While the Kiama Council posted a $7.7m loss for 2022-23, there are green shoots rising through the ledger, as this is a $2.4m improvement compared to last financial year.

Yet, serious issues remain with council spending more than it earns, a continuing failure to verify some of its assets and accurately track the movement of monies in previous financial years, according to its newly released annual financial statement.

Blue Haven Terralong and Bonaira posted a combined $2.54m loss for the financial year.

Some of the achievements were:

• Progress towards accurate and complete financial reporting on fixed assets. Ninety percent of the total Infrastructure, Property, and Equipment balance has been verified and audited (value $521m), and
• Restricted and allocated cash movements were verified, except for the opening balances (previously disclaimed) of the Domestic Waste and Crown Land Reserve balances.

“The improvement is due to a focus to improve operating performance and financial sustainability,” CEO Jane Stroud says.

“This drive will continue over the next few years, as Council seeks to reduce the loss position, produce a balanced budget and operating result, and meet the requirements of the NSW Government Performance Improvements Orders.”

“Our finance team has worked diligently to prepare these statements following on from the significant challenges of presenting the 2020-21 and 2021-22 statements.”

“That is a monumental achievement and one which finally gets Kiama Council back to real-time financial data, and a normal cycle of financial year end and audits,” Ms Stroud says.

The statement flagged Council was in negotiation with a potential buyer for Blue Haven Bonaira which was, “expected to be finalised by June 2024.”

Ms Stroud says no new issues were raised by auditors and some key matters from the previous audits had been progressed or cleared.

The Kiama Council building.

Even so, Independent Auditor Michael Kharzoo had reservations about the accuracy of some figures.

“The disclaimer of opinion on the financial statements for the year ended 30 June 2022 affected my ability to obtain sufficient appropriate audit evidence on the opening balances at 1 July 2022.” 

“This is a limitation on the scope of my audit as I was unable to obtain sufficient appropriate audit evidence to determine the impact on ‘Depreciation, amortisation and impairment’ in the Income Statements of the Declared Business Activities,” he wrote.

Mr Kharzoo could not assert the, “completeness, accuracy, valuation, existence or condition of the asset classes.”

Council stated it could not verify $56m of assets such as roads, land improvements, recreational assets and more, in the financial statements.

It also could not verify the movements of some balances for infrastructure, plant and equipment for the year ending 30 June 2023.

This lack of clarity on the council’s financial situation was why the Minister for Local Government, Wendy Tuckerman, issued an Performance Improvement Order in October 2022.

Minister Tuckerman was concerned about the council’s use of “funds other than the restricted purpose,” which may refer to council’s alleged access of resident’s deposits to build the $109m Blue Haven Bonaira facility.

The council statements can be found here.