The Adelaide Entertainments Corporation, a subsidiary to the Minister for Tourism, was established on 4 February 1999 pursuant to regulations under the Public Corporations Act 1993.
The functions of the Corporation are limited by regulation to:
manage and operate the Adelaide Entertainment Centre (the Centre) site;
manage, promote and sponsor events at the Centre site or elsewhere;
foster and assist the commercial development of the Centre site in order to complement and enhance the commercial potential of the Centre;
carry out other functions conferred on the subsidiary by the Minister.
The following chart depicts the structure of the Corporation as at 30 June 2002.
The Schedule to the Public Corporations Act 1993 (the Act), requires the Adelaide Entertainments Corporation, established pursuant to section 24 of the Act, to keep proper accounts of its financial affairs and to prepare financial statements in respect of each year.
It further provides that the Auditor-General must audit the accounts and financial statements of the Adelaide Entertainments Corporation.
The audit program covered all major financial systems and was directed primarily towards obtaining sufficient evidence to enable an audit opinion to be formed with respect to the financial statements and internal control.
During 2001-02 specific areas of Audit attention included:
follow-up of action taken by the Corporation to the matters raised last year regarding Internal Audit Related activity and Policy and Procedures documentation.
review of financial accounting and related processes covering:
- revenue
- accounts
payable
- payroll
- inventory
- property,
plant and equipment
review of the following Information Technology activities:
- information
resource strategy and planning
- relationship
with outsourced vendors
- information
security
- business
continuity planning
An Audit management letter conveying the scope of the audit and audit findings was forwarded to the Chief Executive Officer of the Corporation. Matters referred to the Chief Executive Officer included:
opportunities to improve financial accounting and related processes;
the need for the Corporation to provide quarterly reports to the Minister for Tourism to satisfy requirements of the AEC charter and section 19 of the Public Corporations (Adelaide Entertainments Corporation) Regulations 1999;
opportunities to improve information security.
A satisfactory response was received to the matters raised.
The overall internal control environment was assessed as satisfactory.
Last year Audit commented on matters relating to Internal Audit activity and the documentation of policies and procedures. The Corporation advised it would address these matters during 2001-02. The status of these matters is as follows:
Last year Audit commented that the Corporation indicated that it would initiate an internal audit function in 2001-02.
Audit follow up revealed an internal audit activity had not been established during 2001-02 as this activity was ‘put on hold as it was seen to be optional to the performance of the business’.
The Corporation has advised that the Audit Committee will initiate the internal audit function and associated plans in 2002-03.
Last year Audit commented that the Corporation indicated that, with the implementation of its Event Business Management System (EBMS) nearing completion, a review of its policies and procedures will be prioritised in 2001-02.
Audit follow up revealed the Corporation had not reviewed its policies and procedures during 2001-02 as this activity was ‘put on hold as it was seen to be optional to the performance of the business’.
The Corporation has advised it will review its policies and procedures in 2002-03.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Adelaide Entertainments Corporation included an assessment of the controls exercised in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities.
Audit formed the opinion that the controls exercised by the Adelaide Entertainments Corporation in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, were sufficient to provide reasonable assurance that the financial transactions of the organisation were conducted properly and in accordance with law.
Without support from the State Government of $542 000, the Corporation would have recorded an operating deficit of $2.9 million ($2.1 million). The increased deficit reflects primarily a:
decrease in revenue of $364 000, which is mainly the result of reduced event activity during the year;
$434 000 asset write-off.
Corporation revenue (excluding Government appropriation) has over the past five years fallen from $6.7 million in 1997-98 to $5.4 million in 2001-02. Over this same period Corporation expenses have increased from $7.2 million to $8.2 million. The following graph illustrates these trends:
