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.
The operating result for the year was an Increase in Net Assets Resulting from Operations of $119 000 as compared to a Decrease in Net Assets Resulting from Operations of $205 000 in 1998-99.
Subsection 18(2) of the Libraries Act 1982 requires 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 coverage included:
expenditure including accounts payable and salaries and wages
property, plant and equipment registers
investments
subsidy payments to public libraries
research and heritage collections management.
During the year letters communicating issues arising from the audit were forwarded to the Director, State Library, and the Director, PLAIN Central Services with satisfactory responses being received.
The overall assessment of the internal control environment was satisfactory. There were, however, areas where Audit considered there was scope for improvement. Commentary with respect to these areas follows.
The audit of the management of the Board's Research and Heritage Collections indicated that there was room for improvement in the performance of regular confirmation of the existence of collection items. This issue was also raised by Audit in 1998-99.
In response the Board indicated that revised procedures will be implemented to ensure that the existence of collection items is undertaken on a regular basis. The Board has developed a number of projects for the period in which the State Library is being redeveloped. These include projects to streamline collection management and verification.
The audit of the property, plant and equipment registers identified opportunities for improvement in the performance of regular confirmation of the existence of attractive asset items and also the Video and Audio Book collection.
In response the Board indicated that the existence of assets would be confirmed on an annual basis.
The audit of payments to Public Libraries for Community Information Grants indicated that documentary evidence was not always available to support certain aspects of the calculations of grant amounts. This issue was also raised by Audit in 1998-99.
In response the Board indicated that negotiations are currently underway to establish a new funding agreement for public libraries which will incorporate new funding formulas.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Libraries Board of South Australia 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 Libraries Board of South Australia 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.
The operating result for the year was an Increase in Net Assets Resulting from Operations of $119 000 as compared with a Decrease in Net Assets Resulting from Operations of $205 000 the previous year. The turnaround of $324 000 was due mainly to an increase in Operating Grants from the State Government of $2.2 million offset by an increase in Employee Costs of $871 000 and an increase in Administration Expenses of $940 000.
Grants from the State Government for operating and capital purposes and receipts from the State-Local Government Reform Fund totalled $26.1 million ($23.8 million) and account for 91 percent (90 percent) of Total Operating Revenues. As expressed in Note 2(m) to the Financial Statements the Libraries Board is dependent on the ongoing financial support of the State Government.
The written down value of non-current assets was $84.7 million of which $64.2 million relates to Research and Heritage Collections. Property, plant, equipment and public library research collections account for the remaining $20.5 million. Land, buildings and improvements with a written down value of $17.4 million is the main component of this remainder.
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 and without the need to borrow to fund the acquisition of these assets.
Note 2(b) to the Financial Statements refers to the exclusion of the operations of the State Library of South Australia Foundation and the Friends of the State Library from the financial report of the Board. This action was based on legal advice that the Board does not control these two organisations and therefore the provisions of Australian Accounting Standard AAS 24 ‘Consolidated Financial Reports’ no longer apply. The effect of this exclusion was to reduce the Net Assets and Accumulated Surplus of the Board as at 30 June 1999 by $1.9 million. Both of these bodies are associations incorporated pursuant to the Associations Incorporations Act 1985 and are audited by private sector auditors.