The Board was established under subsection 4(1) of the Art Gallery Act 1939. A body corporate, the principal functions of the Board are to:
undertake the care and control of the Art Gallery and of all the lands and premises placed under the care and control of the Board;
undertake the care and control of all works of art, exhibits and other personal property acquired for the purposes of the Art Gallery;
assist in the promotion and supervision of art galleries, and collections of art, and any body or association established for the promotion of art within the State.
The organisational structure of the Board is:
Land and buildings were revalued during the year resulting in a revaluation increment of $2.3 million.
Subsection 26(2) of the Art Gallery Act 1939 provides specifically for the Auditor-General to audit the accounts of the Board in respect of each financial year.
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 controls established by the Board.
During 2001-02 specific areas of Audit attention included:
revenue including cash receipting and banking, and bookshop operations
expenditure including accounts payable, and salaries and wages
investments
property, plant and equipment including the adequacy of asset register maintenance
collection management.
An audit management letter conveying the scope of the audit and related findings was forwarded to the Director, Art Gallery. A satisfactory response was received to the matters raised in that letter.
The overall internal control environment was assessed as satisfactory.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Art Gallery Board 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. The assessment also considered whether those controls were consistent with the prescribed elements of the Financial Management Framework as required by Treasurer’s Instruction 2 ‘Financial Management Policies’.
Audit formed the opinion that the controls exercised by the Art Gallery Board 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.
The operating result for the year was a Surplus from Ordinary Activities of $3.7 million, compared with a surplus of $3.8 million in 2000-01.
Expenditure for the year increased by $1.2 million to $8.7 million.
Revenues from Ordinary Activities for the year totalled $12.4 million ($11.3 million). This includes grants from State Government of $6.2 million ($5.3 million).
Grants from the State Government represent 50 percent of Revenues from Ordinary Activities which supports the view that the Board is dependent on the ongoing financial support of the State Government as expressed in Note 2(o) to the Financial Statements. Bequests and donations represent 22 percent of Revenues from Ordinary Activities.
The following chart shows the major categories of Revenues from Ordinary Activities as a percentage of total revenues.
Revenues from Ordinary Activities by Category
The written down value of property, plant and equipment increased by $1.9 million to $31.2 million. This increase is mainly attributable to the revaluation of land and buildings at 30 June 2002 which resulted in a revaluation increment of $2.3 million.
The Board was granted an exemption by the Treasurer from compliance with Accounting Policy Statement APS3 ‘Revaluation of Non-Current Assets’ which requires non-current assets to be revalued every three years. The heritage collections, which were due to be revalued as at 30 June 2001, will now be revalued as at 30 June 2003 (refer Note 2(g)).
The value of Heritage Collections increased by $5.8 million to $338.9 million. The valuation methodology applied to the Heritage Collection is explained in Note 2(g). The Board has accumulated these assets over a significant period of time primarily through the use of government funding, together with bequests and donations.
Payables at 30 June 2002 totalled $1.6 million of which $1.5 million relates to amounts owing for artworks purchased during the year.