Media response: Brisbane Times enquiry re 2006/2007 budget

25 July 2018

Brisbane Times/Fairfax enquiry – reporter Mark Solomons – 2006/2007 budget

Brisbane Times:

In the 2007 financial year ICC revalued its footpaths and as a result recorded $12.385 million in "other revenue" under the heading "revisions to infrastructure assets" in Council's annual financial statement.

The statement describes a "special project" carried out in 2006/7 to address an "information deficit" regarding footpaths.

On 2 December 2008 this specific accounting practice was raised with the then-Local Government Minister Warren Pitt by the then-chairman of the Local Government Remuneration Tribunal, Adrian Bloomfield, at a meeting in the Minister's office at Parliament attended by the then Director-General and Deputy Director-General.

Mr Bloomfield has described this accounting practice by ICC as "irregular" and "questionable".

Is Council aware of any action being taken by the Local Government Department or Minister's office to follow up Mr Bloomfield's concerns?

Were any concerns raised about this by the QAO?

Can Council provide an explanation as to how or why the city's footpaths were considered to be income-producing? 

Council spokesperson:

Ipswich City Council refutes the claims and assertions made. The process was undertaken in accordance with the specific requirements of the Queensland Audit Office (QAO).

KPMG (as delegate for the QAO) in 2007 specifically noted that all assets not previously recognised were to be accounted for in the income statement.

Footpath assets are not viewed by council as income producing.

The fact that the change in estimate for the recognition of footpaths was correctly recorded in the Income Statement does not make footpath assets income producing.

As explained in Note 1 (b)(ii) to the Financial Statements: Revisions to Infrastructure Assets,  a review was undertaken in relation to the recognition of footpath assets from 1998/1999 and additions since this time.

All councils at the time were still identifying assets they owned which were not previously recognised in their fixed assets.

This was a change in estimates as disclosed in Note 1 (b)(ii) and not a revaluation as noted in the question.

The change in estimate for the recognition of the assets was recorded as Revenue as disclosed in Note 7.

The Foreword to the Financial Statements, point 8, comments that Other Revenue increased “mainly attributable to the first time recognition of assets”.

The 2007 Financial Statements were audited, verified and approved by the QAO in accordance with Australian accounting standards.

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