Arts Council Malta said today has taken on board the National Audit Office’s report and has welcomed its recommendations to improve its financial systems.
A National Audit Office report noted on Tuesday that for the past two years, Arts Council Malta (ACM) did not prepare its Financial Statements, and has also found that credit control was weak.
The report notes that considerable procurement was being undertaken through direct orders. It states that there was a backlog in bank reconciliations, and a number of shortcomings impinging on accountability.
“Some of the recommendationsmade in the report have already been implemented following the audit back in July”, said Arts Council Malta executive chair Albert Marshall in a statement.
ACM’s external auditors are currently finalising the 2016 Financial Statements which should be completedby end of December 2018. Work on the financial statements for 2017 is ongoing and will be finalised by the end of April 2019.
Board meetings have been held regularly throughout 2018 and the next board meeting, which will be held in two weeks’ time, will bring the number of board meetings for 2018 to the number required by law. During 2019 the Council will ensure that the Board meets on a regular basis.
Arts Council Malta’s central task is that of effectively funding, supporting and promoting the cultural and creative sectors in Malta. The Council also acts as a centre of gravity for the various public cultural organisations.
Recent reports circulated in the media following the publication of the National Audit Office report flagged some shortcomings in the Council’s internal financial systems. However, while the Council has noted all the recommendations in the report, some clarifications also need to be made, the statement said.
For instance, with regards to debts, the figure of Eur325,586 does not relate to debts but to debtors - which are amounts receivable by the Council, not owed by the Council. As reported by the NAO, the Council has already decreased the amount outstanding from Eur653,838 as at 31 December 2017 to Eur325,586 as at 30 June 2018. This equates to a very satisfactory collection ratio of 50%. Moreover, it must be noted that 83% of all the amounts receivable by the Council (debtors) are due from other Government entities/departments. To date, this figure has been further reduced to Eur300,973, a collection rate of 54%, the council said.
One of the main issues flagged in the report was the issue of direct orders. Arts Council Malta’s intrinsic work is mainly of an artistic nature; consequently, all procurement related to artistic nature is performed through the direct order procedure. This is fully permissible, accepted as good practice and in accordance with the Government Public Procurement Regulations. It is also the practice adopted on an international basis by all ACM’s counterparts abroad.
Moreover, it needs to be pointed out that the NAO Audit includes the figures of another two entities, Żfin Malta and PjazzaTeatruRjal. These two entities are under Arts Council Malta’s administration for cost effectiveness and non-duplication of work.