IN SHORT: 

Carrathool Shire Council's second quarter budget review for 2025/26 confirms a consolidated net operating surplus before capital grants and contributions of more than $4.6 million, with total cash and investments at 31 December 2025 of $43.18 million. 

The investment portfolio of approximately $42.8 million is spread across multiple financial institutions including CBA, Bendigo Bank, Westpac, NAB and IMB, with the responsible accounting officer certifying that all investments comply with council policy and the Local Government Act. 

Councillors noted concerns about the potential for higher risk arising from a lack of diversification within the portfolio. 

While its neighbour Central Darling Shire was appearing on the NSW Auditor General's watchlist of financially vulnerable councils at the same time, Carrathool Shire Council was reviewing a financial position that reads more comfortably than most local governments in the state could claim. 

The second quarter budget review for 2025/26, presented to the February ordinary meeting, confirmed that the council's consolidated adopted operational plan showed a net operating surplus before capital grants and contributions of $4.626 million for the full financial year. After the vote variations proposed for the second quarter, that figure adjusts marginally upward to $4.643 million for the consolidated funds.

The general fund alone is tracking toward a surplus before capital of $4.379 million. The investment portfolio backing those figures is substantial. 

At 31 December 2025, the council held total cash and investments of $43.18 million across its various funds. 

Of that total, $42.98 million was held in term deposits and on-call investment accounts spread across CBA, Bendigo Bank, Westpac, NAB and IMB, with the remaining balance held in the main transaction account. 

By 31 January 2026 the total investment portfolio had settled at approximately $42.84 million, with a combination of interest earned and reinvestment activity through the month. Director of Corporate and Community Services Robert Rayner certified that all investments have been made in accordance with the Local Government Act 1993, the relevant regulations and council's own Investment Policy 019. 

The policy sets exposure limits by credit rating of the institution involved, capping single-entity exposure at levels ranging from 10 per cent for unrated authorised deposit-taking institutions to 50 per cent for major banks and highly rated entities. 

One flag raised in the financial reports relates to diversification. 

The investments schedule noted that a lack of diversification within the portfolio has the potential to create higher risk for the council, an observation that council has been aware of for some time and which is expected to inform future investment decisions. 

The current allocation sits heavily with Westpac at approximately 27 per cent, IMB at 28 per cent and NAB at 22 per cent of the term deposit portfolio, with CBA and Bendigo Bank making up the balance. 

While all institutions involved are within policy limits, the concentration at the upper end of the permitted range is the source of the concern. 

The council also approved the sale of nineteen properties across the shire where rates and charges have remained unpaid for more than five years, with total outstanding amounts of $271,885.71 across properties in Gunbar, Merriwagga, Hillston, Rankins Springs, Carrathool, Wallanthery and Roto. 

Council has increased its impairment provision for rates and charges from $98,246 to $168,246 to reflect the realistic collectability of those debts.