Wangaratta council reports $11.6m deficit following $4.7m asset write-off and major settlement

Rural City of Wangaratta councillors have assured the community that a $16.5 million swing to the red shown in recent financial statement is "not all as bad as it looks", referring to one-off asset write-offs and accounting adjustments as main drivers to the loss. At their last monthly meeting in Everton, councillors voted unanimously to approve council's financial and performance statements for the year ended 30 June 2026, which included a turnaround from a $4.9m surplus in 2024/25 to an $11.6m operating deficit for 2025/26. The adoption follows an extensive review by council's audit and risk committee and highlights key financial movements over the past year, including an increase in cash holdings to $32.72m and a comprehensive revaluation of local infrastructure assets. Council acting director corporate and leisure, Stephen Swart, said the reported $11.6m accounting deficit includes approximately $12.4m of one-off asset write-offs and accounting adjustments associated with a review of council's asset register and work in progress balances. “These adjustments are largely non-cash in nature and do not reflect an equivalent cash loss,” he said. “Council finished the year with $32.7m in cash and cash equivalents and generated $20.5m in positive operating cash flow.” This increase was primarily due to the comprehensive exercise to capitalise Work in Progress (WIP) balances, which resulted in approximately $4.69m of expenditure being written off where it no longer met asset recognition requirements. Council also recognised a $5m settlement relating to the Co-Store contract. Mr Swart said in simple terms the change from a surplus in 2024/25 to a deficit in 2025/26 is largely due to several one-off items. “These include accounting adjustments following a review of council’s asset records, the timing and recognition of grant income, and costs associated with ending the Co-Store contractual arrangement,” he said. Cr Harvey Benton said it does not sound good when you read the figures out, but when you analyse them, it has a fait bit to do with underlying budget in relationship to assets and depreciation, which is no new thing around the table. “It’s not all as bad as it looks on the trade value,” he said. Agreeing with Cr Benton, Mayor Irene Grant said this had gone to the audit and risk committee, and they’re satisfied with moving forward with the financial statement, “We can be confident that council is working through all those issues,” she said. Mr Swart said council's focus remains on improving its underlying operating position through disciplined budget management, long-term financial planning and sound asset management practices. “Council is continuing work on its financial sustainability program and a report will be presented to councillors in December outlining how council intends to strengthen its long-term position," he said. “The work underway is focused on ensuring council can continue delivering services to the community, investing in important infrastructure and making the best use of available resources.” The Council Comprehensive Income Statement shows the total income for the last financial year decreased $8.48m, while total expenses increased by $8m. Explanations of some of the key changes between 2024/25 and 2025/26 resulting in the total income decreasing by $8.48m were rates and charges increased by $1.58m from $41.98m to $43.5m, primarily due to annual rate increases and growth in the rate base. User fees increased by $1.47m from $11.76m to $13.23m, operating grants decreased by $2.03m from $23.70m to $21.67m, primarily due to timing of recognition of grant funding. The 2025/26 result includes $8.1m of Financial Assistance Grants relating to the 2026/27 financial year. Capital grants decreased by $2.72m from $8.01m to $5.30m, largely due to delays in major capital projects and the associated recognition of grant funding which were carried over next year. Other income decreased by $2.03m from $4.74m to $2.71m, mainly due to lower movements in landfill restoration provisions compared with the prior year. Total expenses increased by $8.02m, some of the key movements between expense categories were employee costs increased by $0.95m from $33.59m to $34.54m, materials and services decreased by $1.87m from $29.40m to $27.53m. Other expenses increased by $8.48m from $3.93m to $12.40m.

Wangaratta council reports $11.6m deficit following $4.7m asset write-off and major settlement

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