
Cash Outflows
Printing & Stationery
Selling Costs
Interest on
of Borrowings
Development Expenses
Engineering Allocation
Administration Allocation
Transfer to Land
Development Reserve
Repayment of Borrowings
Drainage and other works
Purchase Land
Net Cash Flows
Section 4 - Budget Process – Page 99
Total
201Y
$
201Z
$
201Y
$
0
0
0
0
(3,500)
(34,254)
(113,000)
(150,754)
(150,754)
(2,400)
(35,353)
(104,658)
(142,411)
(142,411)
1,700,000
0
1,066,000
0
927,644
202,701
(3,421,373)
(300,000)
(25,203)
(1,764,199)
(2,744,775)
(2,056,759)
(202,701)
(24,104)
(781,352)
(1,934,571)
201A
$
201B
$
Total
$
927,644
0
0
0
0
3,700,000
0
4,000,000
202,701
1,130,345
480,957
480,957
480,957
4,180,957
485,957
4,485,957
927,644
7,700,000
0
1,650,572
10,278,216
(400)
0
(500)
(5,000)
(500)
(5,000)
(500)
(10,000)
(1,900)
(20,000)
(35,353)
(2,000)
(12,500)
(92,158)
(34,254)
(3,000)
(13,000)
(100,000)
(35,967)
(3,000)
(13,000)
(100,000)
(37,765)
(3,000)
(13,000)
(100,000)
(143,338)
(11,000)
(51,500)
(392,158)
(781,352)
(24,104)
(202,701)
(2,056,759)
(3,207,327)
(2,076,982)
(1,764,199) (3,700,000) (4,000,000) (10,245,551)
(25,203)
(23,490)
(21,692)
(94,490)
(300,000) (300,000) (300,000) (1,102,701)
(3,421,373)
0
0 (5,478,132)
(5,666,529) (4,180,957) (4,485,957) (17,540,770)
(5,185,572)
0
0 (7,262,554)
Note 17
Commentary – Trading Undertakings and
Major Trading Undertakings
FMR r. 27(i) & (j)
If the local government has a major trading undertaking the disclosure
requirements for each undertaking are –
(i) separately, in relation to each trading undertaking —
(i) an income statement;
(ii) such other information as is necessary to provide full and complete
information on the undertaking;
(j) in relation to each major trading undertaking, in addition to the information
required by paragraph (i), a statement setting out all other revenue and
expenditure which is not included in the income statement referred to in
paragraph (i)(i) but which has been used in the pricing structure for goods or
services to be provided by the undertaking.
FMR r. 30(1)(d)
Comparative figures are also required for each undertaking.
LGA s. 3.59
The Local Government Act 1995 s.3.59 (2) requires that before entering into a
major trading or land transaction OR entering into a land transaction that is
preparatory to entering into a major land transaction, a local government is to
prepare a business plan. S.3.59 (3) requires the Business Plan it to include the
following:







an overall assessment of the undertaking
its expected effect on the provision of facilities and services
its expected effect on other persons providing facilities and services
its expected financial effect
its expected effect on the Plan for the Future
the ability of the local government to manage the undertaking
any other matters
s.3.59 (4) (i) (ii) requires that the local government is to give Statewide public
notice of its proposal to commence the major undertaking and to provide a copy
of the business plan in a place specified in that notice.
Minimum value of major land transaction
F&G r. 8A
For a land transaction to be a major land transaction the total value of —
(a)
the consideration under the transaction; and
(b)
anything done by the local government for achieving the purpose
of the transaction,
Is the lesser of:

$10 million or 10% of the operating expenditure of a local government in
the metropolitan area or a major regional centre; or

$2 million or 10% of the operating expenditure of other local governments
incurred by the local government from its municipal fund in the last completed
financial year.
Note: (b) expenditure should include such items as printing and stationery, selling
costs, development costs, consultant engineer, legal fees, administration
allocation costs (e.g. CEO, planner, building surveyor etc. time allocated
to project) and all expenses relating to the undertaking.
Section 4 - Budget Process – Page 100
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r. 27(i)
FMR r. 27(j)
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
17.
TRADING UNDERTAKINGS AND MAJOR TRADING
UNDERTAKINGS
ABC Aerodrome
Council's objective is to maintain a safe landing airstrip and functional airport amenities
conducive to the promotion of the district as a tourist and business destination. Operating
Costs are met by landing fees charged. Annual surpluses are transferred to reserve funds
in the next financial year to finance future improvements to the facility.
(a)
Operating Statement
Operating Revenues
Passenger Landing Fees
Commissions Fuel Agency
Rental
Identification Charges
Other Sundry Income
Subsidies
Gain on Disposal of Asset
Reimbursement Expenses
Less Operating Expenses
Employee Expenses
Insurance
Building Expenses
Grounds & Strip Maintenance
Fuel Agency Expense
Marketing
Identification Expenses
Administration Overheads
Depreciation
Other
Operating Result
(b)
Non-Operating Income & Expenditure
Capital Revenue
Proceeds on Disposal
Transfer From Reserve Fund
Section 4 - Budget Process – Page 101
201Z
Budget
$
201Y
Actual
$
201Y
Budget
$
565,000
15,000
13,000
200
500
340,000
107,295
3,000
1,043,995
569,423
15,277
12,542
182
420
319,164
3,545
8,042
928,595
500,000
14,800
13,000
2,040
339,367
3,100
872,307
(112,000)
(18,000)
(17,000)
(44,000)
(4,500)
(7,000)
(500)
(27,000)
(96,500)
(33,500)
(360,000)
(171,650)
(17,776)
(16,827)
(64,130)
(4,216)
(7,393)
(271)
(29,618)
(96,793)
(41,043)
(449,717)
(169,138)
(16,130)
(10,584)
(51,742)
(5,500)
(5,000)
(1,500)
(27,458)
(85,051)
(33,450)
(405,553)
683,995
478,878
466,754
360,000
422,000
782,000
24,545
695,230
719,775
24,546
405,210
429,756
This page has been intentionally left blank.
Section 4 - Budget Process – Page 102
AASB 101.10(e)
AASB 101.51
AASB 101.112
FMR r. 27(i)
FMR r. 27(j)
TOWN OF EAGLE BAY
NOTES TO AND FORMING PART OF THE BUDGET
FOR THE YEAR ENDING 30 JUNE 201Z
17.
TRADING UNDERTAKINGS AND MAJOR TRADING UNDERTAKINGS
(continued)
(b)
Non-Operating Income & Expenditure (continued)
201Z
Budget
$
Less Capital Expenditure
Land & Buildings
Infrastructure
Runway Extension
Plant & Equipment
Transfers to Cash Reserves
(c)
201Y
Actual
$
201Y
Budget
$
Non-Operating Result
(30,000)
(340,000)
(160,000)
(385,801)
(915,801)
(133,801)
(25,560)
(43,836)
(175,874)
(36,472)
(624,110)
(905,852)
(186,077)
(28,956)
(46,575)
(229,644)
(45,354)
(215,000)
(565,529)
(135,773)
TOTAL NET TRADING UNDERTAKING
550,194
292,801
330,981
Financial Position
CURRENT ASSETS
Cash Assets
Receivables
TOTAL CURRENT ASSETS
550,156
426,766
976,922
212,605
150,869
363,474
NON-CURRENT ASSETS
Property Plant & Equipment
Infrastructure
TOTAL NON-CURRENT ASSETS
1,211,560
1,970,545
3,182,105
1,111,548
1,934,045
3,045,593
TOTAL ASSETS
4,159,027
3,409,067
CURRENT LIABILITIES
Payables (Creditors & Wages Payable)
Provisions (Employee Entitlements)
TOTAL CURRENT LIABILITIES
88,910
53,001
141,911
68,910
9,036
77,946
NON-CURRENT LIABILITIES
Provisions (Employee Entitlements)
TOTAL NON-CURRENT LIABILITIES
18,810
18,810
16,810
16,810
160,721
94,756
NET ASSETS
3,998,306
3,314,311
EQUITY
Accumulated Surplus
Reserves - Cash Backed
TOTAL EQUITY
3,855,625
142,681
3,998,306
3,254,521
59,790
3,314,311
TOTAL LIABILITIES
Section 4 - Budget Process – Page 103
4.11.1 Cross Reference Guide
This guide is a useful tool to ensure that the notes to the statements agree with the
figures used in the statutory statements.
REFERENCE
BALANCE WITH
DESCRIPTION
Statement of Comprehensive Income by Nature or Type (SCI - N or T)
Rates
Note 8
Total Rates including Specified Area Rates
Fees and Charges
Note 13
Total Fees & Charges
Service Charges
Note 10
Revenue Raised
Interest Earnings
Note 2(a)(ii)
Interest Earnings
Note 12
Interest on Unpaid Rates and Instalments
Interest Expenses
Note 2(a)(i)
Interest Expenses (Finance Costs)
Note 5(a)
Interest Repayments on Borrowings
Depreciation
Note 2(a)(i)
Depreciation
Note 15(b)
Depreciation
Non-Operating Grants, Subs and
Non-Operating Grants, Subsidies
SCI - Program
Contributions
Non-Operating Grants, Subs and
and Contributions
SCF
Contributions
Non-Operating Grants, Subs and
Note 15(b)
Contributions
Fair Value Adjustments to
Note 2(a)(i)
Significant Expense
financial assets at fair value
Profit on Asset Disposals
Note 4
Summary – Profit on Asset Disposal
Loss on Asset Disposals
Note 4
Summary – Loss on Asset Disposal
Net Result
Note 15(b)
Net Result
Other Comprehensive Income
SCI - Program
Change on revaluation of non-current assets
or other change
Total Comprehensive Income
SCI - Program
Total Comprehensive Income
Statement of Comprehensive Income by Program (SCI - Program)
Non-Operating Grants, Subs and
Non-Operating Grants, Subsidies
SCI - N or T
Contributions
Non-Operating Grants, Subs and
and Contributions
SCF
Contributions
Non-Operating Grants, Subs and
Note 15(b)
Contributions
Profit/(Loss) on Asset Disposals
SCI - N or T
Profit and Loss Totals
Note 4
Summary - Profit/(Loss) on Asset Disposal
Net Result
SCI - N or T
Net Result
Note 15(b)
Net Result
Other Comprehensive Income
SCI – N or T
Change in revaluation of non-current assets
Total Comprehensive Income
SCI – N or T
Total Comprehensive Income
Statement of Cash Flows (SCF)
Net Cash provided by Operating
Activities
Payments for Development of
Land Held for Resale
Payments for Purchase of Property,
Plant and Equipment
Payments for Construction
Infrastructure
Note 15(b)
Net Cash From Operating Activities
Note 3
Acquisition of Assets by Class
Note 3
Acquisition of Assets by Class
Note 3
Acquisition of Assets by Class
Section 4 - Budget Process – Page 104
CROSS REFERENCE GUIDE (continued)
REFERENCE
Non-Operating Grants, Subsidies
and Contributions
BALANCE WITH
SCI – N or T
SCI - Program
Note 15(b)
Proceeds from Disposal of Assets
Repayment of Debentures
Proceeds from SS Loans
Proceeds from New Loans
Cash at Beginning of Year
Cash and Cash Equivalents
at End of the Year
Rate Setting Statement (RSS)
(Profit)/Loss on Asset Disposals
Depreciation on Assets
Purchase of Land Held for Resale
Purchase of Land and Buildings
Purchase Plant and Equipment
Purchase of Furniture and
Equipment
Infrastructure Assets
Repayment of Debentures
Proceeds from Disposal of Assets
Proceeds from New Debentures
SS Loan Principal Income
Transfer to Reserves
Transfer from Reserves
Est. Surplus/(Deficit) 1 July B/F
Est. Surplus/(Deficit) 30 June C/F
Amount Required to be
Raised from Rates
RSS
Note 4
RSS
Note 5(a)
RSS
Note 5(a)
RSS
Note 5(b)
Prior Year Total
Note 15(a)
Note 15(a)
Note 15(b)
Note 4
SCI – N or T
Note 2(a)(i)
Note 15(b)
SCF
Note 3
SCF
Note 3
SCF
Note 3
SCF
Note 3
SCF
Note 3
SCF
Note 5(a)
SCF
Note 4
SCF
Note 5(b)
SCF
Note 5(a)
Note 6
Note 6
Annual Statements
Note 7
Note 7
Note 8
Section 4 - Budget Process – Page 105
DESCRIPTION
Non-Operating Grants, Subsidies and
Contributions
Non-Operating Grants, Subsidies and
Contributions
Non-Operating Grants, Subs and
Contributions
Proceeds from Disposal of Assets
Actual Sale Price
Repayment of Debentures
Actual Principal Repayments
SS Loans Principal Income
Principal Repayments (*)
Proceeds from New Debentures
Actual Amount Borrowed
Prior Annual Statements Total Cash
Prior Year Cash and Cash Equivalents
Cash and Cash Equivalents
Reconciliation of Net Cash
Summary Total on Asset Disposals
Depreciation
Total Depreciation
Reconciliation of Net Cash
Payments for Development of Land Held for
Resale
Acquisition of Assets by Class
Payments for Property, Plant and Equipment
Acquisition of Assets by Class
Payments for Property, Plant and Equipment
Acquisition of Assets by Class
Payments for Property, Plant and Equipment
Acquisition of Assets by Class
Payments for Construction of Infrastructure
Acquisition of Assets by Class
Repayment of Debentures
Actual Principal Repayments
Proceeds from Disposal of Assets
Actual Sale Price
Proceeds from New Debentures
Actual Amount Borrowed
Proceeds from SS Loans
Principal Repayments (*)
Summary of Transfer Reserves - TO
Summary of Transfer Reserves - FROM
30 June Carried Forward Figure
Net Current Assets Prior Year Calculations
Estimate for the Budget
Total Revenue – Sub Total to Rate
Setting Statement
CROSS REFERENCE GUIDE (continued)
REFERENCE
Note 2 (a)
Operating Revenues and
Expenses - Net Result
Note 3
Acquisition of Assets
Note 4
Disposal of Assets
Note 5
Information on Borrowings
Debenture Repayments
Note 6
Reserves - Cash/Investment
Backed
Note 7 - Net Current Assets
Rate Setting Statement
Information on Borrowings
Reserves
Reconciliation of Cash
Note 8 - Rating Information
Rates
BALANCE WITH
DESCRIPTION
SCI – N or T
SCI – N or T
RSS
Note 15(b)
SCI – N or T
Note 5(a)
SCI – N or T
Note 12
Fair Value Adjustments to Financial Assets
Depreciation
Depreciation Written Back
Reconciliation of Net Cash
Interest Expenses
Interest Repayments on Borrowings
Interest Earnings
Rate Interest Charges and Instalments
SCF
RSS
Appendix II
Payments for Capital
Purchase of Capital
Capital Templates
SCI – N or T
SCI – Program
SCF
RSS
RSS
Appendix II
Profit and Loss on Asset Disposals
Profit and Loss on Asset Disposals
Proceeds from Disposal of Assets
(Profit)/Loss on Asset Disposal written back
Proceeds from Disposal of Assets
Capital Templates
SCI - N or T
SCF
SCF
RSS
RSS
RSS
Note 2(a)(i)
Appendix II
Interest Expenses
Repayment of Debentures
Proceeds from New Debentures
Repayment of Debentures
Proceeds from SS Loans
Proceeds from New Debentures
Interest Expenses
Capital Templates
SFP (Appendix I)
SCE (Appendix I)
RSS
RSS
Appendix II
Equity Summary
Reserve Transfers
Transfer to Reserves
Transfer from Reserves
Capital Templates
RSS
RSS
Note 5
Note 6
Note 15(a)
Estimated B/F to Budget from prior annuals
Estimated C/F for Budget
SSL Principal Repayments
Cash Backed Leave Reserve
Cash Restricted and Unrestricted
SCI – N or T
RSS
Note 9
Note 11
Rates including Specified Area Rates
Amount Required to be Raised from General Rates
Specified Area Rates
Discounts
Section 4 - Budget Process – Page 106
CROSS REFERENCE GUIDE (continued)
REFERENCE
BALANCE WITH
DESCRIPTION
Note 9 - Specified Area Rate
Rating Information
Note 8
Specified Area Rates
Note 10 - Service Charges
Service Charges
SCI – N or T
Service Charges
Note 11 - Rate Payment discounts, Waivers and Concessions
Rating Information
Note 8
Discounts, Incentives, Concessions
Write-offs
Note 12
Interest Charges and Instalments
Note 2(a)(ii)
Other Interest Revenue
Note 13 - Fees and Charges
Fees and Charges
SCI – N or T
Fees and Charges
Note 15 - Notes to the Statement of Cash Flows
Cash and Cash Equivalents and the End of
(a) Reconciliation of Cash
SCF
the Year
Note 7
Total Unrestricted and Restricted Cash
(b) Reconciliation of Net Cash
SCI – N or T
Net Result
Fair Value Adjustments to financial assets at
Provided by Operating
SCI – N or T
fair value
Activities to Net Result
SCI – N or T
Depreciation
SCI – N or T
Profit/(Loss) on Asset Disposals
Non-Operating Grants, Subsidies and
SCI – N or T
Contributions
SCI - Program
Net Result
SCI - Program
Profit/(Loss) on Asset Disposals
Non-Operating Grants, Subsidies and
SCI - Program
Contributions
Non-Operating Grants, Subsidies and
SCF
Contributions
SCF
Net Cash provided by Operating activities
RSS
Depreciation
RSS
(Profit)/Loss on Asset Disposals written back
Note 2(a)(i)
Depreciation
Note 4
Summary Profit/(Loss) on Asset Disposals
(c) Undrawn Borrowing Facilities
Note 5(c)
Unspent Debentures
Statement on Financial Position (SFP) - Appendix I
Cash and Cash Equivalents and the End of
Cash and Cash Equivalents
SCF
the Year
Note 7
Total Unrestricted & Restricted Cash
Note 15(a)
Cash and Cash Equivalents
Investments
Note 7
Investments
Trade and Other Receivables
Note 7
Total Current Trade and Other Receivables
Inventories
Note 7
Total Current Inventories
Total Current Liabilities
Note 7
Total Current Payables and Provisions
Long Term Borrowings
Note 5(a)
Total Current Long Term Borrowings
Note 15(c)
Loan Facilities - Current and Non-Current
Reserves – Cash/Investment
SCE (Appendix I)
Transfer to/from Reserves
Backed
Note 6
Total Reserves
Note 7
Restricted Reserves
Reserves – Asset Revaluation
SCE (Appendix I)
Total Other Comprehensive Income
Net Assets
SCE (Appendix I)
Total Equity
Statement of Changes in Equity (SCE)
Reserve Transfers
Note 6
Total Net Transfers To/(From) Reserves
Total Equity
SFP (Appendix I)
Net Assets
Section 4 - Budget Process – Page 107
4.12 Annual Budget Review
Local governments are required to conduct a budget review between 1 January and 31
March each financial year. This is a requirement of Regulation 33A of the Local
Government (Financial Management) Regulations 1996 (FMR). The intention of the
legislation is to ensure local governments conduct at least one budget review between
six and eight months into a financial year.
A budget review is a detailed comparison of the year to date actual results with the
adopted or amended budget. It establishes whether a local government continues
meeting its budget commitments, is in receipt of income and incurs expenditure in
accordance with the adopted budget. The results of the review and accompanying report
from senior staff should be presented to the audit committee for consideration and
advice to council.
FMR r. 33A(1) requires that between 1 January and 31 March in each financial year a
local government is to carry out a review of its annual budget for that year.
FMR r. 33A(2A) requires the review of an annual budget for a financial year must –
(a)
(b)
(c)
consider the local government’s financial performance in the period
beginning on 1 July and ending no earlier than 31 December in that
financial year; and
consider the local government’s financial position as at the date of the
review; and
review the outcomes for the end of that financial year that are forecast in
the budget.
FMR r. 33A(2) and (3) require the results of the budget review to be submitted to council
within 30 days of the review. Council is then to consider a review submitted to it and
determine whether or not to adopt the review, any part of the review or any
recommendations made in the review.
FMR r. 33A(4) requires that within 30 days after council has made a determination a
copy of the review and determination is to be provided to the Department.
Local governments should consider reviewing their budget on a regular basis as well as
the statutory requirement between the above dates. Best practice would indicate that
the budget should be reviewed on a three monthly cycle and be undertaken on a line by
line basis.
It is extremely important for a local government to review the budget immediately
following the annual financial statements being completed and audited. Very often the
actual carried forward figure in the budget will differ from the audited actual carried
forward figure and this should be adjusted by a budget variation adopted by council.
Note: If prior budget reviews have been undertaken, the r 33A review must still cover
the period from 1 July and also cover any adjustments made as a result of prior reviews.
This can usually be addressed by including an additional column in the statutory review
headed ‘Previous Budget Review” or similar.
Section 4 - Budget Process – Page 108
TOWN OF EAGLE BAY
BUDGET REVIEW
FOR THE PERIOD ENDED 28 FEBRUARY 201Z
TABLE OF CONTENTS
Statement of Budget Review – By Program
110
Statement of Budget Review – By Nature or Type
112
Statement of Budget Review – By Business Unit
114
Notes to the Budget Review Report
Closing Funds and Budget Amendments
116
Budget Review Agenda Item
118
Section 4 - Budget Process – Page 109
Note:
When forwarding the budget review documents, the Department of Local Government only
requires the following information (refer to following pages for suggested formats):
1.
Minutes that show the report and resolution
2.
Statement of Budget Review by program, nature or type or business unit showing the
new opening (after audit of prior year financial statements) and closing funds
3.
Note on how closing funds are derived
4.
Line item description of variations
SURPLUS/(DEFICIT)
BY PROGRAM
Note
Action
Result
Revised
Budget
Result
Adopted
Budget
Result
YTD
Actual
(a)
This total is the sum of
operating revenue,
operating expenditure,
capital income and
capital expenditure,
excluding rates.
($17,171,106)
($17,177,713)
($13,639,848)
(b)
Add back all non-cash
items
$7,108,205
$7,081,534
$4,712,297
(c)
Add surplus/(deficit) July
1 brought forward
$1,163,514
$1,163,514
$1,163,514
(d)
Deduct surplus/(deficit)
June 30 carried forward
0
$6,722
$1,103,367
(e)
Sum (a), (b) and (c),
deduct amount at (d).
Total is amount of rates
to be levied.
($8,899,387)
($8,939,387)
($8,867,404)
Section 4 - Budget Process – Page 110
TOWN OF EAGLE BAY
STATEMENT OF BUDGET REVIEW
BY PROGRAM
FOR THE PERIOD ENDING 28 FEBRUARY 201Z
Revenue
General Purpose Funding
Governance
Law, Order and Public Safety
Health
Education and Welfare
Housing
Community Amenities
Recreation and Culture
Transport
Economic Services
Other Property and Services
Expenses
General Purpose Funding
Governance
Law, Order and Public Safety
Health
Education and Welfare
Housing
Community Amenities
Recreation and Culture
Transport
Economic Services
Other Property and Services
Capital Income
Proceeds from Disposal of Assets
New Borrowings
Self Supporting Loan Principal
Transfer from Reserve
Capital Expenditure
Land Held for Resale
Land & Buildings
Infrastructure - Roads
Infrastructure - Other
Plant and Equipment
Furniture and Equipment
Repayment of Debentures
Transfer to Reserves
Adopted
Budget
(a) $
220,617
3,688,491
707,433
270,249
1,710,763
600
1,738,813
1,368,770
6,367,662
518,813
1,030,584
Revised
Budget
(b) $
220,617
3,688,491
677,479
270,249
1,710,763
600
1,732,678
1,368,770
6,367,662
418,304
1,030,584
YTD
Actual
$
147,078
3,458,994
451,653
180,166
1,140,509
400
1,155,119
912,513
4,245,108
278,869
687,056
Variance
(b) - (a)
0
0
(29,954)
0
0
0
(6,135)
0
0
(100,509)
0
17,622,795
17,486,187
12,657,465
(136,598)
(826,134)
(176,970)
(1,371,758)
(369,302)
(1,792,712)
(1,500)
(3,295,015)
(4,391,021)
(6,940,311)
(675,667)
(698,155)
(826,134)
(191,665)
(1,398,315)
(369,302)
(1,792,712)
(1,500)
(3,295,015)
(4,348,770)
(6,940,311)
(567,602)
(579,205)
(550,756)
(127,777)
(932,210)
(246,201)
(1,195,141)
(1,000)
(2,196,677)
(2,899,180)
(4,626,874)
(378,401)
(386,137)
0
(14,695)
(26,557)
0
0
0
0
42,251
0
108,065
118,950
(20,538,545)
(20,310,531)
(13,540,354)
228,014
602,000
320,000
25,399
2,739,845
583,250
320,000
25,399
2,749,622
388,833
320,000
12,700
0
(18,750)
0
0
9,777
3,687,244
3,678,271
721,533
(8,973)
(3,421,373)
(828,500)
(6,865,895)
(1,357,000)
(1,499,000)
(20,000)
(83,612)
(3,867,220)
(3,421,373)
(883,990)
(6,830,505)
(1,357,000)
(1,449,000)
(20,000)
(83,612)
(3,986,170)
(3,045,189)
(883,990)
(6,984,459)
(1,129,643)
(1,320,005)
(19,000)
(41,806)
(54,400)
0
(55,490)
35,390
0.00
6.70
-0.52
50,000
-3.34
0
(118,950)
0.00
3.08
(17,942,600)
(18,031,650)
(13,478,492)
(89,050)
(17,171,106)
(17,177,713)
(13,639,848)
(6,607)
7,200,000
0
(91,795)
7,181,020
0
(99,486)
4,787,347
0
(75,050)
(18,980)
0
(7,691)
Total Operating + Non-Operating
(a)
ADJUST- NON CASH ITEMS
Depreciation
Movements
(Profit)/Loss on Sale of Assets
(b)
ADD Surplus/(Deficit) July 1 B/F Opening
LESS Surplus/(Deficit) June 30 C/F Closing
(c)
(d)
1,163,514
0
1,163,514
6,722
1,163,514
1,103,367
0
6,722
Amount Required from Rates
(e)
(8,899,387)
(8,939,387)
(8,867,404)
(40,000)
Section 4 - Budget Process – Page 111
Variance
%
0.00
0.00
-4.23
0.00
0.00
0.00
-0.35
0.00
0.00
-19.37
0.00
0.00
1.94
0.00
0.00
0.00
-0.96
0.00
-15.99
-17.04
-3.11
0.00
0.00
0.36
-0.26
8.38
SURPLUS/(DEFICIT)
BY NATURE OR TYPE
Note
Action
(a)
This total is the sum of
operating revenue,
operating expenditure,
capital income and capital
expenditure, including
rates.
(b)
Result
Adopted
Budget
Result
Revised
Budget
Result
YTD
Actual
($8,271,719)
($8,238,326)
($4,772,444)
Add back all non-cash
items
$7,108,205
$7,081,534
$4,712,297
(c)
Add surplus/(deficit) July
1 brought forward
$1,163,514
$1,163,514
$1,163,514
(d)
Deduct surplus/(deficit)
June 30 carried forward
0
$6,722
$1,103,367
(e)
Sum (a), (b) and (c),
deduct amount at (d).
Total is a control amount
which must equal zero (0)
0
0
0
Section 4 - Budget Process – Page 112
TOWN OF EAGLE BAY
STATEMENT OF BUDGET REVIEW
BY NATURE OR TYPE
FOR THE PERIOD ENDING 28 FEBRUARY 201Z
Operating Income
Rates
Operating Grants, Subsidies & Contributions
Grants for the Development of Assets
Fees and Charges
Service Charges
Interest Earnings
Profit on Disposal of Assets
Other Revenue
Operating Expenditure
Employee Costs
Materials and Contracts
Utility Charges
Depreciation
Interest Expenses
Insurance Expenses
Loss on Disposal of Assets
Other Expenditure
Capital Income
Proceeds from Disposal of Assets
New Borrowings
Self-Supporting Loan Principal
Transfer from Reserve
Capital Expenditure
Land Held for Resale
Land & Buildings
Infrastructure - Roads
Infrastructure - Other
Plant and Equipment
Furniture and Equipment
Repayment of Debentures
Transfer to Reserves
Adopted
Budget
(a) $
8,914,617
5,424,320
5,658,334
5,099,750
0
500,000
109,795
815,366
Revised
Budget
(b) $
8,954,617
5,424,320
5,557,825
5,063,661
0
500,000
109,795
815,366
YTD
Actual
$
8,882,634
3,950,891
4,399,077
3,342,166
0
333,333
73,197
543,577
Variance
(b) - (a)
40,000
0
(100,509)
(36,089)
0
0
0
0
26,522,182
26,425,584
21,524,876
(96,598)
(7,821,052)
(3,995,534)
(457,291)
(7,200,000)
(92,149)
(346,481)
(18,000)
(608,038)
(7,670,736)
(3,917,836)
(457,291)
(7,200,000)
(92,149)
(346,481)
(18,000)
(608,038)
(5,113,824)
(2,611,891)
(304,861)
(4,800,000)
(61,433)
(230,987)
(12,000)
(405,359)
150,316
77,698
0
0
0
0
0
0
(20,538,545)
(20,310,531)
(13,540,354)
228,014
602,000
320,000
25,399
2,739,845
583,250
320,000
25,399
2,749,622
388,833
320,000
12,700
0
(18,750)
0
0
9,777
3,687,244
3,678,271
721,533
(8,973)
(3,421,373)
(828,500)
(6,865,895)
(1,357,000)
(1,499,000)
(20,000)
(83,612)
(3,867,220)
(3,421,373)
(883,990)
(6,830,505)
(1,357,000)
(1,449,000)
(20,000)
(83,612)
(3,986,170)
(3,045,189)
(883,990)
(6,984,459)
(1,129,650)
(1,320,005)
(19,000)
(41,806)
(54,400)
0
(55,490)
35,390
0.00
6.70
-0.52
50,000
-3.34
0
(118,950)
0.00
3.08
(17,942,600)
(18,031,650)
(13,478,499)
(89,050)
(8,271,719)
(8,238,326)
(4,772,444)
33,393
7,200,000
0
(91,795)
7,181,020
0
(99,486)
4,787,347
0
(75,050)
(18,980)
-0.26
(7,691)
8.38
Total Operating + Non-Operating
(a)
ADJUST- NON CASH ITEMS
Depreciation
Movements
(Profit)/Loss on Sale of Assets
(b)
ADD Surplus/(Deficit) July 1 B/F Opening
LESS Surplus/(Deficit) June 30 C/F Closing
(c)
(d)
1,163,514
0
1,163,514
6,722
1,163,514
1,103,367
0
6,722
Control = 0
(e)
0
0
0
0
Section 4 - Budget Process – Page 113
Variance
%
0.46
0.00
-1.78
-0.71
0.00
0.00
0.00
-1.92
-1.94
0.00
0.00
0.00
0.00
0.00
0.00
-3.11
0.00
0.00
0.36
SURPLUS/(DEFICIT)
BY BUSINESS UNIT
Note
Action
(a)
This total is the sum of
operating revenue,
operating expenditure,
capital income and capital
expenditure, including
rates.
(b)
Result
Adopted
Budget
Result
Revised
Budget
Result
YTD
Actual
($8,271,719)
($8,238,326)
($4,772,444)
Add back all non-cash
items
$7,108,205
$7,081,534
$4,712,297
(c)
Add surplus/(deficit) July
1 brought forward
$1,163,514
$1,163,514
$1,163,514
(d)
Deduct surplus/(deficit)
June 30 carried forward
0
$6,722
$1,103,367
0
0
0
(e)
Sum (a), (b) and (c),
deduct amount at (d).
Total is a control amount
which must equal zero (0)
Section 4 - Budget Process – Page 114
TOWN OF EAGLE BAY
STATEMENT OF BUDGET REVIEW
BY BUSINESS UNIT
FOR THE PERIOD ENDING 28 FEBRUARY 201Z
Operating Income
Office of the Chief Executive Officer
Corporate Services
Community Development
Development Services
Aerodrome Operations
Operational Services
Operating Expenditure
Office of the Chief Executive Officer
Corporate Services
Community Development
Development Services
Aerodrome Operations
Operational Services
Capital Income
Proceeds from Disposal of Assets
Office of the Chief Executive Officer
Community Development
Development Services
Aerodrome Operations
Operational Services
New Borrowings
Operational Services
Self Supporting Loan Principal
Community Development
Transfer from Reserve
Corporate Services
Development Services
Aerodrome Operations
Operational Services
Capital Expenditure
Office of the Chief Executive Officer
Corporate Services
Community Development
Development Services
Aerodrome Operations
Operational Services
Repayment of Debentures
Community Development
Development Services
Transfer to Reserves
Corporate Services
Development Services
Aerodrome Operations
Operational Services
Total Operating + Non-Operating
(a)
ADJUST- NON CASH ITEMS
Depreciation
Movements
(Profit)/Loss on Sale of Assets
(b)
ADD Surplus/(Deficit) July 1 B/F Opening
LESS Surplus/(Deficit) June 30 C/F, Closing
Control = 0
(c)
(d)
(e)
Section 4 - Budget Process – Page 115
Adopted
Budget
(a) $
393,221
12,039,396
5,588,558
4,331,014
1,043,995
3,125,998
26,522,182
Revised
Budget
(b) $
393,221
12,079,396
5,488,049
4,331,014
1,043,995
3,089,909
26,425,584
YTD
Actual
$
262,147
11,914,734
3,725,705
2,786,415
695,997
2,139,877
21,524,875
(908,185)
(158,077)
(8,981,637)
(8,449,135)
(360,000)
(1,681,511)
(20,538,545)
(922,880)
(158,077)
(8,831,321)
(8,240,468)
(449,717)
(1,708,068)
(20,310,531)
(615,253)
(105,385)
(5,887,547)
(5,493,645)
(299,811)
(1,138,712)
(13,540,354)
(14,695)
0
150,316
208,667
(89,717)
(26,557)
228,014
1.62
0.00
-1.67
-2.47
50,000
39,000
22,000
360,000
131,000
50,000
39,000
22,000
360,000
112,250
0
0
0
360,000
112,250
0
0
0
0
(18,750)
0.00
0.00
0.00
0.00
-14.31
320,000
320,000
320,000
0
0.00
25,399
25,399
12,700
0
0.00
60,345
1,287,500
422,000
970,000
3,687,244
70,122
1,287,500
422,000
970,000
3,678,271
0
0
0
0
804,950
9,777
0
0
0
(8,973)
16.20
0.00
0.00
0.00
(55,000)
(80,000)
(267,000)
(3,894,873)
(530,000)
(9,164,895)
(55,000)
(80,000)
(267,000)
(3,950,363)
(530,000)
(9,079,505)
(50,000)
(20,000)
(231,000)
(3,426,835)
(421,000)
(9,316,874)
0
0
0
(55,490)
0
85,390
0.00
0.00
0.00
1.42
0.00
-0.93
(58,409)
(25,203)
(58,409)
(25,203)
(16,603)
(25,203)
0
0
0.00
0.00
(67,220)
(2,364,199)
(385,801)
(1,050,000)
(17,942,600)
(67,220)
(2,483,149)
(385,801)
(1,050,000)
(18,031,650)
(54,400)
0
0
0
(13,561,915)
0
(118,950)
0
0
(89,050)
0.00
5.03
0.00
0.00
(8,271,719)
(8,238,326)
(4,772,444)
33,393
7,200,000
0
(91,795)
7,181,020
0
(99,486)
4,787,347
0
(75,050)
(18,980)
-0.26
(7,691)
8.38
1,163,514
0
0
1,163,514
6,722
0
1,163,514
1,103,367
0
0
6,722
0
Variance
(b) - (a)
0
40,000
(100,509)
0
0
(36,089)
(96,598)
Variance
%
0.00
0.33
-1.80
-1.15
1.58
CLOSING FUNDS AND BUDGET AMENDMENTS
Note
Action
Result
Adopted
Budget
Result
Revised
Budget
Result
YTD
Actual
$5,974,413
$6,109,862
$7,243,594
($6,289,693)
($6,418,420)
($6,418,420)
($0)
($0)
($0)
($25,399)
($25,399)
($12,700)
(a)
This net current assets total
should agree with the statement
of financial position in the annual
statements or with the budgeted
net current assets note.
(b)
Deduct restricted reserve
(c)
Deduct restricted unspent grants
only if not being used in a future
budget year
(d)
Deduct SSL Principal
Repayments
(e)
Add back current loan liability as
they represent a current liability
for payments to be made over the
next 12 months already reflected
as expenditure.
$91,592
$91,592
$41,806
(f)
Add back cash backed leave
reserve. This figure must only be
the cash backed amount and not
the provision amount if that
amount is greater. If the
provision amount is less than the
cash backed amount then only
use the provision amount.
$249,087
$249,087
$249,087
(g)
Closing Funds
0
6,722
1,103,367
(h)
The budget amendments table
should open with the adopted
closing fund amount.
(i)
The amended closing fund
amount should be the closing
figure in the amended budget
column.
DLGC
0
$6,722
When undertaking a budget review it is extremely important to ensure that the closing
funds remain within the adopted material variation percentage and dollar amount. In
some cases the opening funds can vary significantly after the annual financial
statements have been audited. In this case it is imperative that this variation is
addressed as soon as possible by taking a variation item to council prior to the statutory
budget review period.
When a local government forwards the statutory budget review to the department any
change in opening and closing funds will be closely monitored.
Section 4 - Budget Process – Page 116
TOWN OF EAGLE BAY
NOTES TO THE BUDGET REVIEW REPORT
FOR THE PERIOD ENDING 28 FEBRUARY 201Z
Adopted
Budget
$
Revised
Budget
$
YTD
Actual
$
6,715,332
917,093
0
526,000
6,850,781
917,093
0
526,000
7,393,157
685,780
98,970
586,000
TOTAL CURRENT ASSETS
8,158,425
8,293,874
8,763,907
Current Liabilities
Creditors and Accounts Payables
Provisions
Current Loan Liability
1,569,087
523,333
91,592
1,569,087
523,333
91,592
905,388
523,333
91,592
Total Current Liabilities
2,184,012
2,184,012
1,520,313
Note 1: CLOSING FUNDS
Closing Funds represented by:
Current Assets
Cash & Cash Equivalents
Receivables
GST Receivable
Inventories
Net Current Assets
(a)
5,974,413
6,109,862
7,243,594
Less Restricted Reserves
Less Restricted Muni
Less SSL Principal Repayments
Add Back Current Loan Liability
Add Back Cash Backed Leave Reserve
(b)
(c)
(d)
(e)
(f)
(6,289,693)
0
(25,399)
91,592
249,087
(6,418,420)
0
(25,399)
91,592
249,087
(6,418,420)
0
(12,700)
41,806
249,087
Closing Funds
(g)
0
6,722
1,103,367
Note 2: BUDGET AMENDMENTS
Amendments to original budget since budget adoption. Surplus/(Deficit)
Increase
Decrease
Amended
Budget
Running
Balance
$
$
$
Description
Budget Adoption - Closing Funds
Increase in Interim Rates due to subdivision
Decrease in fees from burn permits
Decrease in septic tank inspection fees
Tourism Grant not achieved
Contra to grant savings on maintenance to Tourist Bureau
Increase in stationery expenses
Increase in hazard burn expenses
Savings on hall maintenance
Savings on land development costs
Transfer to reserve savings on land development costs
Decrease in proceeds on disposal of loader and grader
Transfer from reserve interest adjustment
Purchase of Land over budget estimate
Road construction under budget estimate
Purchase of major plant under budget estimate
Loss on disposal of plant assets under budget estimate
Depreciation of assets under budget estimate
(h)
Amended Closing Funds as per Council Resolution
(i)
Section 4 - Budget Process – Page 117
(7,691)
(18,980)
0
40,000
10,046
3,911
(96,598)
11,467
(3,228)
(29,785)
12,466
131,416
12,466
(6,284)
3,493
(51,997)
(16,607)
33,393
25,702
6,722
(397,711)
6,722
40,000
(29,954)
(6,135)
(100,509)
108,065
(14,695)
(26,557)
42,251
118,950
(118,950)
(18,750)
9,777
(55,490)
35,390
50,000
404,433
10.1 Budget Review
The following is an example of a Budget Review agenda Item
10.1.1 Adoption of the 201Y/201Z Budget Review
REPORT DATE:
23 March 201Z
LOCATION ADDRESS:
Town of Eagle Bay
APPLICANT
N/A
FILE REFERENCE:
4.20.3
AUTHOR
Tim Jones - Executive Manager Corporate Services
SENIOR OFFICER
James Farnham – Chief Executive Officer
DISCLOSURE OF INTEREST
Nil
APPENDICES
Nil
DOCUMENTS TABLED
Attachment 10.1.1 – 201Y/201Z Budget Review Statement of
Financial Activity and notes on Closing Funds and Budget
Amendments.
PURPOSE
To consider and adopt the Budget Review as presented in the Statement of Financial
Activity for the period 1 July 201Y to 31 December 201Y.
BACKGROUND
A Statement of Financial Activity incorporating year to date budget variations and
forecasts to 30 June 201Y for the period ending 31 December 201Y is presented for
council to consider. The Local Government (Financial Management) Regulations 1996,
regulation 33A, requires that local governments conduct a budget review between 1
January and 31 March in each financial year. A copy of the review and determination is
to be provided to the Department of Local Government within 30 days of the adoption of
the review.
DETAILS
The budget review has been prepared to include information required by the Local
Government Act 1995, Local Government (Financial Management) Regulations 1996
and Australian Accounting Standards. Council adopted a 5% and a $5,000 minimum for
the reporting of material variances to be used in the statements of financial activity and
the annual budget review. Features of the budget review include:
Section 4 - Budget Process – Page 118
Increase in interim rates due to subdivision – interim rates raised on the
new subdivision were not accounted for in the adopted budget.
$40,000
Savings on hall maintenance – agreements have been finalised for
community groups to take over some maintenance of council’s halls.
$42,251
Savings on maintenance to Tourist Bureau due to funding not received
for the project.
$108,065
Application for a grant from Tourism Australia to upgrade the Tourist
Bureau was not successful.
($100,509)
Decrease in fees from burn permits. The budget was overestimated
due to high demand in the previous financial year.
($29,954
Decrease in septic tank inspection fees due to downturn in building not
anticipated.
($6,135)
Increase in stationery expenses due to 2 council surveys being
instigated and not allowed for in original budget.
($14,695)
Increase in hazard burn expenses due to exceptional winter rains that
increased the dry vegetation needing to be dealt with.
($26,557)
Savings on land development costs due to part of the Eagle Bay
subdivision not able to be completed in this financial year.
$118,950
Savings on land development costs to be transferred to reserve for use
in future budgeting for the completion of the Eagle Bay subdivision.
($118,950)
Purchase of land for the Eagle Bay subdivision was over the budget
estimate and is a contributory factor in deferring some development into
the next financial year.
($55,490)
Decrease in proceeds on disposal of loader and grader
($18,750)
Interest on the reserve funds has shown a steady increase to the
budget forecast.
$9,777
Road construction is under budget estimate due to Notary Lane reseal
being deferred until next financial year
$35,390
Purchase of the new tractor has been deferred until the next financial
year as the trade value was very low on the old tractor and it was
decided to utilise for another 12 months.
$50,000
Loss on disposal of the grader was under the budget estimate
($7,691)
Depreciation of assets is adjusted due to the earlier than anticipated
purchase of major plant.
Overall Change (surplus)
($18,980)
$6,722
Due to the above adjustments the closing funds have increased from $0 to $6,722 and
remains within the percentage and dollar material variance set by council in the
201Y/201Z Adopted Budget.
Section 4 - Budget Process – Page 119
CONSULTATION
James Farnham - Chief Executive Officer, Tim Jones - Executive Manager Corporate
Services, Tanya Turner – Executive Manager Development Services, Murray Doulton –
Executive Manager Engineering Services, Amy Woodhouse – Manager Administration
and Community Services.
STATUTORY ENVIRONMENT
Regulation 33A of the Local Government (Financial Management) Regulations 1996
requires:
(1)
Between 1 January and 31 March in each year a local government is to carry
out a review of its annual budget for that year.
(2)
Consideration and review is to be given to a local government’s financial
performance in the period beginning on 1 July and ending no earlier than 31
December in that financial year.
(3)
Within 30 days after a review of the annual budget of a local government is
carried out it is to be submitted to the council.
(4)
A council is to consider a review submitted to it and is to determine* whether
or not to adopt the review, any parts of the review or any recommendations
made in the review.
*Absolute majority required.
(5)
Within 30 days after a council has made a determination, a copy of the review
and determination is to be provided to the Department.
POLICY IMPLICATIONS
The budget is based on the principles contained in the Strategic Plan and Plan for the
Future.
FINANCIAL IMPLICATIONS
Specific financial implications are as outlined in the Detail section of this report.
STRATEGIC IMPLICATIONS
The Budget Review has been developed based on existing strategic planning
documents adopted by council.
VOTING REQUIREMENT
Absolute Majority required: Yes.
TRIPLE BOTTOM LINE ASSESSMENT
Section 4 - Budget Process – Page 120
Economic Implications
The budget has been reviewed based on sound financial management and
accountability principles and is considered to deliver a sustainable economic outcome
for council and the community.
Social Implications
The budget has been reviewed to deliver social outcomes identified in various planning
and community supporting strategies that have previously been adopted by the council.
Environmental Implications
The budget has been reviewed to support key environmental strategies and initiatives
adopted by the council.
COMMENT
The budget has been reviewed to continue to deliver on other strategies adopted by the
council and maintains a high level of service across all programs. The closing funds
remain in surplus as a result of this budget review with a slight increase of $6,722.
Savings in land development costs have been transferred to reserve for future
development projects.
Section 4 - Budget Process – Page 121
OFFICER RECOMMENDATION TO BE DEBATED AND RESOLVED BY COUNCIL
That:
Council adopt the budget review with the following variations for the period 1 July
201Y to 31 December 201Y and amend the budget accordingly:

Increase in interim rates due to subdivision
$40,000

Savings on hall maintenance
$42,251

Savings on building maintenance
$108,065

Savings on land development costs
$118,950

Reserve interest adjustment
$9,777

Savings on road construction
$35,390

Savings on major plant purchases
$50,000

Decrease in burn permit fees
($29,954)

Decrease in septic tank inspection fees
($6,135)

Tourism grant not achieved
($100,509)

Increase in stationery expenses
($14,695)

Increase in hazard burn expenses
($26,557)

Decrease in proceeds on disposal of loader and grader
($18,750)

Purchase of land over budget estimate
($55,490)

Loss on disposal of plant assets over budget estimate
($7,691)

Depreciation of assets over budget estimate
($18,980)

Transfer savings on land development costs to reserve
($108,065)

Increase in closing funds
$6,722
Moved:
Seconded:
ABSOLUTE MAJORITY REQUIRED
Section 4 - Budget Process – Page 122