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Mid Murray Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2019

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Page 1: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2019

Page 2: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

General Purpose Financial Statements for the year ended 30 June 2019

Contents

1. Council Certificate

2. Primary Financial Statements:

- Statement of Comprehensive Income- Statement of Financial Position- Statement of Changes in Equity- Statement of Cash Flows

3. Notes to the Financial Statements

4. Independent Auditor's Report - Financial Statements

5. Independent Auditor's Report - Internal Controls

6. Certificates of Audit Independence

- Council Certificate of Audit Independence- Audit Certificate of Audit Independence 49

Page

45

3

6

7

48

2

44

46

page 1

Page 3: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,
Page 4: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Statement of Comprehensive Income for the year ended 30 June 2019

$ '000

IncomeRates RevenuesStatutory ChargesUser ChargesGrants, Subsidies and ContributionsInvestment IncomeReimbursementsOther Income

Total Income

ExpensesEmployee CostsMaterials, Contracts & Other ExpensesDepreciation, Amortisation & ImpairmentFinance Costs

Total Expenses

Operating Surplus / (Deficit)

Asset Disposal & Fair Value AdjustmentsAmounts Received Specifically for New or Upgraded Assets

Net Surplus / (Deficit) 1

Other Comprehensive IncomeAmounts which will not be reclassified subsequently to operating resultChanges in Revaluation Surplus - I,PP&E

Total Other Comprehensive Income

Total Comprehensive Income

1 Transferred to Statement of Changes in Equity

2g 1,304

Notes

2a2b2c2g

2f

2019

3c

2e

3a9,910 3b

2d

404 1,095

6,931

6,354

2018

14,798 14,114

8,211 7,567

1,096

382

- 4,135

356

6,573

(420)

4,135

2,341

9a -

24,962

(420)

4

437

(159) (128)

25,153

583

22,391

(2,762)

488

582

554

23,397

9,881

961

8 17

(1,565)

3d

5,697

(1,794)

X3A0T

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 3

Page 5: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Statement of Financial Position as at 30 June 2019

$ '000

ASSETSCurrent AssetsCash and Cash EquivalentsTrade & Other ReceivablesInventoriesTotal Current Assets

Non-Current AssetsFinancial AssetsInfrastructure, Property, Plant & EquipmentTotal Non-Current Assets

TOTAL ASSETS

LIABILITIESCurrent LiabilitiesTrade & Other PayablesBorrowingsProvisionsTotal Current Liabilities

Non-Current LiabilitiesTrade & Other PayablesBorrowingsProvisionsTotal Non-Current Liabilities

TOTAL LIABILITIESNet Assets

EQUITYAccumulated SurplusAsset Revaluation ReservesOther Reserves

Total Council Equity

856 8a8b

189,372

5c

5a

189,422

192,766

3,344

175,841 1,693

2,169

4,905

188,616

192,693

188,737

9a

-

5,275 8c 1,836

8a

936 1,800

154,901

609 11,311

27

11,947

16,852 175,841

19,247

2019

3,956

121

2018

6a 50

3,043 413

500

264 2,822 5b

258

Notes

2,583

11,208

175,421

17,345

19,427

862 12,070

9b 1,093 154,901

175,421

7a

8b8c

X3A1T

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 4

Page 6: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Statement of Changes in Equity for the year ended 30 June 2019

AssetAccumulated Revaluation Other Total

$ '000 Notes Surplus Reserve Reserves Equity

2019Balance at the end of previous reporting period 19,247 154,901 1,693 175,841

a. Net Surplus / (Deficit) for Year (420) - - (420)

b. Transfers between Reserves 600 - (600) - Balance at the end of period 19,427 154,901 1,093 175,421

2018Balance at the end of previous reporting period 21,269 150,766 1,465 173,500

a. Net Surplus / (Deficit) for Year (1,794) - - (1,794)

b. Other Comprehensive Income- Gain (Loss) on Revaluation of I,PP&E 7a - 4,135 - 4,135 Other Comprehensive Income - 4,135 - 4,135

Total Comprehensive Income (1,794) 4,135 - 2,341

c. Transfers between Reserves (228) - 228 - Balance at the end of period 19,247 154,901 1,693 175,841

X4A0T

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 5

Page 7: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Statement of Cash Flows for the year ended 30 June 2019

$ '000

Cash Flows from Operating ActivitiesReceiptsOperating ReceiptsInvestment ReceiptsPaymentsOperating Payments to Suppliers and EmployeesFinance Payments

Net Cash provided by (or used in) Operating Activities

Cash Flows from Investing ActivitiesReceiptsAmounts Received Specifically for New/Upgraded AssetsSale of Replaced AssetsSale of Surplus AssetsRepayments of Loans by Community GroupsPaymentsExpenditure on Renewal/Replacement of AssetsExpenditure on New/Upgraded Assets

Net Cash provided by (or used in) Investing Activities

Cash Flows from Financing ActivitiesReceiptsProceeds from BorrowingsPaymentsRepayments of BorrowingsRepayment of Bonds & Deposits

Net Cash provided by (or used in) Financing Activities

Net Increase (Decrease) in Cash Held

plus: Cash & Cash Equivalents at beginning of period

Total Cash, Cash Equivalents & Investments

Notes 2019 2018

25,049 25,105 8 17

(18,026) (20,669)

1,304 1,096 38 223

(547) (465)

11b 6,484 3,988

61 444

(2,603) (3,882) (5,342) (4,996)

21 39

(6,521) (7,076)

753 3,850

(936) (884) (22) -

258 500

(205) 2,966

(242) (122)

11 500 622

X5A0T

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 6

Page 8: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Contents of the Notes accompanying the Financial Statements

Details

Significant Accounting PoliciesIncomeExpensesAsset Disposal & Fair Value AdjustmentsCurrent AssetsCash & Cash EquivalentsTrade & Other ReceivablesInventoriesNon-Current AssetsFinancial AssetsFixed AssetsInfrastructure, Property, Plant & EquipmentValuation of Infrastructure, Property, Plant & EquipmentLiabilitiesTrade & Other PayablesBorrowingsProvisionsReservesAsset Revaluation ReserveOther ReservesAssets Subject to RestrictionsReconciliation to Statement of CashflowsFunctionsComponents of FunctionsFinancial InstrumentsCommitments for ExpenditureFinancial IndicatorsUniform Presentation of FinancesOperating LeasesSuperannuationContingencies & Assets/Liabilities Not Recognised in the Balance SheetRelated Party Transactions

4119

Page

1

Note

7a

43

20

21

22

5a

8

6a

2 1619

21

1639

29

38

33

12a

1514

17

1312b

18

37

31

39

40

268c

8a

1011

26

269b 269a

2728

20 42

5b 215c 21

7b 23

258b

X6A0T

page 7

Page 9: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

_

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies

page 8

The principal accounting policies adopted by Council in the preparation of these consolidated financial statements are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

1 Basis of Preparation

1.1 Compliance with Australian Accounting Standards

This general purpose financial report has been prepared on a going concern basis using the historical cost convention in accordance with Australian Accounting Standards as they apply to not-for-profit entities, other authoritative pronouncements of the Australian Accounting Standards Board, Interpretations and relevant South Australian legislation.

The financial report was authorised for issue by certificate under regulation 14 of the Local Government (Financial Management) Regulations 2011 dated 26th November 2019.

1.2 Historical Cost Convention

Except as stated below, these financial statements have been prepared in accordance with the historical cost convention.

1.3 Critical Accounting Estimates

The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates and requires management to exercise its judgement in applying Council’s accounting policies.

Particular areas involving a high degree of judgement or complexity include the estimation of future payments and timing in relation to tip restoration. Further information in relation to the estimation of these liabilities are given in the relevant sections of these Notes.

1.4 Rounding

All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000).

2 The Local Government Reporting Entity

Mid Murray Council is incorporated under the South Australian Local Government Act 1999 and has its principal place of business at 49 Adelaide Road, Mannum SA. These financial statements include the Council’s direct operations and all entities through which Council controls resources to carry on its functions. In the process of reporting on the Council as a single unit, all transactions and balances between activity areas and controlled entities have been eliminated.

3 Income Recognition

Income is measured at the fair value of the consideration received or receivable. Income is recognised when the Council obtains control over the assets comprising the income, or when the amount due constitutes an enforceable debt, whichever first occurs.

Where grants, contributions and donations recognised as incomes during the reporting period were obtained on the condition that they be expended in a particular manner or used over a particular period, and those conditions were undischarged as at the reporting date, the amounts subject to those undischarged conditions are disclosed in these notes. Also disclosed is the amount of grants, contributions and receivables recognised as incomes in a previous reporting period which were obtained in respect of the Council's operations for the current reporting period.

In recent years the payment of untied financial assistance grants has varied from the annual allocation as shown in the table below:

Financial Assistance Grants Cash

Payment Received

Annual Allocation Difference

2016/17 $5,968,000 $3,714,000 +$2,254,000 2017/18 $3,378,801 $3,684,000 -$305,199 2018/19 $3,959,604 $3,829,002 +$114,598

Supplementary Local Roads Grants Cash

Payment Received

Annual Allocation Difference

2018/19 $982,389 $327,466 +$654,923

Page 10: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

_

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

page 9

Because these grants are untied, the Australian Accounting Standards require that payments be recognised upon receipt. Accordingly, the operating results of these periods have been distorted compared to those that would have been reported had the grants been paid in the year to which they were allocated.

The Operating Surplus Ratio disclosed in Note 15 has also been calculated after adjusting for the distortions resulting from the differences between the actual grants received and the grants entitlements allocated.

4 Cash, Cash Equivalents and other Financial Instruments

Cash Assets include all amounts readily convertible to cash on hand at Council’s option with an insignificant risk of changes in value with a maturity of three months or less from the date of acquisition.

Receivables for rates and annual charges are secured over the subject land, and bear interest at rates determined in accordance with the Local Government Act 1999. Other receivables are generally unsecured and do not bear interest.

All receivables are reviewed as at the reporting date and adequate allowance made for amounts the receipt of which is considered doubtful.

All financial instruments are recognised at fair value at the date of recognition. A detailed statement of the accounting policies applied to financial instruments forms part of Note 13.

5 Inventories

Inventories held in respect of stores have been valued by using the weighted average cost on a continual basis, after adjustment for loss of service potential. Inventories held in respect of business undertakings have been valued at the lower of cost and net realisable value.

5.1 Real Estate Assets Developments

Real Estate Assets developments have been classified as Inventory in accordance with AASB 102 and are valued at the lower of cost or net realisable value. Cost includes the costs of acquisition, development, borrowing and other costs incurred on

financing of that acquisition and up to the time of sale. Any amount by which cost exceeds the net realisable value has been recognised as an expense.

Revenues arising from the sale of property are recognised in the operating statement when settlement is completed.

Properties not acquired for development, but which Council has decided to sell as surplus to requirements, are recognised at the carrying value at the time of that decision.

5.2 Other Real Estate Held for Resale

Properties not acquired for development, but which Council has decided to sell as surplus to requirements, are recognised at the carrying value at the time of that decision.

Certain properties, auctioned for non-payment of rates in accordance with the Local Government Act but which failed to meet the reserve set by Council and are available for sale by private treaty, are recorded at the lower of the unpaid rates and charges at the time of auction or the reserve set by Council. Holding costs in relation to these properties are recognised as an expense when incurred.

6 Infrastructure, Property, Plant & Equipment

6.1 Initial Recognition

All assets are initially recognised at cost. For assets acquired at no cost or for nominal consideration, cost is determined as fair value at the date of acquisition.

All non-current assets purchased or constructed are capitalised as the expenditure is incurred and depreciated as soon as the asset is held “ready for use”. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition, including architects' fees and engineering design fees and all other costs incurred. 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 overhead.

Page 11: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

_

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

page 10

6.2 Materiality

Assets with an economic life in excess of one year are only capitalised where the cost of acquisition exceeds materiality thresholds established by Council for each type of asset. In determining (and in annually reviewing) such thresholds, regard is had to the nature of the asset and its estimated service life. Examples of capitalisation thresholds applied during the year are given below. No capitalisation threshold is applied to the acquisition of land or interests in land.

Buildings & Structures $15,000 Infrastructure $10,000 Major Plant & Equipment $15,000 Minor Plant $5,000 IT Equipment $3,000 Furniture & Fittings $5,000 Heritage Tourism Assets $10,000

6.3 Subsequent Recognition

All material asset classes are revalued on a regular basis such that the carrying values are not materially different from fair value. Significant uncertainties exist in the estimation of fair value of a number of asset classes including land, buildings and associated structures and infrastructure. Further detail of these uncertainties, and of existing valuations, methods and valuers are provided at Note 7.

6.4 Depreciation of Non-Current Assets

Other than land, all infrastructure, property, plant and equipment assets recognised are systematically depreciated over their useful lives on a straight-line basis which, in the opinion of Council, best reflects the consumption of the service potential embodied in those assets.

Depreciation methods, useful lives and residual values of classes of assets are reviewed annually.

Major depreciation periods for each class of asset are listed below. Depreciation periods for infrastructure assets have been estimated based on the best information available to Council, but appropriate records covering the entire life cycle of these assets are not available, and extreme care should be used in interpreting financial information based on these estimates.

Infrastructure Bridges & Major Culverts 50 to 66 years Landfill Cells 10 years Effluent Drainage 5 to 100 years Footpaths 26 to 87 years Kerbs 67 to 70 years Recreation Open Space 5 to 100 years Roads 18 to 75 years Roads Earthworks 500 years Stormwater Drainage 50 to 88 years Street Furniture 5 to 30 years Water Supply 5 to 100 years Plant & Equipment Major Plant & Equipment 5 to 25 years Minor Plant 2 to 15 years IT Equipment 2 to 15 years

Buildings & Structures 15 to100 years Furniture & Fittings 2 to 20 years Heritage Tourism Assets 50 years

6.5 Impairment

Assets whose future economic benefits are not dependent on the ability to generate cash flows, and where the future economic benefits would be replaced if Council were deprived thereof, are not subject to impairment testing.

Other assets that are subject to depreciation 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 (which is the higher of the present value of future cash inflows or value in use).

Where an asset that has been revalued is subsequently impaired, the impairment is first offset against such amount as stands to the credit of that class of assets in Asset Revaluation Reserve, any excess being recognised as an expense.

6.6 Borrowing Costs

Borrowing costs in relation to qualifying assets (net of offsetting investment revenue) have been capitalised in accordance with AASB 123 “Borrowing Costs”. The amounts of borrowing costs recognised as an expense or as part of the carrying amount of qualifying assets are disclosed in Note 3, and the amount (if any) of interest revenue offset against borrowing costs in Note 2.

Page 12: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

_

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

page 11

7 Investment property

Council does not currently have any Investment property.

8 Payables

8.1 Goods & Services

Creditors are amounts due to external parties for the supply of goods and services and are recognised as liabilities when the goods and services are received. Creditors are normally paid 30 days after the month of invoice. No interest is payable on these amounts.

8.2 Payments Received in Advance & Deposits

Amounts other than grants received from external parties in advance of service delivery, and security deposits held against possible damage to Council assets, are recognised as liabilities until the service is delivered or damage reinstated, or the amount is refunded as the case may be.

9 Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred and are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method.

Borrowings are carried at their principal amounts which represent the present value of future cash flows associated with servicing the debt. Interest is accrued over the period to which it relates, and is recorded as part of “Payables”.

10 Employee Benefits

10.1 Salaries, Wages & Compensated Absences

Liabilities for employees’ entitlements to salaries, wages and compensated absences expected to be paid or settled within 12 months of reporting date are accrued at nominal amounts (including payroll based oncosts) measured in accordance with AASB 119.

Liabilities for employee benefits not expected to be paid or settled within 12 months are measured as the present value of the estimated future cash outflows

(including payroll based oncosts) to be made in respect of services provided by employees up to the reporting date. Present values are calculated using government guaranteed securities rates with similar maturity terms.

No accrual is made for sick leave as Council experience indicates that, on average, sick leave taken in each reporting period is less than the entitlement accruing in that period, and this experience is expected to recur in future reporting periods. Council does not make payment for untaken sick leave.

10.2 Superannuation

The Council makes employer superannuation contributions in respect of its employees to various funds under the “choice of fund” legislation. The majority of employees are members of the Statewide Superannuation Scheme. This Scheme has two types of membership, each of which is funded differently.

No changes in accounting policy have occurred during either the current or previous reporting periods. Details of the accounting policies applied and Council’s involvement with the schemes are reported in Note 18.

11 Provisions for Reinstatement, Restoration and Rehabilitation

Close down and restoration costs include the dismantling and demolition of infrastructure and the removal of residual materials and remediation and rehabilitation of disturbed areas. Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbance occurs and are carried at the net present value of estimated future costs.

Although estimated future costs are based on a closure plan, such plans are based on current environmental requirements which may change. Council’s policy to maximise recycling is extending the operational life of these facilities, and significant uncertainty exists in the estimation of the future closure date.

Page 13: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

_

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

page 12

12 Leases

Lease arrangements have been accounted for in accordance with Australian Accounting Standard AASB 117.

In respect of finance leases, where Council substantially carries all of the risks incident to ownership, the leased items are initially recognised as assets and liabilities equal in amount to the present value of the minimum lease payments. The assets are disclosed within the appropriate asset class and are amortised to expense over the period during which the Council is expected to benefit from the use of the leased assets. Lease payments are allocated between interest expense and reduction of the lease liability, according to the interest rate implicit in the lease.

In respect of operating leases, where the lessor substantially retains all of the risks and benefits incident to ownership of the leased items, lease payments are charged to expense over the lease term.

13 Construction Contracts

Construction works undertaken by Council for third parties are generally on an agency basis where the third party reimburses Council for actual costs incurred, and usually do not extend beyond the reporting period. As there is no profit component, such works are treated as 100% completed. Reimbursements not received are recognised as receivables and reimbursements received in advance are recognised as “payments received in advance”.

For works undertaken on a fixed price contract basis, revenues and expenses are recognised on a percentage of completion basis. Costs incurred in advance of a future claimed entitlement are classified as work in progress in inventory. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

14 Equity Accounted Council Businesses

Council currently do not have cooperative arrangements with other Councils for the provision of services and facilities.

15 GST Implications

In accordance with UIG Abstract 1031 “Accounting for the Goods & Services Tax”

Receivables and Creditors include GSTreceivable and payable.

Except in relation to input taxed activities,revenues and operating expenditures excludeGST receivable and payable.

Non-current assets and capital expendituresinclude GST net of any recoupment.

Amounts included in the Statement of CashFlows are disclosed on a gross basis.

16 New accounting standards and UIG interpretations

In the current year, Council adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for the current reporting period. The adoption of the new and revised Standards and Interpretations has not resulted in any material changes to Council's accounting policies.

Mid Murray Council has not applied any Australian Accounting Standards and Interpretations that have been issued but are not yet effective.

AASB 7 Financial Instruments - Disclosures and AASB 9 Financial Instruments commenced from 1 July 2018 and have the effect that non-contractual receivables (e.g. rates & charges) are now treated as financial instruments. Although the disclosures made in Note 13 Financial Instruments have changed, there are no changes to the amounts disclosed.

AASB 15 Revenue from Contracts with Customers and AASB 1058 Income of Not-for-Profit Entities, which will commence from 1 July 2019, affect the timing with which revenues, particularly special purpose grants, are recognised. Amounts received in relation to contracts with sufficiently specific performance obligations will in future only be recognised as these obligations are fulfilled. In these Statements, the sum of $982,000 has been recognised as revenue, in accordance with the current Standards, but would in future be recorded

Page 14: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

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Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

page 13

as a liability "Amounts in Advance" until the performance obligations have been fulfilled.

AASB 16 Leases, which will commence from 1 July 2019, requires that the right of use conveyed by leasing contracts - except leases with a maximum term of 12 months and leases for non-material amounts - be recognised as a form of Infrastructure, Property, Plant and Equipment, and that the lease liability be disclosed as a liability.

As a result of the new accounting procedure, the following changes will be made to balance sheet amounts as at 1 July 2019:

Note Line Item Change

IPP&E Right-of-Use Asset + $50,755 Lease Liability + $50,755

The effect on profit and loss in future years will be non-material.

Some Australian Accounting Standards and Interpretations have been issued but are not yet effective. Those standards have not been applied in these financial statements. Council will implement them when they are effective.

The standards that are expected to have a material impact upon Council's future financial statements are:

Effective for annual reporting periods beginning on or after 1 July 2019

AASB 15 Revenue from Contracts withCustomers, AASB 1058 Income of Not-for-ProfitEntities and AASB 2016-8 Amendments toAustralian Accounting Standards - AustralianImplementation Guidance for Not-for-ProfitEntities.

AASB 1058 clarifies and simplifies the incomerecognition requirements that apply to not-to-profit (NFP) entities, in conjunction with AASB15, and AASB 2016-8. These Standardssupersede the majority of income recognitionrequirements relating to public sector NFPentities, previously in AASB 1004 Contributions.

Identifiable impacts at the date of this report are:

Some grants received by the Council will be recognised as a liability, and subsequently recognised progressively as revenue as the Council satisfies its performance obligations under the grant. At present, such grants are recognised as revenue upfront.

Grants that are not enforceable and/or not sufficiently specific will not qualify for deferral, and continue to be recognised as revenue as soon as they are controlled. Council receives several grants from the Federal Government and State Government for which there are no sufficiently specific performance obligations these are expected to continue being recognised as revenue upfront assuming no change to the current grant arrangements.

Depending on the respective contractual terms, the new requirements of AASB 15 may potentially result in a change to the timing of revenue from sales of the Council's goods and services such that some revenue may need to be deferred to a later reporting period to the extent that the Council has received payment but has not met its associated performance obligations (such amounts would be reported as a liability in the meantime).

Prepaid rates will not be recognised as revenue until the relevant rating period starts. Until that time these receipts will be recognised as a liability (unearned revenue). There will be no impact upon the recognition of other fees and charges.

Based on Councils assessment, if Council had adopted the new standards in the current financial year it would have had the following impacts:

- Revenue decrease of $982,000 due to deferral of grant funding, pre-paid rates, and other sales related revenue (based on the facts available to Council at the date of assessment).

- There would be an equal reduction in the reported equity as the reduced revenue will require an increase in recognition of contract liabilities, and statutory receivables.

- Net result would be lower on initial application as a result of decreased revenue. A range of

Page 15: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

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Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

page 14

new disclosures will also be required by the new standards in respect of the council's revenue.

Transition method

The Council intends to apply AASB 15, AASB 1058 and AASB 2016-8 initially on 1 July 2019, using the modified retrospective approach.

The Council intends to apply the practical expedients available for the full retrospective method. Where revenue has been recognised in full under AASB 1004, prior to 1 July 2019, but where AASB 1058 would have required income to be recognised beyond that date, no adjustment is required. Further, Council is not required to restate income for completed contracts that start and complete within a financial year. This means where income under AASB 1004 was recognised in the comparative financial year (i.e. 2018/19), these also do not require restatement.

The following list identifies all the new and amended Australian Accounting Standards, and Interpretation, that were issued but not yet effective at the time of compiling these illustrative statements.

The standards are expected to have a material impact upon Council's future financial statements are:

Effective for annual reporting periods beginning on or after 1 January 2019

AASB 15 Revenue from Contracts withCustomers

AASB 1058 Income of Not-for-Profit Entities

AASB 1058 Income of Not-for-Profit EntitiesAppendix D)

The standards are not expected to have a material impact upon Council's future financial statements are:

Effective for annual reporting periods beginning on or after 1 January 2019

AASB 16 Leases

AASB 16 Leases (Appendix D)

AASB 1059 Service Concession Arrangements:Grantors

AASB 1059 Service Concession Arrangements:Grantors (Appendix D)

AASB 2016-8 Amendments to AustralianAccounting Standards - AustralianImplementation Guidance for Not-for-ProfitEntities

AASB 2017-1 Amendments to AustralianAccounting Standards - Transfers of InvestmentProperty, Annual Improvements 2014-2016Cycle and Other Amendments

AASB 2017-4 Amendments to AustralianAccounting Standards – Uncertainty over IncomeTax Treatments

AASB 2017-6 Amendments to AustralianAccounting Standards – Prepayment Featureswith Negative Compensation

AASB 2017-7 Amendments to AustralianAccounting Standards – Long-term Interests inAssociates and Joint Ventures

AASB 2018-1 Amendments to AustralianAccounting Standards – Annual Improvements2015–2017 Cycle

AASB 2018-2 Amendments to AustralianAccounting Standards – Plan Amendment,Curtailment or Settlement

AASB 2018-3 Amendments to AustralianAccounting Standards – Reduced DisclosureRequirements

AASB 2018-4 Amendments to AustralianAccounting Standards – AustralianImplementation Guidance for Not-for-ProfitPublic Sector Licensors

AASB 2018-5 Amendments to AustralianAccounting Standards - Deferral of AASB 1059

Page 16: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

_

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

page 15

Effective for annual reporting periods beginning on or after 1 January 2021

AASB 17 Insurance Contracts

AASB 17 Insurance Contracts (Appendix D)

17 Comparative Figures

To ensure comparability with the current reporting period’s figures, some comparative period line items and amounts may have been reclassified or individually reported for the first time within these financial statements and/or the notes.

18 Disclaimer

Nothing contained within these statements may be taken to be an admission of any liability to any person under any circumstance.

Page 17: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 2. Income

$ '000

(a). Rates Revenues

General RatesGeneral RatesLess: Mandatory RebatesLess: Discretionary Rebates, Remissions & Write OffsTotal General Rates

Other Rates (Including Service Charges)Natural Resource Management LevyWater SupplyCommunity Wastewater Management SystemsSeparate & Special RatesTV TransmissionWaste RecyclingTotal Other Rates

Other ChargesPenalties for Late PaymentLegal & Other Costs RecoveredTotal Other ChargesTotal Rates Revenues

(b). Statutory Charges

Building FeesTown Planning FeesHealth & Septic Tank Inspection FeesAnimal Registration Fees & FinesOther Licences, Fees & FinesTotal Statutory Charges

(c). User Charges

Cemetery FeesHall & Equipment HireProperty LeaseSundryCaravan Park RevenueMannum Dock & Morgan MuseumMannum Leisure CentreWaste Management FeesOtherTotal User Charges

171 27

37 37 97

1,095 961

143

15 7

(65)

12,550

404

14,114

183 81

105

16 71

437

31

226 221

2018Notes

(156) (163)

12,332

540

13,265

2019

(62)

57 55 755 798

135

1,647

1 134

14 20 19

13,037

544

145 14,798

1,616

141 4

72

14

23 71

28 39

33

360 299 45 56

242 285

275

48

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Page 18: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 2. Income (continued)

$ '000

(d). Investment Income

Interest on Investments - Local Government Finance Authority - Banks & OtherTotal Investment Income

(e). Reimbursements

Private WorksExpense PaymentsTotal Reimbursements

(f). Other Income

Insurance & Other RecoupmentsRebates & Bonus ReceivedDonationsOtherTotal Other Income

(g). Grants, Subsidies, Contributions

Amounts Received Specifically for New or Upgraded AssetsTotal Amounts Received Specifically for New or Upgraded AssetsOther Grants, Subsidies and ContributionsUntied - Financial Assistance GrantRoads to RecoveryLibrary and CommunicationsTotal Other Grants, Subsidies and ContributionsTotal Grants, Subsidies, ContributionsThe functions to which these grants relate are shown in Note 12.

(i) Sources of GrantsCommonwealth GovernmentState GovernmentOtherTotal

5,697

989 23 20

6,354

427 4,942 3,379

1,304 1,096

8 17

6 -

Notes 2019 2018

5

- 14

2 3

7,658 6,793

583

7,658

195 59

202 58

285

1,760 1,477 5,703 5,257

962

1,304

6,793

7

39 186

375 577

1,096

356

382 582

37 57 75

1,309

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Page 19: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 2. Income (continued)

$ '000

(h). Conditions over Grants & Contributions

Grants and contributions which were obtained on the condition that theybe expended for specified purposes or in a future period, but which arenot yet expended in accordance with those conditions, are as follows:

Unexpended at the close of the previous reporting period

Less:Expended during the current period from revenuesrecognised in previous reporting periodsRoads InfrastructureFederal Infrastructure ProjectsState Infrastructure ProjectsHeritage & Cultural ServicesHealthy CommunitiesSubtotal

Plus:Amounts recognised as revenues in this reportingperiod but not yet expended in accordance with the conditionsRoads InfrastructureFederal Infrastructure ProjectsState Infrastructure ProjectsOtherSubtotal

Unexpended at the close of this reporting period

Net increase (decrease) in assets subject to conditionsin the current reporting period

79

(61) (42)

771

(4)

982 1,087

(840) (122)

386 -

735 438

(105) 316

- 52

218 345

Notes 2019 2018

(225) -

(80)

1,087

93

(280) - (270) -

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Page 20: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 3. Expenses

$ '000

(a). Employee Costs

Salaries and WagesEmployee Leave ExpenseSuperannuation - Defined Contribution Plan ContributionsSuperannuation - Defined Benefit Plan ContributionsWorkers' Compensation InsuranceLess: Capitalised and Distributed CostsTotal Operating Employee Costs

Total Number of Employees (full time equivalent at end of reporting period)

(b). Materials, Contracts and Other Expenses

(i) Prescribed ExpensesAuditor's Remuneration - Auditing the Financial ReportsBad and Doubtful DebtsElected Members' ExpensesSubtotal - Prescribed Expenses

(ii) Other Materials, Contracts and ExpensesContractorsEnergyMaintenanceLegal ExpensesNatural Resources Levy (NRM)Other Government LeviesParts, Accessories & Other MaterialsProfessional ServicesSundryFuel & OilsInsurancesRubbish Collection ContractorTelephoneVehicle Registration & TPIWater & SewerDonations & ContributionsWaste ServicesFreightComputer Hardware, Software & SupportLess: Capitalised and Distributed CostsSubtotal - Other Material, Contracts & Expenses

Total Materials, Contracts and Other Expenses 9,910

854 601 200 207 136

789 357

536

108 120

324 265

18

(7,361) (8,482)

(393) (385)

695 798

210

6,753 8,266

170 545

426 396

426

552

91 224

243 282

256

2,430

9,616 9,586

37 141

3,909

790 63

14

7,567

18

694 365

209 330

132

309 253

667 694

390

8 7 (2)

7,047

532 537 64

9,881

8,211

102

179 541

94

Notes 2019 2018

403 7,206

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Page 21: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 3. Expenses (continued)

$ '000

(c). Depreciation, Amortisation and Impairment

(i) Depreciation and AmortisationBuildings & Other StructuresInfrastructure- Roads- Road Earthworks- Bridges- Footpaths- Kerbing- Stormwater Drainage- Open Space Parks & Gardens- Water Licences & Supply- Effluent Drainage- Capping and ReinstatementPlant & EquipmentFurniture & FittingsHeritage Tourism AssetsTotal Depreciation, Amortisation and Impairment

(d). Finance Costs

Interest on Overdraft and Short-Term DrawdownInterest on LoansTotal Finance Costs

Note 4. Asset Disposal & Fair Value Adjustments

Infrastructure, Property, Plant & Equipment

(i) Assets Renewed or Directly ReplacedProceeds from DisposalLess: Carrying Amount of Assets SoldGain (Loss) on Disposal

(ii) Assets Surplus to RequirementsProceeds from DisposalLess: Carrying Amount of Assets SoldGain (Loss) on Disposal

Net Gain (Loss) on Disposal or Revaluation of Assets

6,931 8

419

(154) (84)

8

(267)

223 38

249

6,573

554 239 554 488

-

97 -

734 835

444 (105) (711)

(116) 139

61

(44)

285 298

1,114 1,041

86 86

413 98 410

8 8

80

250 250 122

(159) (128)

Notes 2019 2018

3,250 3,260

71 68 81

124

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Page 22: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 5. Current Assets

$ '000

(a). Cash & Cash Equivalents

Cash on Hand at BankDeposits at CallTotal Cash & Cash Equivalents

(b). Trade & Other Receivables

Rates - General & OtherAccrued RevenuesDebtors - GeneralOther Levels of GovernmentGST RecoupmentPrepaymentsLoans to Community OrganisationsSubtotal

Less: Allowance for Doubtful DebtsTotal Trade & Other Receivables

(c). Inventories

Stores & MaterialsTrading StockTotal Inventories

Note 6. Non-Current Assets

(a). Financial Assets

ReceivablesLoans to Community OrganisationsOther DebtorsTotal ReceivablesTotal Financial Assets

Notes 2019 2018

(9) 110

258 500

5 1

267 390

2,039 1,977

221 192 145 182

428 518 - 179

2,822 3,043

2,863 3,082 25 33

(41) (39)

225 376 39 37

- 58

264 413

50

50 63

50 121 121

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Page 23: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 7a. Infrastructure, Property, Plant & Equipment

Fair Value At At Carrying At At Carrying

$ '000 Level Fair Value Cost Dep'n Value Fair Value Cost Dep'n Value

Capital Work in Progress 3 - 4,433 - 4,433 - - - - (710) - - - 3,723 - 3,723 Land 2 6,201 348 122 6,427 42 - (104) - - (185) - 6,097 83 - 6,180 Land 3 18,334 - - 18,334 - - - - - - - 18,334 - - 18,334 Buildings & Other Structures 2 5,215 35 4,722 528 1,233 862 - (91) 322 1 - 5,427 2,247 4,819 2,855 Buildings & Other Structures 3 42,618 2,374 21,782 23,210 458 - - (1,023) - (1) - 43,076 2,373 22,805 22,644 Infrastructure - Roads 3 85,208 4,895 42,435 47,668 1,460 1,333 (140) (3,250) 1,170 2 - 84,405 8,345 44,507 48,243 - Road Earthworks 3 48,593 32 - 48,625 - - - (97) - (1) - 48,593 31 97 48,527 - Bridges 3 5,162 - 2,610 2,552 292 - - (86) (292) - - 5,162 - 2,696 2,466 - Footpaths 3 2,126 591 929 1,788 219 - - (71) - 1 - 2,126 810 999 1,937 - Kerbing 3 5,390 297 2,978 2,709 - - - (81) - - - 5,390 297 3,059 2,628 - Stormwater Drainage 3 10,239 354 4,162 6,431 52 - - (124) - (1) - 10,239 405 4,286 6,358 - Structures 3 6 - 6 - - - - - - - - - - - - - Open Space Parks & Gardens 3 8,927 198 3,960 5,165 383 - - (250) (160) 1 - 8,927 422 4,210 5,139 - Water Licences & Supply 3 345 - 80 265 - - - (8) - - - 345 - 88 257 - Effluent Drainage 3 19,863 15 6,353 13,525 - - - (410) - (1) - 19,863 15 6,764 13,114 - Capping and Reinstatement 3 996 - 502 494 587 - - (413) 190 185 - 2,079 - 1,036 1,043 Plant & Equipment 3 - 10,843 5,739 5,104 70 281 (14) (734) - - - - 11,041 6,334 4,707 Furniture & Fittings 3 - 3,736 2,744 992 512 - - (285) (411) (2) - - 3,837 3,031 806 Heritage Tourism Assets 3 - 383 17 366 34 128 - (8) (109) - - - 436 25 411 Total Infrastructure, Property,Plant & Equipment

Comparatives 253,934 22,360 93,925 182,369 4,996 3,886 (795) (6,573) - 599 4,135 259,223 28,534 99,141 188,616

189,372 104,756 34,065 259,223 28,534 260,063 (6,931) - (1)

New / Upgrade Renewals

-

Asset Movements during the Reporting Periodas at 30/6/2019

Depreciation Expense (Note

3c)

WDVof Asset

Disposals

WIPTransfers

Adjustments& Transfers

99,141

Revaluation Incrementsto Equity (ARR)

(Note 9)Acc.Acc.

as at 30/6/2018

188,616 5,342 (258) 2,604

Asset Additions

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Page 24: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 7b. Valuation of Infrastructure, Property, Plant & Equipment &Investment Property

$ '000

Valuation of Assets

The fair value of assets and liabilities must be estimated in accordance with various Accounting Standards for eitherrecognition and measurement requirements or for disclosure purposes.

AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a "level"in the fair value hierarchy as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Refer to Note 7a for the disclosure of the Fair Value Levels of Infrastructure, Property, Plant and Equipment Assets.

Information on ValuationsCertain land, and the buildings and structures thereon, are shown above as being based on fair value hierarchylevel 2 valuation inputs. They are based on prices for similar assets in an active market, with directly or indirectlyobservable adjustments for specific advantages or disadvantages attaching to the particular asset.

Valuations of Crown land, community land and land subject to other restrictions on use or disposal, shown above as being based on fair value hierarchy level 3 valuation inputs, are based on prices for similar assets in an active market, but include adjustments for specific advantages or disadvantages attaching to the particular asset that are not directly or indirectly observable in that market, or the number and / or amount of observable adjustments of which are so great that the valuation is more fairly described as being based on level 3 valuation inputs.

There is no known market for buildings, infrastructure and other assets. These assets are valued at depreciatedcurrent replacement cost. This method involves:

- The determination of the cost to construct the asset (or its modern engineering equivalent) using current prices for materials and labour, the quantities of each being estimated based on recent experience of this or similar Councils, or on industry construction guides where these are more appropriate.

- The calculation of the depreciation that would have accumulated since original construction using current estimates of residual value and useful life under the prime cost depreciation method adopted by Council.

This method has significant inherent uncertainties, relying on estimates of quantities of materials and labour, residual values and useful lives, and the possibility of changes in prices for materials and labour, and the potential for development of more efficient construction techniques.

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Page 25: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 7b. Valuation of Infrastructure, Property, Plant & Equipment &Investment Property (continued)

$ '000

Valuation of Assets (continued)

Other InformationAt 1 July 2004 upon the transition to AIFRS, Council elected pursuant to AASB 1.D5 to retain a previously establisheddeemed cost under GAAP as its deemed cost. With subsequent addition at cost, this remains as the basis ofrecognition of non-material asset classes.

Upon revaluation, the current new replacement cost and accumulated depreciation are re

stated such that the difference represents the fair value of the asset determined in accordance with AASB 13 Fair Value Measurement: accumulated depreciation is taken to be the difference between current new replacement cost and fair value. In the case of land, current replacement cost is taken to be the fair value.

Highest and best useAll of Council's non financial assets are considered as being utilised for their highest and best use.

Transition to AASB 13 - Fair Value MeasurementThe requirements of AASB 13 Fair Value Measurement have been applied to all valuations undertaken since 1 July 2013 as shown by the valuation dates by individual asset classes below.

Land - Basis of valuation: Fair Value / Market Value - Date of valuation: 30 June 2015 - Valuer: Maloney Field Services Pty Ltd

Land Improvements - Basis of valuation: Recognised at Cost

Buildings & Other Structuress - Basis of valuation: Fair Value / Market Value - Date of valuation: 30 June 2015 - Valuer: Maloney Field Services Pty Ltd

Mid Murray Council have identified assets which are required to be valued under a market approach, in accordance with AASB 13 - Fair Value Measurement. The assets were subsequently valued by Maloney Field Services as at 30 June 2015. The balance of the assets were valued at Depreciated Replacement Cost.

InfrastructureRoads - Basis of valuation: Replacement Cost. Additons at cost. - Date of valuation: 1 July 2016. - Valuer: Council valuation using unit rates

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Page 26: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 7b. Valuation of Infrastructure, Property, Plant & Equipment &Investment Property (continued)

$ '000

Valuation of Assets (continued)

Infrastructure (continued)Effluent Drainage - Basis of valuation: Written Down Replacement Cost. Additons at cost. - Date of valuation: 1 July 2017. - Valuer: Gayler Professional Engineering

Stormwater Drainage - Basis of valuation: Written Down Replacement Cost. Additons at cost. - Date of valuation: 30 June 2011 - Valuer: Maloney Field Services Pty Ltd

Bridges and Major Culverts - Basis of valuation: Written Down Replacement Cost. Additons at cost. - Date of valuation: 1 July 2017. - Valuer: Tonkins Consultancy

Council plans to undertake a full revaluation that will include condition based assessments and review of unit rates of of its assets on a five-yearly rolling program according to the following schedule in consultation with its external assetmanagement consultants.Stormwater 2019/20Land,Buildings & Assoc Structures 2019/20Footpaths & Kerbing 2020/21CWMS & Water Supply 2022/23Bridges & Major Culverts 2022/23Roads 2021/22

Note 8. Liabilities

$ '000

(a). Trade and Other Payables

Goods & ServicesAccrued Expenses - Employee EntitlementsAccrued Expenses - Finance CostsDeposits, Retentions & BondsTotal Trade and Other Payables

20182018Non CurrentCurrent Current

1,644 -

- 2,169

Non Current

27

Notes2019

-

2019

2,583

410 2,027

5 - - 141 - -

391 - -

134 27

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Page 27: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 8. Liabilities (continued)

$ '000

(b). Borrowings

LoansTotal BorrowingsAll interest bearing liabilities are secured over the future revenues of the Council

(c). Provisions

Employee Entitlements (including oncosts)Future Reinstatement / Restoration, etcTotal Provisions

Note 9. Reserves

$ '000

(a). Asset Revaluation Reserve

LandLand - OtherBuildings & Other StructuresInfrastructure- Roads- Road Earthworks- Bridges- Stormwater Drainage- Effluent Drainage- Capping and ReinstatementTotal Asset Revaluation ReserveComparatives

$ '000

(b). Other Reserves

Building & Infrastructure ReserveEffluent Drainage ReserveProjects ReserveTotal Other ReservesComparatives

-

792 301 - - 1,093

577

7,615 - - 11,566 -

-

-

11,566

Transfers Impairments

48,593

- 6,895

-

Notes

154,901 150,766

- -

-

54,423 - -

- 6,895 4,365 - -

-

429 - - - 429

7,615

54,423

-

20,438

577 - -

4,135

37 (37)

864 (864)

1/7/2018 Tfrs from Reserve

Other Movements 30/6/2019

1,465 1,693

- (600) 1,093

Tfrs to Reserve

1,693

20,438 - -

- -

-

2018Current Non Current

22 1,836 1,800 862

856 936 11,208

2019 2019 2018Notes Current Non Current

123 1,762 78 739

11,311 856

1,814

11,208

609 531 38

30/6/2019

-

11,311 936

1/7/2018 Increments (Decrements)

228 - - - - -

-

-

-

-

154,901 154,901

Notes

-

4,365

48,593 - -

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Page 28: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 9. Reserves (continued)

$ '000

PURPOSES OF RESERVESAsset Revaluation ReservesThe asset revaluation reserve is used to record increments and decrements arising from changes in fair value ofnon current assets (less any subsequent impairment losses, where applicable).

Note 10. Assets Subject to Restrictions

$ '000

The uses of the following assets are restricted, wholly or partially, by legislation or other externally imposed requirements. The assets are required to be utilised for the purposes for which control was transferred to Council, or for which the revenues were originally obtained.

Cash & Financial AssetsUnexpended amounts received from Federal GovernmentOpen Space Contributions - FederalRoads To Recovery - FederalSmart Cities & Suburbs Program - FederalWomen of the River Exhibition Grant - FederalDrought Funding - FederalMurray Coorong Trail - State Open Space Contributions - StateSpecial Local Road Grant (Murraylands Road) - StateOther - StateOther - Non GovernmentTotal Cash & Financial Assets

122 63 -

1,087

1 386

- 224

42

2018Notes

52 -

2019

-

982

- 189

120 34 83

198 330 - 225

1/7/2018 Increments (Decrements) Transfers Impairments 30/6/2019

Notes

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Page 29: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 11. Reconciliation to Statement of Cash Flows

$ '000

(a). Reconciliation of Cash

Cash Assets comprise highly liquid investments with short periods tomaturity subject to insignificant risk of changes of value. Cash at theend of the reporting period as shown in the Statement of Cash Flowsis reconciled to the related items in the Balance Sheet as follows:

Total Cash & Equivalent AssetsBalances per Statement of Cash Flows

(b). Reconciliation of Change in Net Assets to Cash from Operating Activities

Net Surplus/(Deficit)Non-Cash Items in Income Statements Depreciation, Amortisation & Impairment Grants for Capital Acquisitions (Treated as Investing Activity Receipts) Net (Gain) Loss on Disposals

Add (Less): Changes in Net Current Assets Net (Increase)/Decrease in Receivables Change in Allowances for Under-Recovery of Receivables Net (Increase)/Decrease in Inventories Net (Increase)/Decrease in Other Current Assets Net Increase/(Decrease) in Trade & Other Payables Net Increase/(Decrease) in Unpaid Employee Benefits Net Increase/(Decrease) in Other ProvisionsNet Cash provided by (or used in) operations

(c). Financing Arrangements

Unrestricted access was available at balance date to the following lines of credit:Corporate Credit CardsLGFA Cash Advance Debenture Facility 15,829 16,582

192

55

97 42

724

258

(420) (1,794)

6,573

258 500

6,931

3,988

5

Notes

409 (465)

159 128 5,366 3,811

211

149 (220)

38 33

39 6,484

2019 2018

500

(1,304) (1,096)

(2) 2

62

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Page 30: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 12a. Functions

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual$ '000 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

CEO - 11 788 1,144 (788) (1,133) - - 6,992 - People & Culture 3 554 - (551) - - 3 - - Corporate Services 3,399 3,388 494 1,077 2,905 2,311 3,255 3,007 210 33,814 Financial Services 48 48 1,490 1,318 (1,442) (1,270) 5 5 - - Funding 13,731 13,012 630 619 13,101 12,393 - - - - Information Management 8 11 1,455 1,482 (1,447) (1,471) 5 5 679 820 Libraries 24 21 171 237 (147) (216) 23 20 - - Community Care 70 76 1,115 805 (1,045) (729) 1 58 113 120 Community Transport 10 166 12 162 (2) 4 10 166 - - Cultural Services 97 41 172 157 (75) (116) 54 - - - Tourism and Development 467 325 1,282 1,095 (815) (770) 75 - 897 917 Council Properties 610 317 1,787 1,683 (1,177) (1,366) 227 - 17,954 18,642 Regulatory Services 114 144 464 495 (350) (351) - - 36 37 Health Services 36 48 211 222 (175) (174) - - - - Environment Services 93 285 103 324 (10) (39) 11 - - - Development Services 251 324 1,101 1,463 (850) (1,139) - 10 - - Waste Management 476 513 2,682 2,166 (2,206) (1,653) - - 3,002 2,000 Marine Facilities - - 40 58 (40) (58) - - 722 735 Sport and Recreation 340 73 704 496 (364) (423) 268 - 27,215 2,661 Open Space 206 44 1,178 1,198 (972) (1,154) 206 44 6,507 4,413 Footpaths and Cycle Tracks - 21 104 159 (104) (138) - 21 1,936 1,788 (continued on next page)

Details of these Functions/Activities are provided in Note 12(b).

Functions/Activities

Income, Expenses and Assets have been directly attributed to the following Functions / Activities.

INCOME EXPENSES OPERATINGSURPLUS (DEFICIT)

TOTAL ASSETS HELD (CURRENT &

NON-CURRENT)

GRANTS INCLUDEDIN INCOME

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Page 31: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 12a. Functions (continued)

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual$ '000 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

Stormwater - - 163 219 (163) (219) - - 6,358 6,430 Cemeteries 48 39 86 91 (38) (52) - - 201 210 Roads 18 15 6,081 6,286 (6,063) (6,271) - - 101,865 101,212 Infrastructure Services 2,173 2,393 862 822 1,311 1,571 2,114 2,358 - - Works Overheads 126 91 132 100 (6) (9) - - - - Plant and Machinery 112 114 114 260 (2) (146) - - 4,703 5,099 Water Supply 57 55 15 16 42 39 - - 258 265 Community Wastewater Management 880 816 972 999 (92) (183) 100 - 13,118 13,530

Total Functions/Activities 23,397 22,391 24,962 25,153 (1,565) (2,762) 6,354 5,697 192,766 192,693 Revenues and expenses exclude net gain (loss) on disposal or revaluation of assets, amounts received specifically for new or upgraded assets and physical resources received free of charge.

Functions/Activities

Income, Expenses and Assets have been directly attributed to the following Functions / Activities.Details of these Functions/Activities are provided in Note 12(b).

INCOME EXPENSES OPERATINGSURPLUS (DEFICIT)

GRANTS INCLUDEDIN INCOME

TOTAL ASSETS HELD (CURRENT &

NON-CURRENT)

page 30

Page 32: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 12b. Components of Functions

The activities relating to Council functions are as follows:

CEO

PEOPLE & CULTURE

CORPORATE SERVICES

FINANCIAL SERVICES

FUNDING

INFORMATION MANAGEMENT

LIBRARIES

COMMUNITY CARE

COMMUNITY TRANSPORT

CULTURAL SERVICES

TOURISM AND DEVELOPMENT

COUNCIL PROPERTIES

REGULATORY SERVICES

HEALTH SERVICES

Elected Members, Governance, Business Improvement and Human Resources.

Corporate Services and Risk Management.

Financial Services, Audit Function, Revenue Collection, Procurement, Loans and Investments.

Rates General, Rates Other and Grants Commission.

Customer Service, Information Technology and Records Management.

All Libraries including Mannum and Morgan.

Community Services including Morgan Activity Centre and Hub, Blanchetown Community Centre,Aged/Disabled/Disadvantaged Homes, Family Connections, Suicide Prevention Network and Health Centres.

Chief Executive's office.

Includes Dog and Cat Control, Parking, Camping Sites and Other General Inspection, Fire Prevention/Protection andIllegal Developments.

Environmental Health Services and Health Prevention Services.

Tourism, Economic Development and Mannum Dock.

Cultural Services including Port of Morgan Heritage Centre.

Community Transport and Community Passenger Network.

Including Admin Buildings, Public Conveniences, Mannum Caravan Park, Television Services, Licenses and Leases.

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Page 33: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 12b. Components of Functions (continued)

ENVIRONMENT SERVICES

DEVELOPMENT SERVICES

WASTE MANAGEMENT

MARINE FACILITIES

SPORT AND RECREATION

OPEN SPACE

FOOTPATHS AND CYCLE TRACKS

STORMWATER

CEMETERIES

ROADS

INFRASTRUCTURE SERVICES

WORKS OVERHEADS

PLANT AND MACHINERY

WATER SUPPLY

COMMUNITY WASTEWATER MANAGEMENT

Mannum Leisure Centre, Mannum and Cambrai Swimming Pools.

Includes Mary Ann, Morgan Riverfront, Pioneer Park, Graeme Claxton and other open spaces.

Footpaths and Cycle Tracks.

Includes Development General Services, Building Assessments and Planning Assessments.

Waste Collections, Disposal Facility Cambrai, Transfer Stations, Recycling and Organics Waste Management andGeneral Waste Management Services.

Mannum and Morgan Wharf Precincts and Other Marine Facilities.

Plant and Machinery Services for Capital and Operations.

Water Supply service for Bowhill.

Cemeteries services.

Sealed and Unsealed Roads, Road Reserves, Bridges, Kerbs and Gutters, Street Lighting and Traffic Control.

Infrastructure, Asset Management & GIS Services and Emergency Responses.

Works Depot and Private Works services.

Natural Resources Management and Environmental General Services.

Stormwater services.

Provision of Community Wastewater Management Schemes for various private-owned shacks and townships.

page 32

Page 34: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments

$ '000

Recognised Financial Instruments

Bank, Deposits at Call, Short Term Deposits Accounting Policy:Carried at lower of cost and net realisable value; Interest isrecognised when earned.

Terms & Conditions:Short term deposits have an average maturity of 24 hoursand an average interest rate of between 1.25% and 1.5%.(2018: 24 hours and 1.5%).

Carrying Amount:Approximates fair value due to the short term to maturity.

Receivables Accounting Policy:Rates & Associated Charges Carried at nominal values less any allowance for doubtful debts.(including legals & penalties for late payment) An allowance for doubtful debts is recognised (and re-assessed

annually) when collection in full is no longer probable.

Terms & Conditions:Secured over the subject land, arrears attract interest of 6.60%(2018: 6.75%). Council is not materially exposed to any individualdebtor, credit risk exposure is concentrated within the Council's boundaries in the State.

Carrying Amount:Approximates fair value (after deduction of any allowance).

Receivables Accounting Policy:Fees & Other Charges Carried at nominal values less any allowance for doubtful debts.

An allowance for doubtful debts is recognised (and re-assessed annually) when collection in full is no longer probable.

Terms & Conditions:Unsecured, and do not bear interest. Council is not materiallyexposed to any individual debtor, credit risk exposure isconcentrated within the Council's boundaries.

Carrying Amount:Approximates fair value (after deduction of any allowance).

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Page 35: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments (continued)

$ '000

Recognised Financial Instruments

Receivables Accounting Policy:Other Levels of Government Carried at nominal value.

Terms & Conditions:Amounts due have been calculated in accordance with theterms and conditions of the respective programs followingadvice of approvals, and do not bear interest. All amountsare due by Departments and Agencies of State and FederalGovernments.

Carrying Amount:Approximates fair value.

Receivables Accounting Policy:Retirement Home Contributions Carried at nominal values less any allowance for doubtful debts.

An allowance for doubtful debts is recognised (and re-assessed annually) when collection in full is no longer probable.

Terms & Conditions:Amounts due have been calculated in accordance with the termsand conditions of the respective legislation.

Carrying Amount:Approximates fair value (after deduction of any allowance).

Liabilities Accounting Policy:Creditors and Accruals Liabilities are recognised for amounts to be paid in the future for

goods and services received, whether or not billed to the Council.

Terms & Conditions:Liabilities are normally settled on 30 day terms.

Carrying Amount:Approximates fair value.

page 34

Page 36: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments (continued)

$ '000

Recognised Financial Instruments

Liabilities Accounting Policy:Retirement Home Contributions To avoid inconvenience when complying with the separate audit

requirements imposed by the relevant legislation, amounts arecarried at nominal values.

Terms & Conditions:Pursuant to Commonwealth legislation certain intending residents are required to contribute amounts on an interest free basis. The amounts are subject to certain deductions as prescribed by the legislation, the balance being repaid ontermination of tenancy.

Carrying Amount:Approximates fair value for short tenancies; may be non-materially overstated for longer tenancies.

Liabilities Accounting Policy:Interest Bearing Borrowings Carried at the principal amounts. Interest is charged as an

expense as it accrues.

Terms & Conditions:Secured over future revenues, borrowings are repayable half yearly for fixed and periodically within the term for variable(CAD) borrowings; interest is charged at fixed (or variable) ratesbetween 3.35% and 6.7% (2018: 3.6% and 6.7%).

Carrying Amount:Approximates fair value.

Liabilities Accounting Policy:Finance Leases Accounted for in accordance with AASB 117.

page 35

Page 37: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments (continued)

$ '000

2019Financial AssetsCash & EquivalentsReceivablesTotal Financial Assets

Financial LiabilitiesPayablesCurrent BorrowingsNon-Current BorrowingsTotal Financial Liabilities

2018Financial AssetsCash & EquivalentsReceivablesTotal Financial Assets

Financial LiabilitiesPayablesCurrent BorrowingsNon-Current BorrowingsTotal Financial Liabilities

The following interest rates were applicableto Council's Borrowings at balance date:

Variable Interest RatesFixed Interest Rates

Net Fair ValueAll carrying values approximate fair value for all recognised financial instruments. There is no recognised market forthe financial assets of the Council.

8,145

688 11,311

2,668

Due> 5 years

2,173

3,070

2,451

ValuesCash FlowsDue > 1 yearDue

& ≤ 5 years

11,594 11,208

14,847

14,805 14,237

14,045

CarryingValue

1,038

258 258

3,080 2,709

11,880

Weighted Avg Weighted Avg

7,418

30 June 2019

Interest RateCarrying

Interest RateValue

30 June 2018

2,173

12,247

936

-

- 2,822

1,798

Carrying

1,169 -

3,543 27

1,771

3,211

3,080

27

258 -

8,145

- 1,169 1,798

-

-

- 500 500 27

500

< 1 year

- 3,570 3,168

7,940 6,219 5,000 6,192

-

- 3,449 856

2,822 - - -

688

-

2,173 - 1,038 -

3,043

-

3,449

12,064

3.58% 8,171 4.53% 3,893 4.68% 4,829

3.75%

Total Contractual

page 36

Page 38: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments (continued)

$ '000

Risk Exposures

Credit Risk represents the loss that would be recognised if counterparties fail to perform as contracted. The maximum credit risk on financial assets of the Council is the carrying amount, net of any allowance for doubtful debts. All Councilinvestments are made with the SA Local Government Finance Authority and are guaranteed by the SA Government.Except as detailed in Notes 5 & 6 in relation to individual classes of receivables, exposure is concentrated within theCouncil's boundaries, and there is no material exposure to any individual debtor.

Market Risk is the risk that fair values of financial assets will fluctuate as a result of changes in market prices. Allof Council's financial assets are denominated in Australian dollars and are not traded on any market, and henceneither market risk nor currency risk apply.

Liquidity Risk is the risk that Council will encounter difficulty in meeting obligations with financial liabilities. In accordance with the model Treasury Mangement Policy (LGA Information Paper 15), liabilities have a range ofmaturity dates. Council also has available a range of bank overdraft and standby borrowing facilities that it can access.

Interest Rate Risk is the risk that future cash flows will fluctuate because of changes in market interest rates.Council has a balance of both fixed and variable interest rate borrowings and investments. Cash flow fluctuations aremanaged holistically in seeking to minimise interest costs over the longer term in a risk averse manner.

Note 14. Commitments for Expenditure

$ '000

Other Expenditure Commitments

Other expenditure committed for (excluding inventories) at the reportingdate but not recognised in the financial statements as liabilities:

Audit ServicesWaste Management ServicesMaintenance ContractsBanking ServicesAdministration ServicesOther

These expenditures are payable:Not later than one yearLater than one year and not later than 5 yearsLater than 5 years -

6,535

24 5,831

30

2019 2018

810 4,247 2,780

18 -

6,535

3,590

1,280

3,590

157 163

Notes

3,184

22 66 483 147

1,008

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Page 39: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 15. Financial Indicators

$ '000

1. Operating Surplus RatioOperating SurplusTotal Operating Income

This ratio expresses the operating surplus as a percentage of totaloperating revenue.

2. Net Financial Liabilities RatioNet Financial LiabilitiesTotal Operating Income

Net Financial Liabilities are defined as total liabilities less financial assets

(excluding equity accounted investments in Council businesses). These are

expressed as a percentage of total operating revenue.

Adjustments to RatiosIn recent years the Federal Government has made advance payments prior

to 30th June from future year allocations of financial assistance grants, as

explained in Note 1. These Adjusted Ratios correct for the resulting distortion

in key ratios for each year and provide a more accurate basis for comparison.

Adjusted Operating Surplus Ratio

Adjusted Net Financial Liabilities Ratio

3. Asset Renewal Funding RatioNet Asset RenewalsInfrastructure & Asset Management Plan required expenditure

Net asset renewals expenditure is defined as net capital expenditure on

the renewal and replacement of existing assets, and excludes new

capital expenditure on the acquisition of additional assets.

40%23,397

2,565 82% 68% 46%3,117

(10%) (11%) (15%)

40%59%63%

(1,565) 23,397

(7%)

Amounts2019 2019 2018 2017

Indicator Prior Periods

14,215 61% 59%

These Financial Indicators have been calculated in accordance with Information paper 9 - Local Government Financial Indicators prepared as part of the LGA Financial Sustainability Program for the Local Government Association of South Australia.

(6%)(12%)

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Page 40: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 16. Uniform Presentation of Finances

$ '000

The following is a high level summary of both operating and capital investment activities of the Council prepared on a simplified Uniform Presentation Framework basis.All Councils in South Australia have agreed to summarise annual budgets and long-term financial plans on the same basis.The arrangements ensure that all Councils provide a common 'core' of financial information, which enables meaningful comparisons of each Council's finances.

Incomeless ExpensesOperating Surplus / (Deficit)

Net Outlays on Existing Assets Capital Expenditure on Renewal and Replacement of Existing Assets add back Depreciation, Amortisation and Impairment add back Proceeds from Sale of Replaced AssetsSubtotal

Net Outlays on New and Upgraded Assets

add back Amounts Received Specifically for New and Upgraded Assets

Subtotal

Net Lending / (Borrowing) for Financial Year

Note 17. Operating Leases

Not later than one yearLater than one year and not later than 5 yearsLater than 5 years - -

22,391 23,397 (24,962)

74

(25,153) (2,762) (1,565)

(3,977)

(2,603) (3,882)

(3,456)

61 444

6,573

2,914

(1,176)

27 51

(3,304)

38

(5,342) (4,996)

2019

Commitments under non-cancellable operating leases that have not been recognised in the financial statements are as follows:

23

223

2018

4,366

1,304 1,096

6,931

23

50

Capital Expenditure on New and Upgraded Assets (including Investment Property & Real Estate Developments)

add back Proceeds from Sale of Surplus Assets (including Investment Property, Real Estate Developments and Non-Current Assets Held for Resale)

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Page 41: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 18. Superannuation

$ '000

The Council makes employer superannuation contributions in respect of its employees to Statewide Super (formerly Local Government Superannuation Scheme). There are two types of membership, each of which is funded differently. Permanent and contract employees of the South Australian Local Government sector with Salarylink benefits prior to 24 November 2009 have the option to contribute to the Accumulation section and/or Salarylink. All other employees (including casuals) have all contributions allocated to the Accumulation section.

Accumulation only MembersAccumulation only members receive both employer and employee contributions on a progressive basis. Employer contributions are based on a fixed percentage of ordinary time earnings in accordance with superannuation guarantee legislation (9.50% in 2018/19; 9.50% in 2017/18). No further liability accrues to the Council as the superannuation benefits accruing to employees are represented by their share of the net assets of the Fund.

Salarylink (Defined Benefit Fund) MembersSalarylink is a defined benefit scheme where the benefit payable is based on a formula determined by the member’s contribution rate, number of years and level of contribution and final average salary. Council makes employer contributions to Salarylink as determined by the Fund’s Trustee based on advice from the appointed Actuary. The rate is currently 6.3% (6.3% in 2017/18) of “superannuation” salary.

In addition, Council makes a separate contribution of 3% of ordinary time earnings for Salarylink members to their Accumulation account. Employees also make member contributions to the Salarylink section of the Fund. As such, assets accumulate in the Salarylink section of the Fund to meet the member's benefits, as defined in the Trust Deed, as they accrue.

The Salarylink section is a multi-employer sponsored plan. As the Salarylink section's assets and liabilities are pooled and are not allocated by each employer, and employees may transfer to another employer within the local government sector and retain membership of the Fund, the Actuary is unable to allocate benefit liabilities, assets and costs between employers. As provided by AASB 119.32(b), Council does not use defined benefit accounting for these contributions.

The most recent actuarial investigation was conducted by the Fund's actuary, Louise Campbell, FIAA, of WillieTowers Watson as at 30 June 2017. The Trustee has determined that the current funding arrangements are adequate for the expected Salarylink liabilities. However, future financial and economic circumstances may require changes to Council’s contribution rates at some future time.

Contributions to Other Superannuation Schemes Council also makes contributions to other superannuation schemes selected by employees under the “choice of fund” legislation. All such schemes are of the accumulation type, where the superannuation benefits accruing to the employee are represented by their share of the net assets of the scheme, and no further liability attaches to the Council.

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Page 42: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 19. Contingencies & Assets/Liabilities Not Recognised in the Balance Sheet

$ '000

The following assets and liabilities do not qualify for recognition in the Balance Sheet, but knowledge is consideredrelevant to the users of the financial report in making and evaluating decisions about the allocation of scarceresources.

1. LAND UNDER ROADSAs reported in the Financial Statements, Council is of the opinion that it is not possible to attribute a value sufficiently reliably for these assets to qualify for recognition, and accordingly land under roads has not been recognised in the reports. Land acquired for road purposes during the year is initially recognised at cost, but transferred to fair value at reporting date, effectively writing off the expenditure.

At reporting date, Council controlled 3,536 km of road reserves of average width 20 metres.

2. POTENTIAL INSURANCE LOSSESCouncil is a multi-purpose organisation providing a large range of building, parks infrastructure, playgrounds and other facilities accessible to the public. At any time, it is likely that claims will have been made against Council that remain unsettled.

Council insures against all known insurable risks using a range of insurance policies, each of which is subject to deductable "insurance excesses", the amount of which varies according to the class of insurance.

Council has recognised the potential losses arising from claims known at reporting date based on average historical net cost (including insurance excess) of similar types of claims. Other potential claims not reported to Council may have existed at reporting date.

3. LEGAL MATTERSCouncil is the planning consent authority for its area under the Development Act 1993 (as amended). Pursuant to that Act, certain persons aggrieved by a planning decision of the Council may appeal. It is normal practice that parties bear their own legal costs. At the date of these reports, Council had no notice of appeals against planning decisions made prior to reporting date.

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Page 43: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 20. Related Party Transactions

$ '000

Key Management Personnel

Transactions with Key Management PersonelThe Key Management Personnel of the Council include the Mayor, Councillors, CEO and certain prescribed officers under section 112 of the Local Government Act 1999 . In all, 21 persons were paid the following total compensation:

The compensation paid to Key Management Personnel comprises:Short-Term Employee BenefitsLong-Term BenefitsTotal

Amounts paid as direct reimbursement of expenses incurred on behalf of Council have not been included above.

Receipts from Key Management Personnel comprise:Other than amounts paid as ratepayers or residents (e.g. rates, swimming pool entry fees, etc.), Council received the following amounts in total:

Outdoor PermitsReserve HireTotal

Key Management Personnel and/or close family members where committee members of the following Notfor Profit organisations that during the year received Community Grants :-Sedan Historical Enthusiasts - $1,165.00 Den Inc (Sedan Men's Shed)Cambrai Agricultural Museum Inc. - $1,000.00Lions Club of Ridley - $495.00Mannum Hospital Auxiliary $2,000Morgan Small Bore Rifle Club $2,095Cadell Community & Tourism Association $2,000

Three close family members of Key Management Personnel were employed by the Council in accordance withthe terms of the appropriate Award, and recorded in the public Register of Salaries maintained in accordancewith section 105 of the Local Government Act 1999.

- 5 5 1

836

833

1 -

11 932

3

2019 2018

921

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page 42

Page 44: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Mid Murray Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 20. Related Party Transactions (continued)

$ '000

Key Management Personnel and/or close family members are committee members of the following Notfor Profit organisations that had interest free Comunity Loans during the financial year :--Swan Reach Golf Club Committee was granted an additional $12,000 loan balance 30 June 2019 $13,000-Mannum Golf Club made repayments of $10,000 loan balance 30 June 2019 $35,000-Mannum Bowling Club made repayments of $4,160 loan balance as at 30 June 2019 $Nil-Mannum Netball Club made repayments of $1,250 loan balance as at 30 June 2019 $2,500-Blanchetown Kart Club made repayments of $2,500 loan balances as at 30 June 2019 $Nil

Key Management Personnel and/or close family members are committee members of the following Notfor Profit organisations that were paid the following amounts during the financial year :--Nildottie Progress Association (Toilet Cleaning) $2,600-Wall Flat Progress (Hall Hire) $100-Mid Murray Landcare (Revegetation & Consultancy) $8,917-Riverland West Chambers (Annual Contribution) $3,432-Cadell Community & Tourism Association (Annual Contribution) $48,843-Destination Riverland Inc. (Annual Contribution) $7,013-Mannum Football Club (Sponsorship) $250-Mannum Progress Association (Christmas, New Years Donation) $4,500

One close family member of two Key Management Personnel are a member of the management committee of theMannum Netball Club that hired the Mannum Leisure Centre, total amount paid during the financial year $2,697

Payments between Council and Key Management Personnel and/or close family members during the financial year :--Truck Hire $18,220-Sale of Goods $2,303-Management/Consultancy Fees $127,866

One family member of a Key Management Personnel was an elected member of Council under the LG Act.

2019 2018

page 43

Page 45: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE MID MURRAY COUNCIL

Opinion

We have audited the accompanying financial report of the Mid Murray Council, which comprises thestatement of financial position as at 30 June 2019, the statement of profit or loss and othercomprehensive income, statement of changes in equity and statement of cash flows for the year thenended, and notes to the financial statements, including a summary of significant accounting policiesand the Certification of the Financial Statements.

In our opinion, the financial report gives a true and fair view of the financial position of the Mid MurrayCouncil as of 30 June 2019, and of its financial performance and its cash flows for the year thenended in accordance with Australian Accounting Standards and the Local Government Act 1999 andthe Local Government (Financial Management) Regulations 2011.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities underthose standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the entity in accordance with the ethicalrequirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report inAustralia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Report

Management is responsible for the preparation of the financial report, which gives a true and fair viewin accordance with Australian Accounting Standards and the Local Government Act 1999 and theLocal Government (Financial Management) Regulations 2011, and for such internal control as thecommittee and management determines is necessary to enable the preparation of a financial reportthat gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, management is responsible for assessing the entity’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and usingthe going concern basis of accounting unless management either intends to liquidate the entity or tocease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the entity’s financial reporting process.

page 44

Page 46: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole isfree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee thatan audit conducted in accordance with the Australian Auditing Standards will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered materialif, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditingand Assurance Standards Board website at http://www.auasb.gov.au/Home.aspx. This descriptionforms part of our auditor’s report.

BENTLEYS SA AUDIT PARTNERSHIP

DAVID PAPAPARTNER

Dated at Adelaide this 28th day of November 2019

page 45

Page 47: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

INDEPENDENT ASSURANCE REPORT ONINTERNAL CONTROLS OF MID MURRAY COUNCIL

Opinion

We have audited the compliance of Mid Murray Council (the Council) with the requirements of Section 125 of the Local Government Act 1999 in relation to the Internal Controls established by the Council to ensure thatfinancial transactions relating to the receipt, expenditure and investment of money, acquisition and disposalof property and incurring of liabilities for the period 1 July 2018 to 30 June 2019 are in accordance withlegislative provisions.

In our opinion, the Council has complied, in all material respects, with Section 125 of the Local Government Act 1999 in relation to Internal Controls, established by the Council in relation to the receipt, expenditure andinvestment of money, acquisition and disposal of property and incurring of liabilities so as to providereasonable assurance that the financial transactions of the Council have been conducted properly and inaccordance with legislative provisions for the period 1 July 2018 to 30 June 2019.

Limitation on Use

This report has been prepared for the members of the Council in accordance with Section 129 of the Local Government Act 1999 in relation to Internal Controls specified above. We disclaim any assumption ofresponsibility for any reliance on this report to any persons or users other than the members of the Council,or for any purpose other than that for which it was prepared.

Limitations of Controls

Because of the inherent limitations of any internal control structure it is possible that, even if the controls aresuitably designed and operating effectively, the control objectives may not be achieved so that fraud, error,or non-compliance with laws and regulations may occur and not be detected.

An assurance engagement on internal controls is not designed to detect all instances of controls operatingineffectively as it is not performed continuously throughout the period and the tests performed are on asample basis. Any projection of the outcome of the evaluation of controls to future periods is subject to therisk that the controls may become inadequate because of changes in conditions, or that the degree ofcompliance with them may deteriorate.

Independence

In conducting our engagement, we have complied with the independence requirements of the Australianprofessional accounting bodies.

page 46

Page 48: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

The Council’s Responsibility for the Internal Controls

The Council is responsible for implementing and maintaining an adequate system of internal controls, inaccordance with Section 125 of the Local Government Act 1999 in relation to Internal Controls, to ensurethat the receipt, expenditure and investment of money, the acquisition and disposal of property, and incurringof liabilities are in accordance with legislative provisions.

Our Responsibility

Our responsibility is to express an opinion on the Council’s compliance with Section 125 of the Local Government Act 1999 in relation only to the Internal Controls established by the Council to ensure thatfinancial transactions relating to the receipt, expenditure and investment of money, acquisition and disposalof property and incurring of liabilities, based on our procedures. Our engagement has been conducted inaccordance with applicable Australian Standards on Assurance Engagements ASAE 3100 Compliance Engagements, issued by the Australian Auditing and Assurance Standards Board, in order to state whether,in all material respects, the Council has complied with Section 125 of the Local Government Act 1999 inrelation only to the Internal Controls specified above for the period 1 July 2018 to 30 June 2019. ASAE 3100also requires us to comply with the relevant ethical requirements of the Australian professional accountingbodies.

Our procedures included obtaining an understanding of internal controls in relation to the receipt,expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities,evaluating management’s assessment of these internal controls, assessing the risk that a material weaknessexists, and testing and evaluating the design and implementation of controls on a sample basis on theassessed risks.

BENTLEYS SA AUDIT PARTNERSHIP

DAVID PAPAPARTNER

Dated at Adelaide this 28th day of November 2019

page 47

Page 49: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,
Page 50: Mid Murray Council€¦ · Mid Murray Council is incorporated under the South Australian . Local Government Act 1999. and has its principal place of business at 49 Adelaide Road,

Certification of Auditor Independence

I confirm that, for the audit of the financial statements of Mid Murray Council for the year ended 30 June 2019, I have maintained my independence in accordance with the requirements of APES 110 – Code of Ethics for Professional Accountants, Section 290, published by the Accounting Professional and Ethical Standards Board, in accordance with the Local Government Act 1999 and the Local Government (Financial Management) Regulations 2011 made under that Act.

This statement is prepared in accordance with the requirements of Regulation 22 (5) Local Government (Financial Management) Regulations 2011.

Bentleys SA Audit Partnership

David Papa Partner

Dated at Adelaide this 23rd day of October 2019

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