2.2 Financial Results 2.3 Working Capital 3.0 Management Letter 3.1  Fixed Assets Register Not Updated Residual Values  For the financial year ending 31 March 2018, the Authority  recorded a deficit of P6.54 million, compared to a deficit of P320 242 in the prior year. The increase in the deficit is due to the  increase in operating expenses.  Expenditure increased by 17% from P65.77 million in the prior year  to P76.88 million in the year under review. Significant increases  were noted in staff costs of P7.46 million and legal fees of P3.25  million. Income on the other hand increased by 7.5% from P65.45  million in the prior year to P70.34 million in the current year.  Income comprised:  The working capital position of the Authority as at 31 March 2018  showed current assets of P12.25 million and current liabilities of  P6.78 million, giving a net assets position of P5.47 million.  The following was the significant matter raised by the auditors  and the management response thereto:  The auditors noted that the useful lives and residual values of  some assets were not reviewed as required by International  Accounting Standard 16.  In response management stated that they would undertake an  audit of all assets in the fixed assets register and revalue those  assets without residual values. This would be done on a yearly  basis to ensure all assets that are still in use are properly valued.  186  P ’million Supervisory levies  45.04  Government Grants  22.86  Other Income  2.26  Finance Income  0.18 