Dubbo council still financially strong

It did not meet the benchmark for one newly-introduced performance measure, its 2014 independent audit revealed.

But Luka Group partner Jeff Shanks said results in other areas of the council were "strong" and Dubbo was at or near the top of comparisons with similar councils.

Overall the council was going well and had just one area out of 10 to do some work on, he said.

The changes to performance measures were made by the NSW government as it began reforms of the local government sector.

The government says more than one-third of state's councils are facing financial problems.

The ramifications of its Fit For the Future package formed part of Mr Shanks' audit presentation to the council's most recent meeting.

The package had six operating performance ratios and four infrastructure performance measures for councils, he said.

"Effectively they are a shift of the goalposts," he said.

The experienced auditor said they had seen some "slides" in some areas where Dubbo was not performing as well as previously, and that was because the goalposts had been changed.

For the "brand new" operating performance ratio, a deficit of 6.96 per cent was outside the benchmark of 0 per cent.

The ratio had been adversely affected by the federal Financial Assistance Grants not being paid in advance, Mr Shanks said.

He said that moving into the Fit For the Future era it was important to have a balanced budget before the addition of capital grants and contributions.

Those capital items took Dubbo council from a $6.57 million deficit to a final result of $13.6 million surplus in 2013-14.

In comparisons with Armidale, Bathurst, Orange, Tamworth and Wagga, Dubbo was second best for the own source operating ratio, the third best for unrestricted current ratio and at the top of the list for the cash expense cover ratio.

During the questions session, Councillor John Walkom raised a financial sustainability review completed by Professor Percy Allan and his team in 2010.

The audit firm partner said the council had done a lot of work since obtaining the report, and yesterday said the infrastructure backlog was down to an estimated $10.8 million this year.

"In the past councils in general tried to use infrastructure backlogs as a way to gain further government grant funding," Mr Shanks said.

"And now with the changing of the goalposts, backlog is being used against councils for being sustainable in the future."