The South Australian Film Corporation was established pursuant to the South Australian Film Corporation Act 1972.
The main roles the Corporation performed during 1999-2000 were the:
provision of financial assistance for developing and producing films and videos;
promotion of a South Australian film/video industry.
The structure of the Corporation is shown in the following diagram:
During the year the Corporation received a further $1.5 million from the South Australian Government. This was paid into the Revolving Fund which is to be used to provide loans to film productions. Refer Note 29.
Income from Arts SA for film development decreased by $1 million.
Subsection 31(2) of the South Australian Film Corporation Act 1972 provides for the Auditor-General to audit the accounts of the Corporation 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 the auditable areas included:
accounts payable
distribution of returns receipts and payments
accounts receivable
general ledger
studio inventory
asset register
receipting and banking
budgetary control
salaries
investments and loans.
During the year a letter communicating issues arising from the audit was forwarded to the Chief Executive Officer and a satisfactory response was received.
An assessment of the extent and nature of the Corporation’s internal control structure, conducted as part of the planning process, considered the levels of controls to be generally satisfactory.
That assessment was supported by the substantive testing of transactions throughout the financial year which did not reveal any material errors.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the South Australian Film Corporation 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 South Australian Film Corporation 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 Corporation achieved an operating surplus of $1.5 million the same as the previous year.
The decrease in income of $839 000 is due principally to the Corporation receiving a reduction in film development income of $1 million during 1999-2000. This reduction is due in part to the Corporation receiving a one off special allocation in 1998-99 for the production of a television series. (Refer Note 23).
The decrease in expenditure of $843 000 is mainly attributable to the amortisation of film investments and loans expenditure being $827 000 lower than last year. This is a direct result of the decrease in film development income which has resulted in a decrease in investments in film production of $903 000.
In viewing the recorded operating result for the year it is important to have regard to explanations provided in Notes 1.2, 2 and 6 concerning expenditure and commitments under the Corporation’s film development program. Commitments entered into at 30 June 2000 amounted to $829 000.
The difference between grant income and expense does not necessarily reflect in the operating surplus of the Corporation as amounts of unsecured loans/investments are amortised each year. In 1999-2000 $1.5 million was amortised, as compared to $2.3 million in the previous year.
Note 25 records the dependency of the Corporation on annual appropriations of funds from the Government. Program grants are either expensed in the year they are made or are provided as unsecured loans or investments.