The State Theatre Company (the Company), a body corporate, established pursuant to subsection 5(1) of the State Theatre Company of South Australia Act 1972 (the Act), is administered by a Board of Governors.
The objectives of the Company are to:
present theatrical performances to promote the art of the theatre;
promote and commission the writing of works for theatrical performances;
promote the training of people concerned in the production, presentation and performance of theatrical works;
promote public interest and participation in the art of the theatre;
establish and conduct educational programs.
As the resident theatre company in the Adelaide Festival Centre the Company uses that facility for most of the year and occupies workshops and offices in the Centre. The Adelaide Festival Centre Trust charges rent for the use of its premises.
The structure of the Company is:
Box office and related revenues increased from $836 000 in 1998-99 to $1.4 million in 1999-2000, representing an increase of $603 000 or 72 percent.
As at 30 June 2000 the Company had a total funds deficiency of $119 000 ($122 000).
Subsection 26(2) of the State Theatre Company of South Australia Act 1972 provides for the Auditor-General to audit the accounts of the Company 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 box office sales and grants received
expenditure, including the payment of accounts and payroll
budgetary control and management reporting
investments
During the year, a management letter was forwarded to the Artistic Director communicating issues arising from the audit. A satisfactory response was received.
The primary matters addressed related to instances whereby authorisation of expenditure did not always accord with the approved delegations and supporting documentation was not always evident to support payroll calculations. The finalisation of policy manuals for each significant financial process was also raised with management, as has been the case in the previous two years.
As discussed under ‘Audit Communications to Management’ there were opportunities to strengthen the control framework operating within the Company. As with many other agencies, the requirement to formulate policies and procedure manuals is often neglected or lapses in the face of challenging priorities and resource constraints. It is, nevertheless, a fundamental management responsibility to display commitment to, and compliance with, the principles and practices embodied within the Financial Management Framework.
This and other control issues identified by Audit were assessed in the terms of the general control environment, which was found to be satisfactory.
A follow up review on the previous year’s audit, identified that the Company had implemented the majority of Audit recommendations aimed at ensuring the completeness of data entry and the security and integrity of the personal computer systems in operation. The need for documentation of systems operator and back-up procedures was reiterated by Audit in its 1999-2000 audit findings.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the State Theatre Company 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 State Theatre Company 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 Company recorded an operating surplus of $3 000 ($4 000). Operating revenues increased by $647 000 to $3.8 million, due mainly to the increased number of performances and seats sold during the year (refer ‘Further Commentary on Operations’). Correspondingly, production and play expenses increased by $202 000 to $1.3 million.
Grants from the State Government and the Australia Council decreased slightly by $48 000 to $1.9 million. The grants from the State Government for operating purposes are provided in accordance with section 28 of the State Theatre Company of South Australian Act 1972 (the Act). Section 29 of the Act, requires the Company’s budget to be approved by the portfolio Minister and expenditure can only be incurred in accordance with the approved budget.
The Company has an economic dependency in relation to the grants provided by the State Government and the Australia Council, as has been the case in prior years.
As at 30 June 2000 the Company had a total funds deficiency of $119 000, down from the previous year ($122 000).
Statistical details on productions for the last four years, as provided by the Company, are presented in the following table:
|
1999-2000 |
1998-99 |
1997-98 |
1996-97 |
Number of productions |
7 |
7 |
6 |
7 |
Number of performances |
161 |
144 |
162 |
166 |
Number of seats sold |
43 000 |
38 000 |
36 000 |
45 000 |
|
|
|
|
|
|
$ |
$ |
$ |
$ |
Total production expenses per seat sold |
81 |
77 |
78 |
77 |
Box office revenue per seat sold |
33 |
22 |
26 |
22 |
Subsidy per seat sold |
48 |
55 |
52 |
55 |