The Art Gallery 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 operating result for the year was an Increase in Net Assets Resulting from Operations of $4.6 million which was a decrease of $1.4 million from the previous year.
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 control.
During 1999-2000 specific areas of audit attention included:
revenue including cash receipting and banking and bookshop operations
expenditure including accounts payable and salaries and wages
investments
general ledger
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.
The overall internal control environment was assessed as satisfactory although there were opportunities for improvement in relation to the management of attractive asset items.
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 the law.
Operating revenues for the year totalled $11.7 million ($13.1 million). Grants from the State Government totalled $5.5 million ($6.1 million). The following chart shows the major categories of operating revenues as a percentage of Total Operating Revenues.
Operating Revenues by Category
The chart reveals that grants from the State Government represent 47 percent of Total Operating Revenues which supports the view that the Board is dependent on the ongoing financial support of the State Government as expressed in Note 2(n) to the Financial Statements. Bequests and donations represent 33 percent of Total Operating Revenues (see Note 6 to the Financial Statements).
The written down value of Heritage collections at 30 June 2000 was $329.4 million. It is relevant to note that the Board has accumulated these assets over a significant period of time primarily through the use of Government funding, together with bequests and donations, without the need to borrow to fund these acquisitions.
The written down value of Property, plant and equipment at 30 June 2000 was $29.7 million of which Land, buildings and improvements amounted to $29.6 million.
The majority of the land and buildings constituting the Art Gallery of South Australia premises have been used for Art Gallery purposes for a considerable period of time. It is relevant to note that the Board does not have any long term liability in relation to these assets as control of these assets (the cost of which historically was borne by the Government) is vested in the Board by the Art Gallery Act 1939. Recent additions to the Art Gallery buildings have been funded through Government grants.