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Canberra Today 13°/17° | Saturday, March 30, 2024 | Digital Edition | Crossword & Sudoku

Auditor-General raises concerns about the Territory’s finances

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THE ACT Auditor?General, Dr Maxine Cooper, has presented the report on 2014?15 Financial Audits to the Speaker for tabling in the ACT Legislative Assembly.

This report presents information on two key issues for the Territory:

  • the financial sustainability of the ACT Government’s strategies and policies, particularly when assessed over time – as reflected in the financial operating results (operating balance and operating surplus/deficit); and
  • the capacity of the ACT Government to meet its financial obligations over the short and long?term – as reflected in its net asset position, short?term assets to short?term liabilities, and financial assets to liabilities.

“With respect to financial sustainability, there are challenges for the Territory as it incurred a deficit in the net operating balance (i.e. expenses exceeded revenue) of $646 million in 2014?15. This deficit exceeds the budgeted deficit of $537 million and the prior year deficit of $309 million. The higher than expected deficit includes large unbudgeted costs of $336 million relating to ‘Mr Fluffy’ (Loose?Fill Asbestos Eradication Scheme),” Maxine said.

The 2014?15 Financial Audits report highlights financial challenges for the Territory, including:

  • the unfunded superannuation liability ($5 158 million at 30 June 2015). Further large cash injections may be required in future years to meet the ACT Government’s objective of it being fully funded by 30 June 2030; and
  • repaying borrowings ($4 593 million at 30 June 2015). These are expected to increase to fund major capital projects such as the light rail, construction of the ACT Court facilities and duplication of major roads in Gungahlin (Horse Park Drive and Gundaroo Drive) and Tuggeranong (Ashley Drive).

“The capacity of the ACT Government to meet its financial obligations will require, as always, giving attention to managing risks. If unexpected adverse events occur, or forecast costs of major capital projects significantly increase, then the challenge of meeting financial obligations increases. Mr Fluffy was an unexpected event in 2014?15 which has had significant adverse affects on the Territory’s finances.

“All 70 financial statements audited in 2014?15 received an unqualified audit report indicating their quality was sound,” Maxine concluded.

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