Please note:  These minutes are yet to be confirmed as a true record of proceedings

CITY OF BUSSELTON

MINUTES FOR THE Finance Committee MEETING HELD ON 12 February 2020

TABLE OF CONTENTS

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening and Announcement of Visitors. 2

2....... Attendance. 2

3....... Public Question Time. 2

4....... Disclosure Of Interests. 2

5....... Confirmation Of Minutes. 2

5.1          Minutes of the Finance Committee Meeting held 22 January 2020. 2

6....... Reports. 3

6.1          LIST OF PAYMENTS MADE - DECEMBER 2019. 3

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 DECEMBER 2019. 15

7....... General Discussion Items. 45

7.1          NEW ACCOUNTING STANDARDS. 45

7.2          LIST OF PAYMENTS BY REGION AND INDUSTRY. 47

8....... Next Meeting Date. 47

9....... Closure. 47

 


Finance Committee                                                             2                                                                12 February 2020

MINUTES

 

MINUTES OF Finance Committee HELD IN the Committee Room, Administration Building, Southern Drive, Busselton, ON 12 February 2020 AT 10.00am.

 

1.               Declaration of Opening and Announcement of Visitors

The Presiding Member opened the meeting at 10.02am.

 

2.               Attendance 

Presiding Member:

 

Members:

 

Cr Paul Carter

Cr Grant Henley

Cr Sue Riccelli

Cr Jo Barrett-Lennard

Cr Phill Cronin

 

Officers:

 

Mr Tony Nottle, Director, Financial and Corporate Services

Mr Paul  Sheridan, Manager, Financial Services

Ms Melissa Egan, Governance Officer   

 

Apologies:

 

Nil

 

3.               Public Question Time  

Nil

 

4.               Disclosure Of Interests

Nil

 

5.               Confirmation Of Minutes

5.1             Minutes of the Finance Committee Meeting held 22 January 2020

COMMITTEE DECISION

F2002/014               Moved Councillor G Henley, seconded Councillor S Riccelli

That the Minutes of the Finance Committee Meeting held 22 January 2020 be confirmed as a true and correct record.

CARRIED 5/0

 

10.09am:      At this time, Mr Nottle entered the meeting.


Finance Committee                                                             4                                                                12 February 2020

6.               Reports

6.1             LIST OF PAYMENTS MADE - DECEMBER 2019

STRATEGIC GOAL

STRATEGIC OBJECTIVE

6. LEADERSHIP Visionary, collaborative, accountable

6.1 Governance systems, process and practices are responsible, ethical and transparent.

SUBJECT INDEX

Financial Operations

BUSINESS UNIT

Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Director Finance and Corporate Services - Tony Nottle

NATURE OF DECISION

Noting: the item does not require a decision of Council and is simply for information purposes and noting

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   List of Payments December 2019  

 

COMMITTEE RECOMMENDATION AND OFFICER RECOMMENDATION

F2002/015               Moved Councillor J Barrett-Lennard, seconded Councillor G Henley

That the Council notes payment of voucher numbers M117662 – M117730, EF068584 – EF069186, T007493 – T007496, DD003973 – DD004004 together totalling $10,566,810.23.

CARRIED 5/0

EXECUTIVE SUMMARY

This report provides details of payments made from the City’s bank accounts for the month of December 2019, for noting by the Council and recording in the Council Minutes.

 

BACKGROUND

The Local Government (Financial Management) Regulations 1996 (the Regulations) requires that when the Council has delegated authority to the Chief Executive Officer to make payments from the City’s bank accounts, that a list of payments made is prepared each month for presentation to, and noting by, the Council.

OFFICER COMMENT

In accordance with regular custom, the list of payments made for the month of December 2019 is presented for information. 

Statutory Environment

Section 6.10 of the Local Government Act 1995 and more specifically, Regulation 13 of the Regulations refer to the requirement for a listing of payments made each month to be presented to the Council.

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

Financial Implications

There are no financial implications associated with the officer recommendation.

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

Options

Not applicable.

CONCLUSION

The list of payments made for the month of December 2019 is presented for information.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

 

 


Finance Committee

6

12 February 2020

6.1

Attachment a

List of Payments December 2019

 


 


 


 


 


 


 


 


 


 

 

10.47am:       At this time, Mr Nottle left the meeting.

 


Finance Committee                                                             21                                                             12 February 2020

6.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 DECEMBER 2019

STRATEGIC GOAL

STRATEGIC OBJECTIVE

6. LEADERSHIP Visionary, collaborative, accountable

6.1 Governance systems, process and practices are responsible, ethical and transparent.

SUBJECT INDEX

Budget Planning and Reporting

BUSINESS UNIT

 Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Director Finance and Corporate Services - Tony Nottle

NATURE OF DECISION

Executive: substantial direction setting, including adopting strategies, plans and policies (excluding local planning policies), tenders, setting and amending budgets, funding, donations and sponsorships, reviewing committee recommendations

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   Investment Report December 2019

Attachment b    Financial Activity Statement December 2019  

 

COMMITTEE RECOMMENDATION AND OFFICER RECOMMENDATION

F2002/016               Moved Councillor J Barrett-Lennard, seconded Councillor G Henley

That the Council receives the statutory financial activity statement reports for the period ending 31 December 2019, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations.

CARRIED 5/0

EXECUTIVE SUMMARY

Pursuant to Section 6.4 of the Local Government Act 1995 (the Act) and Regulation 34(4) of the Local Government (Financial Management) Regulations 1996 (the Regulations), a local government is to prepare, on a monthly basis, a statement of financial activity that reports on the City’s financial performance in relation to its adopted / amended budget.

 

This report has been compiled to fulfil the statutory reporting requirements of the Act and associated Regulations, whilst also providing the Council with an overview of the City’s financial performance on a year to date basis for the period ending 31 December 2019.

BACKGROUND

The Regulations detail the form and manner in which financial activity statements are to be presented to the Council on a monthly basis, and are to include the following:

 

·    Annual budget estimates

·    Budget estimates to the end of the month in which the statement relates

·    Actual amounts of revenue and expenditure to the end of the month in which the statement relates

·    Material variances between budget estimates and actual revenue/expenditure (including an explanation of any material variances)

·    The net current assets at the end of the month to which the statement relates (including an explanation of the composition of the net current position)

 


 

Additionally, and pursuant to Regulation 34(5) of the Regulations, a local government is required to adopt a material variance reporting threshold in each financial year. At its meeting on 31 July 2019, the Council adopted (C1907/131) the following material variance reporting threshold for the 2019/20 financial year:

 

“That pursuant to Regulation 34(5) of the Local Government (Financial Management) Regulations, the Council adopts a material variance reporting threshold with respect to financial activity statement reporting for the 2019/20 financial year as follows:

 

·    Variances equal to or greater than 10% of the year to date budget amount as detailed in the Income Statement by Nature and Type/Statement of Financial Activity report, however variances due to timing differences and/or seasonal adjustments are to be reported on a quarterly basis; and

·    Reporting of variances only applies for amounts greater than $25,000.”

OFFICER COMMENT

In order to fulfil statutory reporting requirements and to provide the Council with a synopsis of the City’s overall financial performance on a year to date basis, the following financial reports are attached hereto:

 

Statement of Financial Activity

This report provides details of the City’s operating revenues and expenditures on a year to date basis, by nature and type (i.e. description). The report has been further extrapolated to include details of non-cash adjustments and capital revenues and expenditures, to identify the City’s net current position; which reconciles with that reflected in the associated Net Current Position report.

 

Net Current Position

This report provides details of the composition of the net current asset position on a full year basis, and reconciles with the net current position as per the Statement of Financial Activity.

 

Capital Acquisition Report

This report provides full year budget performance (by line item) in respect of the following capital expenditure activities: 

 

·   Land and Buildings

·   Plant and Equipment

·   Furniture and Equipment

·   Infrastructure

 

Reserve Movements Report

This report provides summary details of transfers to and from reserve funds, and associated interest earnings’ on reserve funds, on a full year basis.

 

Additional reports and/or charts are also provided as required to further supplement the information comprised within the statutory financial reports.


 

Comments on Financial Activity to 31 December 2019

The Statement of Financial Activity for the year to date as at 31 December 2019 shows an overall Net Current Position of $24.7M as opposed to the amended budget of $9.3M. The following summarises the major variances in accordance with Council’s adopted material variance reporting threshold that collectively make up the above difference:

 

Description

2019/20
Actual YTD

2019/20
Amended
Budget YTD

2019/20
Amended
Budget

2019/20
YTD Bud Variance

2019/20
YTD Bud Variance

 

$

$

$

%

$

Revenue from Ordinary Activities

 

1.     Operating Grants, Subsidies and Contributions

2,773,545

2,195,978

4,977,647

26.30%

577,567

 

 

 

 

 

 

2.    Non-Operating Grants, Subsidies and Contributions

2,183,887

4,106,042

23,804,690

(46.81%)

(1,922,155)

 

 

 

 

 

 

Capital Revenue & (Expenditure)

 

 

 

 

3.     Land & Buildings

(1,466,968)

(5,350,853)

(8,475,358)

72.58%

3,883,885

Plant & Equipment

(726,928)

(2,290,500)

(4,855,350)

68.26%

1,563,572

Furniture & Equipment

(125,824)

(540,028)

(1,113,069)

76.70%

414,204

Infrastructure

(7,137,403)

(14,765,161)

(36,813,923)

51.66%

7,627,758

4.     Proceeds from Sale of Assets

255,155

579,050

3,409,080

(55.94%)

(323,895)

5.     Transfer to Restricted Assets

(438,247)

(30,054)

(60,100)

(1,358.20%)

(408,193)

6.     Transfer from Restricted Assets

557,751

0

0

100%

557,751

7.     Transfer from Reserves

1,232,906

1,657,906

33,992,705

(25.63%)

(425,000)

 

Revenue from Ordinary Activities

Year to date (YTD) actual income from ordinary activities is $1.16M more than expected when compared to the YTD amended budget, with the following items meeting the material variance reporting threshold:

 

1.    Operating Grants, Subsidies and Contributions are $578K (net) better than amended budget. This variance is mainly due to the following:

·    Legal Fees Reimbursements (10500) ($40K) – budget item included for a fine that was received in the 18/19 financial year.  A budget amendment was processed to move a portion of the fine from retained earnings to a legal reserve, however a further budget amendment to remove this revenue item is still being investigated;

·    Human Resources Reimbursements (10521) $37K - $18K due to conference & training reimbursements not budgeted for sufficiently and $19K received in workers comp reimbursements with all receipts budgeted in June;

·    Contributions to Airport Operations (11151) $49K – received December but budgeted in June;

·    Environmental Management Administration (10830) $172K – grant received for the Revitalizing Geographe Waterways Phase 2 project earlier than forecast;

·    Preventative Services CLAG (10925) $30K – part of the operating grant received from Department of Health earlier than budgeted;

·    Protective burning and firebreaks reserve (10931) $166K. This variance relates to receiving 50% grant awarded to the City under the mitigation activity fund (Emergency Services Levy) and will be subject to a Council report requesting that the 2019/20 budget be amended to reflect this additional income.  Details of the cost codes for this amendment are being finalised;

·    Bushfire risk management planning (10942) DFES $86K. This variance relates to the payment of grant in full for the bushfire risk planning coordinator position within the City of Busselton. This represents a timing difference between budget allocations (over 12 months), and actual funds received;

·    Fire Prevention DFES (10940) $49K – this is due to a combination of receiving the quarterly ESL grant a month earlier than forecast ($90K over), and not receiving the prior period grant acquittal adjustment that was forecast in October ($41K under);

·    Pre-Primary Building & Surrounds (B1503) $30K – grant was budgeted to be received in June 2020, but was received in November 2019;

·    Regional Waste Management Administration (11301) ($32K) – annual budget of $63K spread over 12 months, but no contributions have actually been invoiced or received YTD;

·    Reimbursements Old Butter Factory (B1401 & B9610) $193K – timing difference due to difficulties in predicting when LGIS would process the claims.  Advice received in January that claims have been processed.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $2.04M or 4.94% less than expected when compared to the amended YTD budget.  No individual items exceed the variance reporting thresholds.

 

Non-Operating Grants, Subsidies and Contributions

2.    Non-Operating Grants, Subsidies and Contributions are less than budget by $1.9M with the main items impacting on the above result being the timing of the receipt of funding which is also offset with less than anticipated capital expenditure at this time.

 

Cost Code

Cost Code Description

Variance
YTD

Finance and Corporate Services

 

10239

Contributions - Community Facilities

(382,986)

Community and Commercial Services

 

C6099

Airport Development - Project Grant

477,978

Planning and Development Services

 

B1015

Hithergreen District Bushfire Brigade

(465,200)

B1024

Wilyabrup Bushfire Brigade

(178,300)

B9109

Hithergreen Building Renovations

(34,446)

Engineering and Works Services

 

C1512

Port Geographe Boat Ramp Renewal Works

(82,500)

C3113

Busselton Tennis Club - Infrastructure

80,000

C3168

Busselton Foreshore Jetty Precinct

(154,110)

C3186

Lou Weston Oval - Courts

(325,000)

F0019

College Avenue

72,000

S0035

Strelly Street / Barlee Street Roundabout

36,448

S0051

Causeway Road / Rosemary Drive Roundabout

(200,002)

S0064

Peel Terrace (Stanley Pl/Cammilleri St Intersection Upgrade)

(100,002)

S0069

Peel Terrace (Brown Street Intersection Upgrades)

(49,998)

S0071

Ludlow-Hithergreen Road Safety Improvements

(50,002)

S0072

Kaloorup Road - Reconstruct and Seal Shoulders

461,200

T0019

Wonnerup South Road - Reconstruct and Widening (narrow seal)

(312,270)

T0085

Yoongarillup Road - Reconstruct Intersection at Vasse H/Way

(105,000)

T0086

Yoongarillup Road - Reconstruct & Widen (Western Section)

(739,050)

Capital Expenditure

3.    As at 31 December 2019, there is a variance of 58.8% or $13.5M in total capital expenditure with YTD actual at $9.5M against the YTD amended budget of $22.3M.

 

The attachments to this report include detailed listings of all capital expenditure (project) items, however the main areas of variance are summarised as follows:

Cost Code

Cost Code Description

Variance
YTD

Land

(71,308)

10370

Busselton Cemetery

(71,308)

Buildings

 3,883,885

B9600

Old Vasse Lighthouse (budget amendment pending)

70,245

B9516

Busselton Library Upgrade

206,875

B9109

Hithergreen Building Renovations

34,446

B9407

Busselton Senior Citizens

501,462

B9511

ArtGeo Building (budget amendment pending)

(24,961)

B9517

GLC - Pool Relining (budget amendment pending)

25,002

B9556

NCC Upgrade

33,268

B9591

Performing Arts Convention Centre

36,553

B9596

GLC Building Improvements

155,990

B9604

Womens Change Facility Bovell

(48,330)

B9605

Energy Efficiency Initiatives (Various Buildings

66,972

B9606

King Street Toilets

33,333

B9610

Old Butter Factory

(46,529)

B9716 & B9717

Airport Terminals

2,878,642

B9808

Busselton Jetty Tourist Park Upgrade

48,024

Plant & Equipment

1,563,572

10000

Members of Council

40,000

10250

Information & Communication Technology Services

35,000

10910

Building Services

35,000

11101

Engineering Services Administration

40,000

11156

Airport Development Operations (budget amendment pending)

(142,088)

11402

Plant Purchases (P10) (budget amendment pending)

945,000

11403

Plant Purchases (P11) (budget amendment pending)

265,369

11404

Plant Purchases (P12) (budget amendment pending)

320,000

Furniture & Office Equipment

414,204

10250

Information & Communication Technology Services

308,370

10900

Cultural Planning

(59,572)

11156

Airport Development Operations

137,084

Infrastructure By Class

7,628,787

 

Roads

1,506,866

 

Bridges

124,000

 

Car Parks

586,539

 

Footpaths & Cycleways

283,339

 

Parks, Gardens & Reserves

4,265,774

 

Regional Airport & Industrial Park Infrastructure

31,664

 

Many of these items of under expenditure e.g. Main Roads construction works, also assists in explaining the above current YTD shortfall in Non-Operating Grants. In the main, many of these projects have yet to be completed and represent a timing difference.

 

Proceeds from Sale of Assets

4.    There is a variance for the proceeds from sale of assets of -$324K, due to timing in the changeover of vehicles.

 

Transfer to Restricted Assets

5.    There is a variance in transfers to restricted assets of $408K more than amended budget.   The reason for this is as follows:

·    Transfer to deposits and bonds of $44K as opposed to a budget of $0. These funds do not have a budget allocation as they are not able to be reliably measured;

·    Interest earned on government grants of $25K transferred to restricted cash, for which there was no budget allocated as it was expected that the grant would have been utilized by this stage;

·    Additional bonds of $321K were received in relation to the next stage of the Dunsborough Lakes development.

 

Transfer from Restricted Assets

6.    There is a variance in transfers from restricted assets of $558K more than amended budget.   The main reason for this is as follows:

·    Transfer from Roadwork Bonds of $519K as opposed to a budget of $0.  These funds do not have a budget allocation as they are not able to be reliably measured.

 

Transfer from Reserves

7.    There is a variance for transfer from reserves of $425K less than amended budget.   The reason for this is as follows:

·    Transfer from Jetty Maintenance Reserve of $425K did not occur due to works not being undertaken on cost code C3497 (part of the Parks, Gardens & Reserves variance shown above), for the following reasons:

i.  The previous expenditure figure was based on the 50 year plan.

ii. The 5 year structural review undertaken in 2019/2020 discovered that the Jetty was in better condition than forecast in the 50 year plan.  Capital works planned for 2020 have been deferred to 2030.

iii.               Requests for Tenders issued for maintenance works per the 5 year plan are to be awarded at the Council meeting on 29 January 2020.

iv.              As a result budget figures have been revised for next the 5 financial years to reflect the 5 year plan.

 

Investment Report

Pursuant to the Council’s Investment Policy, a report is to be provided to the Council on a monthly basis, detailing the investment portfolio in terms of performance and counterparty percentage exposure of total portfolio. The report is also to provide details of investment income earned against budget, whilst confirming compliance of the portfolio with legislative and policy limits.

 

As at 31 December 2019, the value of the City’s invested funds totalled $81.48M, down from $84.48M as at 30 November. The reduction is due to funds being transferred to the cheque account to meet ongoing normal operating costs.

 

During the month of November three term deposits totalling the amount of $4.5M matured. These were renewed for a further 162 days at 1.51% on average.

 

The balance of the 11am account (an intermediary account which offers immediate access to the funds compared to the term deposits and a higher rate of return compared to the cheque account) reduced by $3.0m with the funds being transferred to the cheque account to meet ongoing normal operating costs.

 

The balance of the Airport Development ANZ and WATC cash accounts remained steady.

 

The RBA announced no rate changes in December and January. Future movements are unknown at this time although further drops are possible in coming months.

 

Chief Executive Officer – Corporate Credit Card

Details of monthly (November to December) transactions made on the Chief Executive Officer’s corporate credit card are provided below to ensure there is appropriate oversight and awareness of credit card transactions made.

 

Date

$ Amount

Payee

Description

16-Dec-19

94.00

CHEEKY MONKEY BREWERY

+ CEO/MAYOR LUNCH WITH SHIRE OF AUG/MR

23-Dec-19

131.00

THE GOOD EGG CAFÉ

+ HOSPITALITY - CITY OF BUNBURY MEETING

23-Dec-19

3,585.18

CAVES HOUSE HOTEL

COUNCIL END OF YEAR FUNCTION

24-Dec-19

436.78

QANTAS

FLIGHTS - RCA BOARD MEETING (Mayor)

24-Dec-19

351.80

THE FIRESTATION

MAYORS LUNCHEON

27-Dec-19

426.99

VIRGIN AUSTRALIA

FLIGHTS - RCA BOARD MEETING (Mayor)

27-Dec-19

4.33

VIRGIN AUSTRALIA

BOOKING FEE

*Funds debited against CEO Annual Professional Development Allowance as per employment Contract Agreement

+ Allocated against CEO Hospitality Expenses Allowance

Statutory Environment

Section 6.4 of the Act and Regulation 34 of the Regulations detail the form and manner in which a local government is to prepare financial activity statements.

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

Financial Implications

Any financial implications are detailed within the context of this report.

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

Options

The Statements of Financial Activity are presented in accordance with Section 6.4 of the Act and Regulation 34 of the Regulations and are to be received. Council may wish to make additional resolutions as a result of having received these reports.

 

CONCLUSION

As at 31 December 2019, the City’s financial performance is considered satisfactory.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

 


Finance Committee

23

12 February 2020

6.2

Attachment a

Investment Report December 2019

 


Finance Committee

38

12 February 2020

6.2

Attachment b

Financial Activity Statement December 2019

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Finance Committee                                                             47                                                             12 February 2020

7.               General Discussion Items

7.1             NEW ACCOUNTING STANDARDS

Impact of Changes in Accounting Standards (AASB 15 and AASB 1058)

 

A change to the Australian Accounting Standards occurred on 1 July 2019. The impact of these changes will be implemented during the current financial year and apply to the presentation of the 2019-20 annual financial report. The two new accounting standards are:

 

·    AASB 15 Revenue from Contracts with Customers; and

·    AASB 1058 Income of Not-for-Profit Entities

 

Both new Standards relate to the timing and recognition of revenue and are applicable to local government. Implementing these new Standards will have an influence on day to day accounting processes and procedures as well as a significant impact on the City’s Statement of Financial Position (Balance sheet) going forward in the tens of millions of dollars.

 

The changes relate to when a local government is required to classify money received from customers and contributors as revenue in its accounts. In the context of AASB 15, customers are anyone transacting with the City to receive a benefit in a period subsequent to the transaction.  As a general rule, prior to their commencement money received from customers and contributors would be recognised as revenue when it was received. This is no longer the case, as the Standards require the City to assess the contractual performance obligations imbedded in these types of transactions and then match the revenue recognition with the timing of the satisfaction of these obligations.

 

There are a lot of circumstances were the City receives a contribution or enters into a contract with a customer, where the timing of the cash received is not aligned to the related performance obligations.

 

As an example, in the past when a contribution or a grant was received in advance for future works (such as a developer contribution), it would be recognised as revenue when the cash was received. Now, such a contribution will not appear in the budget/accounts as revenue on receipt, but will be held as a liability in the balance sheet until such time as the work is carried out. Only in the financial year when the work is undertaken will the money funding the activity be classified as revenue. In some circumstances, this may delay the timing of revenue recognition in the accounts by many years.

 

As part of the transition to the new rules, all qualifying past unspent grants, contributions and unperformed contracts must be established as liabilities (regardless that the cash received in the past is held in a cash reserve or as other restricted cash). For the City of Busselton, the extent of these identified unperformed past obligations is in the vicinity of $17m and this will require new liabilities to this amount on the statement of financial performance at 30th June 2020.  It is important to note, the relevant cash received in the past has not been spent but quarantined from past budgets in cash reserves or other restricted cash and is available to offset these new liabilities. As a consequence, there will be no adverse impact on the City’s financial position or rates.  

      

Implementation of processes and procedures to support the new rules adds administration and complexity around assessing, classifying, tracking and accounting for grant agreements, customer contracts and developer contribution schemes. External grants and contributions help the City provide community infrastructure and facilities but the cost of administration in managing and accounting for these important funding sources has now increased significantly with these changes.

 


 

The requirements imposed in these two new standards will have a wide-ranging impact across many accounts and various service areas, however one new requirement under AASB 1058 requires further explanation. The Standards brings in a new concept of volunteer labour being considered as non-cash revenue in certain circumstances.

 

The City has the option to consider all contributions of volunteers labour as non-cash revenue by establishing a new accounting policy or recognise individual volunteer contributions for activities where the City would have paid employees for the activity in the absence of volunteer assistance.  In both cases, the revenue and mirrored expenditure are non-cash items and have no impact on the City’s overall rate setting process.

 

It should be noted that the benefits of capturing and valuing all volunteer labour include:

 

·    Tracking all volunteer movements for safety, operational expediency and administrative compliance.  There is some isolated tracking currently in place, but no assessment of value to facilitate revenue and expense recognition and what needs to be disclosed in the annual statutory financial statements (which is extremely onerous);

·    Monitoring treatment of volunteers to ensure (and easily demonstrate), ethical and efficient management;

·    Accurate and reliable year-on-year comparatives, across the City; and

·    A transparent, positive note in the Annual Report.

 

These new Standards follow others relating to Leases (AASB 16) and Financial instruments (AASB 9) in changing the accounting rules. All the new standards are accompanied by an increased level and complexity of disclosure in the annual financial statements and will require changes to some existing practices and procedures.  The full extent and exact nature and scope of the administrative changes that will be required is currently being investigated.

 

  

 


 

7.2             LISTING OF PAYMENTS BY REGION AND INDUSTRY

                   Members held a general discussion of the spreadsheet ‘Listing of Payments Made Under Delegated Authority’ containing the list of payments broken down by region and industry provided to members prior to the meeting by Mr Sheridan.

                  

8.               Next Meeting Date

Wednesday, 11 March 2020

 

9.               Closure

The meeting closed at 11.33am.

 

 

 

THESE MINUTES CONSISTING OF PAGES 1 TO 47 WERE CONFIRMED AS A TRUE AND CORRECT RECORD ON Wednesday, 11 March 2020.

 

DATE:_______________________ PRESIDING MEMBER:____________________________