ART GALLERY BOARD
FUNCTIONAL RESPONSIBILITY AND STRUCTURE
Establishment
The Board
was established under subsection 4(1) of the Art Gallery Act 1939.
Functions
The
functions of the Art Gallery Board are:
·
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.
Structure
The
structure of the Art Gallery of South Australia is illustrated in the following
organisation chart.
AUDIT MANDATE AND COVERAGE
Audit Authority
Audit of the
Financial Report
Subsection
31(1)(b) of the Public Finance and Audit
Act 1987 and subsection 26(2) of the Art
Gallery Act 1939 provides for the Auditor-General to audit the accounts of
the Art Gallery Board for each financial year.
Assessment of
Controls
Subsection
36(1)(a)(iii) of the Public Finance and
Audit Act 1987 provides for the Auditor-General to assess 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.
This
assessment also considers whether those controls are consistent with the
prescribed elements of the Financial Management Framework as required by
Treasurer’s Instruction 2 Financial
Management Policies.
Scope of Audit
The audit
program covered major financial systems and was directed primarily to obtaining
sufficient evidence to enable an audit opinion to be formed with respect to the
financial statements and internal controls.
During 2005-06,
specific areas of audit attention included:
·
expenditure
including accounts payable and payroll
·
revenue
including cash receipting and banking and bookshop operations
·
property
plant and equipment
·
heritage
collection valuation
·
financial
management reporting.
AUDIT FINDINGS AND COMMENTS
Audit Opinions
Audit of the Financial
Report
In my
opinion, the financial report presents fairly, in accordance with the
Treasurer’s Instructions promulgated under the provisions of the Public Finance and Audit Act 1987,
applicable Accounting Standards and other mandatory professional reporting
requirements in Australia, the financial position of the Art Gallery of South
Australia as at 30 June 2006 and the results of its operations and cash flows
for the year then ended.
Assessment of
Controls
In my
opinion, the controls exercised by the Art Gallery of South Australia in
relation to the receipt, expenditure and investment of money, the acquisition
and disposal of property and the incurring of liabilities are sufficient to
provide reasonable assurance that the financial transactions of the Art Gallery
of South Australia have been conducted properly and in accordance with law.
Audit Communications to Management
The
results of the audit were satisfactory and no major matters were raised with
management.
INTERPRETATION AND ANALYSIS OF FINANCIAL REPORT
Highlights of Financial Report
|
|
2006 |
2005 |
Percentage |
|
|
$’000 |
$’000 |
Change |
|
INCOME |
|
|
|
|
State Government grants |
6 061 |
6 376 |
(5) |
|
Other income |
7 554 |
8 758 |
(14) |
|
Total Income |
13 615 |
15 134 |
(10) |
|
EXPENSES |
|
|
|
|
Employee benefits |
2 880 |
2 777 |
4 |
|
Other expenses |
6 895 |
7 477 |
(8) |
|
Total Expenses |
9 775 |
10 254 |
(5) |
|
NET RESULT |
3 840 |
4 880 |
(21) |
|
|
2006 |
2005 |
Percentage |
|
|
$’000 |
$’000 |
Change |
|
|
|
|
|
|
Net Cash Flows from
Operations |
2 943 |
4 470 |
(34) |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets |
4 490 |
3 892 |
15 |
|
Non-current assets |
629 206 |
579 208 |
9 |
|
Total Assets |
633 696 |
583 100 |
9 |
|
LIABILITIES |
|
|
|
|
Current liabilities |
2 176 |
983 |
n/a |
|
Non-current liabilities |
550 |
521 |
6 |
|
Total Liabilities |
2 726 |
1 504 |
81 |
|
EQUITY |
630 970 |
581 596 |
8 |
Income Statement
Income
Income for
the year totalled $13.6 million ($15.1 million). The decrease of $1.5 million is attributable
mainly to:
·
a
decrease of $1.6 million in the value of bequests and donations received this
year. Bequests and donations received in 2005-06 totalled $1.8 million ($3.4
million). The level of this source of
revenue is uncertain from year to year;
·
an
increase in donations of heritage assets of $343 000.
Grants
from the State Government represent 45 percent (42 percent) of income which is
consistent with the view that the Board is dependent on the ongoing financial
support of the State Government as expressed in Note 2.20 to the Financial
Statements.
Bequests
and donations represent 26 percent (32 percent) of total income.
A
structural analysis of income for the Board in the four years to 2006 is
presented in the following chart.
Expenses
Expenditure
for the year decreased by $479 000 to $9.8 million. The decrease is attributable mainly to:
·
a
decrease in supplies and services costs of $925 000. The principal item contributing to the
decrease is a reduction in the loss on sale of investments of $532 000;
·
an
increase of $454 000 in depreciation.
For the
four years to 2006, a structural analysis of the main operating expense items
for the Board is shown in the following chart.
Net Result
The net
result for the year was a surplus of $3.8 million ($4.9 million). The reduction of $1.6 million in bequests and
donations is the major contributing factor in the reduced surplus.
The
following chart shows the operating revenues, operating expenses and surpluses
for the four years
to 2006.
Balance Sheet
Current Assets
Cash Assets
The
following chart shows the movement in the Art Gallery’s cash assets over the
five
years to 2006.
Non-Current Assets
Heritage Collections
The Board
has accumulated these assets over a significant period of time primarily
through the use of government funding, together with bequests and donations. During the year, heritage assets valued at $1.8
million were donated to the Board.
The heritage
collections were revalued as at 30 June 2006.
This resulted in an increase of $45.2 million in the value of the
collections.