A million-dollar "error" in its last financial statement had to be corrected by Shellharbour City Council, according to a report from the NSW Auditor-General's report.
A council spokeswoman said the error, relating to the Shell Cove development, was due to an "accounting treatment change".
The Auditor-General's report included a list of corrected errors from all councils' June 2022 financial statements that were in excess of $50 million.
"[Shellharbour] council's review of its accounting for the Shell Cove project identified $117.9 million of marina assets controlled by the council, which had not been recognised in the financial statements," the Auditor-General's report said.
That was the second-largest error, the largest being Shoalhaven City Council's $288.6 million oversight after it "had not reflected the updated revaluation impacts on all infrastructure, property, plant and equipment asset classes".
The council spokeswoman said the $117 million figure related to the value of land subdivision and harbour earthworks at Shell Cove.
They stated the oversight arose from a change in the Audit Office's view of earthworks, now considering them as a "non-depreciable asset".
"The accounting treatment of earthworks derived from developer-contributed assets was consistent with previous accounting treatments agreed to with NSW Audit Office auditors in 2018," the spokeswoman said.
"Historically, developer-contributed earthworks such as land subdivisions and detention basins are not captured as assets across the Shellharbour local government area.
"Based on recently requested changes from the NSW Audit Office relating to Shell Cove, council amended its balance sheet to recognise developer-contributed earthworks assets within Shell Cove."
She said, as the earthworks did not attract any depreciation, the change did not "negatively impact" council's bottom line.
"The inclusion of $117 million of earthworks as an asset increases council's overall asset inventory on its balance sheet," the spokeswoman said.
"However, as the earthworks accounting treatment is non-depreciable it has no impact on council's building and infrastructure renewal ratio, and improves council's ability to meet infrastructure backlog ratios."
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Glen Humphries
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
