LIBRARIES BOARD OF SOUTH AUSTRALIA

 

 

FUNCTIONAL RESPONSIBILITY AND STRUCTURE

 

Establishment

 

The Libraries Board of South Australia is appointed pursuant to the Libraries Act 1982 and is responsible for the administration of the State Library and the public libraries system.

 

Functions

 

The functions of the Libraries Board are as follows:

 

·                     Formulate policies and guidelines for the provision of public library services.

·                     Establish, maintain and expand collections of library materials.

·                     Administer the State Library.

·                     Promote, encourage and assist in the establishment, operation and expansion of public libraries and public library services by councils and others.

 

Structure

 

The structure of the Libraries Board 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 18(2) of the Libraries Act 1982 provides for the Auditor-General to audit the accounts of the Libraries 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 Libraries 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 salaries and wages

·                     shop operations

·                     revenue including cash receipting and banking

·                     risk management

·                     subsidy payments to public libraries

·                     research and heritage collections valuation.

 

 

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 Libraries Board 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 Libraries Board 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 Libraries Board have been conducted properly and in accordance with law.

 

Audit Communications with Management

 

Matters arising during the course of the audit were detailed in a management letter to the Director.  The response to the management letter was considered to be satisfactory.

 

 

INTERPRETATION AND ANALYSIS OF FINANCIAL REPORT

 

Highlights of Financial Report

 

	2006	2005	Percentage
	$’000	$’000	Change
INCOME
Government grants	27.7	27.7	-
Other income	2.9	3.4	(15)
Total Income	30.6	31.1	(2)
EXPENSES
Employee benefits	10	9.4	6
Subsidies to Public Libraries	11	10.5	5
Other expenses	10.8	10.2	6
Total Expenses	31.8	30.1	6
Net Result	(1.2)	1	n/a

 

	2006	2005	Percentage
	$’000	$’000	Change
Net Cash Flows from Operations	1	3	(67)
ASSETS
Current assets	2.8	3.8	(26)
Non-current assets	104	104.1	-
Total Assets	106.8	107.9	(1)
LIABILITIES
Current liabilities	2	2.2	(9)
Non-current liabilities	2.1	1.9	11
Total Liabilities	4.1	4.1	-
EQUITY	102.7	103.8	(1)

 

Income Statement

 

Income

 

Income from operations decreased by $416 000 to $2.9 million.  The decrease is mainly the result of a reduction in donations of $1 million, partly offset by an increase of $414 000 in interest and dividend income.  In 2004-05, donations included $601 000 from the State Library Foundation to fund a number of projects.

 

Note 2.19 to the Financial Statements states that the Board is dependent on the ongoing financial support of the State Government.  Grants from the State Government for operating and capital purposes totalled $27.7 million ($27.7 million).

 

A structural analysis of operating revenues for the Board in the four years to 2006 is presented in the following chart.

 

 

Expenses

 

Expenses increased by $1.7 million to $31.8 million.  The principal increases were:

 

·                     employee benefits $642 000

·                     subsidies to Public Libraries $514 000

·                     depreciation $541 000.

 

A structural analysis of the operating expense items for the Board is shown in the following chart.

 

 

Net Result

 

The net result for the year was a deficit of $1.2 million compared to a surplus of $987 000 in the previous year.  The variation was the net effect of an increase in expenses of $1.7 million and a decrease in income of $416 000.

 

The following chart shows income, expenses and surpluses/deficits for the four years to 2006.

 

Balance Sheet

 

The total assets of the Libraries Board at 30 June 2006 are $106.8 million, of which $53.6 million (50 percent) relates to the Libraries Board’s property, plant and equipment and $43.7 million (41 percent) relates to the research and heritage collections.

 

The Library’s liabilities at 30 June 2006 totalled $4.1 million ($4.1 million) of which $2.8 million ($2.6 million) relates to employee benefits.

 

Non-Current Assets

 

Research and Heritage Collections

 

Research and heritage collections purchased or donated during the year totalled $900 000.  The research and heritage collections were revalued as at 30 June 2006 (refer Note 2.10).  This resulted in an increase of $22 000 in the value of the collections.