Financial sustainability of local councils across the state was a focus of the Mayoral minute presented by Weddin Shire Council's mayor, Councillor Paul Best at Council's ordinary monthly meeting on Thursday, 17 April.

In his report, Cr Best said on 28 February he and the General Manager attended the Country Mayor’s Association General Meeting in Sydney.

The Auditor-General for New South Wales addressed the members prior to the release of the Local Government Audit findings.

The common thread amongst discussion was that financial sustainability is a concern for many councils.

"On this point, I am pleased that Weddin Shire Council submitted our documentation in a timely manner and received an unqualified opinion," Cr Best wrote in his report.

"I would like to thank our staff who have worked tirelessly over the past 18 months to get our finances, financial statements and modelling into our current position."

Cr Best said in the Council meeting that Weddin Shire was not ranked among the lowest performing councils for financial sustainability which is a really good result and their cash reserves were significant enough to cover at least three months of operating expenses.

Cr Best said they should note Council's balances do fluctuate as grants come in, so it's something they've got to be very cautious of and something he knows the staff worked tirelessly towards.

"I think our past cash breach that we had a few years ago prompted that self initiated plan which has been really successful," Cr Best said. "And I think the Office of Local Government is right behind us with that one as well.

"It's really like strengthened up our financial processes and led us to where we are today which is getting an unqualified audit report."

Cr Best said it is also important to realise that Council's funds aren't that great, but they are working towards building up their reserves.

"By the same token, I think you can see by every other council there's lots of other rural councils in the same boat as us, we're not the only one.

"It's something that you can see by how many councils are in deficit this year, as well more councils coming in a deficit situation every year so we've got to be very cautious about how we spend our money," he said.

Cr Best said spending Council's money is not just building up reserves, for reserve's sake, they have to spend the money to benefit the community and have the biggest benefit to community they can.

"I think that's really important for us as councilors to do that understand it's no good just having this good report which says 'we got we've got money', it's spending it wisely and making sure that we're doing the best for the community," he said.

"I don't want to have a community that we don't want to live in because we we've saved all the money and we haven't actually improved the services or repaired the buildings or whatever we need to do so that's all but I think it's a good result."

Councillor Jeanne Montgomery said the only other thing you could possibly say is how you spread the loan payments over generations so that it's not the current residents who and rate payers who have to wear the the cost of a loan to support infrastructure or council assets.

Weddin Shire Council General Manager Noreen Vu said she thinks it's really important to highlight on Council's budget and long term financial plan the reason why Council is in a deficit is around when grants come in.

"We had upfront payments with our regional emergency road repair fund that came in the previous financial year so we reseeded that income in that financial year but the expenditure is actually over multiple years up until 2027," Ms Vu said.

"So the money income has already been registered on the previous financial statement so on paper it looks like the expenses exceed the income that's actually coming in, because unfortunately for this financial year we haven't received as many grants as what we have previously received.

"We've received a large amount of natural disaster funding especially through our RMCC contract on the highways we've received a large amount of ordered works funding from that process as well," she said.

Ms Vu said that's actually really important to note because she believes when people think of the word 'deficit' they actually think it's current income and current expenditure.

"There's a lack of understanding around when you actually receive that income in that year."