A run of six straight surpluses for the Waitaki District Council has come to an end.
An unaudited draft report tabled at an additional council meeting this week shows an operating deficit of $1.302million.
The first deficit since the 2012-13 year was in large part due, council accounting manager Ian Wells' report states, to $1.6million of assets abandoned or decommissioned - and written off - through the completion of the water supply pipeline to Moeraki, upgrades in South Hill, Oamaru, and other large 3 Waters projects.
However, it was an Office of the Auditor-general decision that Mr Wells focused on in his report.
Waitaki District Health Services Ltd was directed to include the operations of the Observatory Retirement Village in its annual report.
"This has a flow-on effect to information that would need to be included in council's group financial result," he writes.
"None of the affected entities agree with this ruling and are exploring options to get the decision reviewed.
"If the decision stands, it will significantly affect both the content and format of council's group and the Waitaki District Health Services group financial reports for both the current and previous financial years. To further complicate the process, the accounts of the retirement village entities must be fully audited for all periods since their inception before this consolidation can be undertaken.
"This will delay both the completion of the group accounts and the final audits, which will have serious implications for council's ability to meet its statutory reporting deadlines."
Council finance and corporate development group manager Paul Hope, who presented the report to the council this week told councillors despite the deficit "we are in a very strong financial position".
Mr Hope said the Office of the Auditor-general decision affected staff workload, meeting the reporting deadline, getting audit clearance - but "more importantly" he was concerned by "the potential lack of clarity it will introduce into the annual report".
Under questioning from Cr Jan Wheeler he said with the Observatory Retirement Village Trust's inclusion, it was possible the Waitaki Whitestone Geopark Trust would also be included.
Council chief executive Fergus Power said the Office of the Auditor-general decision was "disappointing" and the timing - when the decision was relayed to the council - was "really poor".
