2015-10-14 Audit & Risk Committee Meeting - Draft Annual Financial Statements

AUDIT & RISK COMMITTEE MEETING REPORT                                             14 OCTOBER 2015


2014/15 ANNUAL FINANCIAL STATEMENTS
DOCUMENT INFORM AT ION




Author                   Manager Financial Services, Wayne Jensen
                         Corporate Services Department

Index                    22.02 Financial Management / Audits

Attachments              1.   2014/15 Annual Financial Statements


EXECUTIVE SUMMARY
Draft financial statements were presented to the Audit & Risk Committee at the meeting held on
21 August 2015 prior to forwarding to Queensland Audit Office (QAO) for their audit process. QAO
have provided email advice that the Statements, as provided at Attachment 1 have Audit clearance
and no further changes are required.

RECOMMENDATION
That Council note the report by the Manager Financial Services to the Audit & Risk Committee and
approve the 2014/15 Annual Financial Statements (provided at Attachment 1 to the report) for
signature by the Mayor and Chief Executive Officer.


REPORT
Changes made to the final statements from the draft statements previously considered by the Audit
& Risk Committee at its meeting on 21 August 2015 are summarised below:

Statement of Comprehensive Income
1. Change in the recognition of Council’s Investment in Associate (Unitywater) from a Council
   position to a Consolidated position. This involved the elimination of dividend income and the
   recognition of our equity share of profit through participation rights, which resulted in a reduction
   in operating revenue, but an overall net increase in total revenue of $3,194,976.
2. Recalculation of Long Service Leave Provision – the base reporting data used to calculate the
   provision balance was configured incorrectly and overstated hourly rates by 13.1% which
   resulted in overstatement of the long service leave provision. Subsequent recalculation using
   corrected hourly rates arrived at a net decrease in operating expenditure of $593K.

Statement of Financial Position
3. Property Plant and Equipment total reduced by $341k to account for the change in disclosure
   of WIP for Intangible Assets. Now disclosed under Intangible Assets.
4. Intangible Assets increased by $341k to account for above mentioned change in disclosure.
5. Changes reflected to Equity Investments to account for disclosure change from Council only to
   Consolidated. Net increase of $3,194,976.

Notes to the Statements
6. Note 1 – Significant Accounting Policies – multiple changes as endorsed by Audit & Risk
   Committee on 21 August 2015, with the exception of Annual Leave and Trust notes being re-
   instated.
7. Note 9 – Cash assets and cash equivalents – detail has been added to identify externally and
   internally restricted cash (reserves).
8. Note 20 – Commitments for expenditure – detail has been added to the Contractual
   Commitments section.

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