Investments made in culture are not viable

Toomas Mattson | 12/21/2010 | 9:03 AM

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TALLINN, 21 December 2010 - The National Audit Office is of the opinion that the distribution of investments in the Ministry of Culture is not sustainable. The financial obligations and increase in operating expenses associated with investments are larger than the increase in the ministry’s budget or the outlook for future increase.

The financing obligations and additional operating expenses of the ten or so larger objects built or renovated in the last five years alone, which have taken 3.3% of the Ministry of Culture’s budget this year, will demand as much as 12% of the budget in 2014. At the same time, the Ministry of Finance confirms in the state’s budget strategy that no increase in the maintenance costs of state agencies is planned from 2011 to 2014.

This means that new buildings can be built and existing ones can be extended on account of the rest of the area of government. “The state keeps building new buildings in the cultural sector, but it makes no realistic plans about how to maintain them in the future,” said Tarmo Olgo, Audit Director of the Performance Audit Department of the National Audit Office.

The remaining agencies will have to cope with less money than in 2006 if the amount allocated to operating expenses and financial transactions in the budget of area administration does not increase by another 200 million kroons by 2014. “What’s the point of these posh buildings when all the news we hear from the cultural sector is that there is no money to pay people’s salaries or support their activities?” asked Olgo.

Distribution of the investments of the Ministry of Culture is not transparent. Guidelines are superficial and do not specify how investments are distributed. The National Audit Office also ascertained that the agreed procedure is not adhered to. The Ministry pays no attention to assessing the expedience of investments. The distribution procedure and the basis on which decisions are made cannot be observed and preliminary assessment and follow-up inspection of projects are insufficient. The control system cannot prevent breaches: Eesti Kontsert, for example, assumed unlawful financial obligations.

Audit Director Tarmo Olgo pointed out that the organisation of work in the Ministry of Culture needs serious changes, which is the responsibility of the secretary-general. “The Minister’s job is to work on policy; the secretary-general should be responsible for all administration and systems,” said Olgo.

The National Audit Office advised the Minister of Culture and the Minister of Finance to plan the establishment of new agencies and the expansion of existing ones only if a sufficient increase in the budget is guaranteed and the economic expedience of the planned activities is assessed. The Minister of Culture should update all investment distribution guidelines in such a manner that they contain the following: the requirement to inform people about application opportunities; the decision-making criteria; the principles on which the decision-making committee is formed; and documentation requirements; and all of these should comply with the requirements arising from the Administrative Procedure Act. The Minister of Culture should monitor that all persons who wish to apply for money can do so on an equal basis and that all applicants receive a proper response to their applications. Checking the use of investment support also needs to be more efficient.

The Minister of Culture admitted in her response that there are some shortcomings in the formal side of activities, but found that the impact of the omissions highlighted by the National Audit Office on the progress, cost or exploitation of cultural and sports objects has not been significant. The Minister of Finance agreed with the recommendations made by the National Audit Office and was prepared to assist in finding solutions to the problems.

Background

The National Audit Office audited the activities of the Ministry of Culture in the distribution and planning of investments and the checking of their use from 2005 to 2010 when more than 2 billion kroons was invested in sports and cultural objects. Most investment money has gone to state agencies.


Toomas Mattson
Head of Communication Service, National Audit Office
+372 640 0777
+372 51 34 900
toomas.mattson@riigikontroll.ee 

  • Posted: 12/21/2010 9:03 AM
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