Audit warning for WDC

A $1.5 million difference in the Waitaki District Council's 2010-11 annual result has prompted a warning from Audit NZ about meeting the challenge of preparing a plan for the next 10 years.

Yesterday, the council formally adopted its 2010-11 annual report, later than usual because it was disrupted by other commitments, including getting a new computer system operating.

The council finished the year with a $451,000 deficit, after budgeting for a surplus of $1,067,000.

The $1.5 million difference between its budget and result came about because coastal protection work along Oamaru foreshore was judged by Audit NZ to be repairs and maintenance, rather than capital expenditure and was shifted to costs, a revaluation of property, less income from interest with falling interest rates and a one-off item for repairs from flooding in May last year.

Audit NZ warned that would provide a financial challenge for the council if the over-expenditure continued.

The challenge would be ensuring there was sufficient revenue and keeping rates affordable.

Chief executive Michael Ross said work was well under way on the 2012-22 long-term plan, but the council faced considerable challenges.

These included increased costs from insurance levies, a reduction in roading subsidies from the New Zealand Transport Agency and water upgrades to meet drinking water standards.

"These will drive increases even before we start to factor in the effects of inflation," he saidHowever, the council would always try to contains costs.

The council recorded total income for the 2010-11 financial year of $41 million, with $24.465 coming from rates.

Its total expenditure was $41.451 million, compared to budgeted spending of $39.173 million.

Average rates per property was $2044.

The council has no external debt, but internal debt (money it has borrowed from itself rather than investing outside) equates to $1243 per property.

The council's assets total $690 million.


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