15 March 2015

William Tieppo Director, City Services City of Greater Geelong 30 Gheringhap St

GEELONG VIC3220

Dear Mr Tieppo

SALEYARDS HISTORIC FINANCIAL PERFORMANCE

Crowe Horwath Melbourne

ABN 41 099 415 845

Member Crowe Horwath International

Level 17 181 William Street Melbourne VIC 3000 Australia GPO Box 4324

Melbourne VIC 3001 Australia Tel +61 3 9258 9551

Fax +61 3 9258 6722

We have completed our review of the historic financial performance of the Geelong Saleyard in accordance with our planning documentation provided to Council in February 2017.

Background and Scope

Council owns and operates a Saleyards facility which provides services to primary producers for the sale of livestock. The facility is operated as a separate cost centre within Council’s financial system.

Throughout the period of operation of the saleyards, Council’s Financial Statements, incorporating the saleyards results, have been subject to external audit as required by the Local Government Act 1989. This audit has been conducted by the Victorian Auditor-General either directly or through an agent appointed by the Auditor-General. While the external audit process does not provide specific assurance about the operations of the saleyards it does provide a level of assurance regarding the systems and processes within which the saleyards financial transactions are recorded.

Our review was undertaken in accordance with the Standard on Related Services ASRS 4400 Agreed Upon Procedures Engagements to Report Factual Findings as issued by the Audit and Assurance Standards Board. The objective of the review is to undertake the following agreed upon procedure:

  • For the periods 2005 – 06, through to 2015 – 16, agree the following information to Council’s underlying financialrecords:
  • Saleyardincome,
  • Direct Saleyard expenditure,and
  • Saleyard Asset valuation, capital works anddepreciation.

Methodology

In undertaking the agreed upon procedures we attended Council and reviewed the general ledger to confirm the cost centre and accounts relevant to the operations of the Saleyard, we then extracted details of revenue, direct operating expenditure and capital expenditure relating to the operations of the saleyard for the periods 2005-06 to 2015-16. Information was extracted directly from Council’s financial systems. Amounts extracted were then compared to those disclosed in the results section of this report.

Results of Agreed Upon Procedures

The following tables detail the results of our agreed upon procedures:

1.SaleyardIncome

Procedure:Agreed the following information to Council’s underlyingfinancialrecords: Result:

Financial Year / 2005/06 / 2006/07 / 2007/08 / 2008/09 / 2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14 / 2014/15 / 2015/16
Income
Activities & Programs Fees/General income / 253,175 / 283,240 / 154,061 / 146,645 / 146,098 / 114,665 / 115,908 / 156,567 / 172,589 / 183,469 / 169,906
Facilities - Casual hire / 1,380 / 1,380 / 1,380 / 1,580 / 1,580 / 1,496 / 1,755 / 2,066 / -61
Lease income / 7,548 / 7,824 / 8,304 / 8,304 / 12,384
Totol Income / 254,555 / 284,620 / 155,441 / 148,225 / 147,678 / 116,161 / 125,211 / 166,457 / 180,832 / 191,773 / 182,290

2.SaleyardExpenditure

Procedure:Agreed the following information to Council’s underlyingfinancialrecords: Result:

Financial Year / 2005/06 / 2006/07 / 2007/08 / 2008/09 / 2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14 / 2014/15 / 2015/16
Expenditure
Staf Costs incl allowances / 131,554 / 149,705 / 134,354 / 140,634 / 149,496 / 159,268 / 158,739 / 163,957 / 178,751 / 176,322 / 183,957
Traning & Development / 364 / 1,123 / 1,289 / 417 / (234) / 794 / 174 / 395
Contractors / 70,010 / 58,584 / 32,741 / 11,699 / 33,254 / 47,412 / 45,159 / 45,478 / 67,211 / 61,583 / 80,295
Dedicated Vehicles costs / 13,787 / 14,572 / 15,869 / 20,856 / 21,304 / 21,515 / 21,324 / 31,508 / 31,095 / 31,600 / 31,850
Depreciation / 38,662 / 40,325 / 41,266 / 25,209 / 27,551 / 28,728 / 29,147 / 27,887 / 25,521 / 58,151 / 62,367
Leases / 21,273 / 15,600
Utilities / 37,368 / 38,685 / 33,634 / 33,956 / 41,501 / 58,923 / 55,700 / 56,168 / 64,293 / 54,553 / 57,160
Internal other expenses / 2,929 / 1,330 / 1,247 / 1,004 / 3,581 / 1,156 / 1,187 / 1,183 / 972 / 207
Other Expense items / 29,447 / 27,963 / 36,410 / 29,989 / 14,302 / 14,526 / 7,862 / 7,823 / 7,061 / 15,124 / 11,439
Total Expenditure / 321,192 / 333,886 / 296,893 / 264,007 / 309,685 / 333,719 / 319,087 / 350,402 / 375,289 / 398,305 / 427,670
Net Balance / (66,637) / (49,266) / (141,452) / (115,782) / (162,007) / (217,558) / (193,876) / (183,945) / (194,457) / (206,532) / (245,380)

3.Saleyard CapitalExpenditure

Procedure:Agreed the following information to Council’s underlyingfinancialrecords: Result:

Financial Year / 2005/06 / 2006/07 / 2007/08 / 2008/09 / 2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14 / 2014/15 / 2015/16
Capital Works / 17,182 / - / 24,429 / 56,066 / - / 57,704 / - / - / 880,811 / 95,410 / 175,151

Liability limited by a scheme approved under

Crowe Horwath Melbourne Pty Ltd is a member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal

Use of Report

This report is intended solely for the use of the City of Greater Geelong. As the intended user of our report, it is for you to assess both the procedures and our factual findings to determine whether they provide, in combination with any other information you have obtained, a reasonable basis for any conclusions which you wish to draw on the subject matter. As required by ASRS 4400, use of this report is restricted to those parties that have agreed the procedures to be performed with us. Accordingly, we expressly disclaim and do not accept any responsibility or liability to any party other than the City of Greater Geelong for any consequences of reliance on this report for any purpose.

Yours sincerely,

Crowe Horwath, Melbourne


Martin Thompson Senior Partner