Manager of finance Jacqui Thomas said the "really positive result" for the year ending June 30 was far higher than the adopted budget surplus of $3.38 million.

She said a large factor in that $3.35 million difference was $2.7 million in financial assistance grants for the 2022-23 year being paid in advance.

The council also saw a $1.5 million favourable decrease in depreciation expenses which showed the condition of assets - particularly roads - were in a better condition than predicted.

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While the debt-free council's report notes "all key financial indicators remain generally strong", south-central ward councillor Jo Beard was cautiously optimistic.

"Although it looks like we've done really well and we're sitting on a heap of money, it's actually allocated money," she said.

"Even though it looks amazing in black and white that we've got this massive surplus, it's usually balanced and that comes down to the fine and tight oversight our finance team continually have year after year that I think our ratepayers can be really satisfied with.

"Corangamite Shire is doing its due diligence around the spending and management of money. The fact we can continue to report we've got a great and strong working capital ratio is fabulous.

"Times are going to get tough as we move into the future ... It's great that we can reflect a good outcome for this last year term but we also need to be mindful of continuing to live within our means."

It's expected the surplus will go towards working capital or be used to manage rising inflation associated with large projects across the shire including the Port Campbell Streetscape, 12 Apostles Trail and Unlocking Housing in Simpson and Timboon.

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