TALLINN, 3 February 2010 - It is the view of the National Audit Office that the system of distribution of activity and project support in the fields of music and theatre via the Ministry of Culture, the Estonian Cultural Capital and the Gambling Tax Supervisory Board is not efficient, since there is a significant overlap in objectives, target groups, supported activities and decision-makers between the three areas. Moreover, a number of provisions of legal acts are not being observed.

The Ministry of Culture, the Estonian Cultural Capital and the Gambling Tax Supervisory Board are the three main sources of support for national and private performing arts institutions and theatre and music projects. The National Audit Office primarily audited their 2008 activities, when a total of more than half a billion kroons was allocated to the field.
The Ministry of Culture is not following the Performing Arts Institution Act in its allocation of support to theatres and concert organisations. In the financing of concert activities neither substantive nor procedural requirements are being observed. The system developed for the funding of theatres does not conform to the basis set out in law.
Ministry of Culture programmes and support from the Estonian Cultural Capital and (to a lesser extent) the Gambling Tax Supervisory Board are in part being utilised as additional funding for national performing arts institutions. Thus it is impossible to obtain an overview of the amount that is actually being spent from the state budget on maintaining the performing arts institutions receiving funding.
The funding objectives that have been set are very general, as a result of which it is difficult for the National Audit Office to unequivocally evaluate the profitability of allocations. It is more important that procedural rules designed to ensure the legality and transparent allocation of support be in place and be observed. However, the National Audit Office found that there are significant shortcomings in the distribution of funding to the fields of theatre and music. The Administrative Procedure Act is not being followed in decision-making related to support, and neither is the basis of decision-making; justifications are also failing to be documented. The legality and suitability of decisions therefore cannot be evaluated, and equal treatment of applicants cannot be ensured. The Ministry of Culture has also granted support to applicants whose applications have exhibited shortcomings or who have not submitted reports.
The internal audit systems of the Ministry of Culture and the Gambling Tax Supervisory Board do not reduce the risks arising in the process of distributing funding. The principle of the separation of obligations is not being followed and no systematic checks are being carried out. The appropriateness of use of support is not being assessed or is not able to be assessed on the basis of reports on the use of funding.
The National Audit Office concluded that since the forms of support provided by the Ministry of Culture, the Estonian Cultural Capital and the Gambling Tax Supervisory Board are not clearly distinguished from one another, and since the auditing systems are not always capable of ensuring the legal and intended use of funding, there is insufficient reason to maintain three independent systems.
The agencies audited agreed with the majority of the recommendations made by the National Audit Office, although the Minister of Culture did not consider it necessary to amend the system for auditing the distribution and use of funding. The minister did not agree with the assessment of the National Audit Office that there is a conflict of interest in the auditing of the distribution and use of funding and that there is a lack of balance within the system.

Background information

In 2008 the Ministry of Culture granted almost one third of all of its allocations to performance and concert activities. The theatre field received a total of 227.7 million kroons in support, while the music field received 217.4 million kroons (of which 49% or 105.8 million kroons was operating support for the Estonia National Opera). A further 13.8 million kroons was issued as project support to the music and theatre fields during the year.
Support to the value of 49 million kroons was allocated to the musical and performing arts through the Estonian Cultural Capital in 2008 (26 million and 23 million kroons respectively). A total of 2230 applications were received, of which 1429 were approved.
Projects related to performance and concert activities received almost 1.5 million kroons in support from the Gambling Tax Supervisory Board in 2008. Funding was allocated to a total of 75 theatres and concert organisations.

Toomas Mattson
Communication Manager of National Audit Office
Telephone: +372 640 0777
Mobile: +372 51 34 900
[email protected]
 

• Posted: 2/3/2010 10:09 AM
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