Tuesday, 17 January 2012

New revelations from Salzburg

More news from the Austrian Rechnungshof, which is positively bee-like in its Fleiß. And in this case, news that presents rather more cause for concern than the sensible salaries paid to the likes of Dominique Meyer. After a year-long audit of the Salzburg Festival – the impetus for which came from the recent financial scandal that shook the Osterfestspiele – the Rechnungshof has been stinging in its criticism. Chief of the audit office Josef Moser travelled to Salzburg today to hold a press conference in which he claimed that the festival’s management is hopelessly out of date in its attitudes to corporate governance, and that ‘when you look at their organizational framework, they don’t even meet the requirements for an association [Verein] responsible for managing finances of one million euros.’ (Salzburg finances last year totalled 50 million). Ouch.

There is an extensive press release in which, reading between the lines, Moser all but accuses the festival’s management of gross incompetence. Here are the highlights:

  • The law which governs the festival’s funding doesn’t bother to mandate things like due diligence
  • There’s no internal control system for things like asset management, IT, insurance, procurement, inventory, and business travel
  • Irregularities – reading between the lines here  – are generally not brought to the attention of the board of trustees, who know to look the other way when they are
  • Their IT, to put it bluntly, is crap
  • The annual accounts of the festival do not give a true picture of assets and earnings (direct quotation)
  • Fixed assets aren’t valued correctly
  • In two financial statements public funds were not accounted for in full
  • The festival doesn’t bother to make calculations of foreseeable costs not yet paid out (i.e. pensions, severance pay, unused leave etc.)
  • Estimates for ‘decorations, stage scenery, costumes, wigs and masks’ are wildly inaccurate – margin of error +/- 40%
  • 6.83 million euros of fees for artists are paid out in cash, contrary to festival policy
  • The accountant who prepares the festival’s financial statements is also their tax consultant

The Rechnungshof follow up with their 99 recommendations for solving these problems. The reaction from the festival’s president, Helga Rabl-Stadler, is that they have already implemented many of these (could be true, though that is what everybody who gets criticized by the Rechnungshof claims).  Unsurprisingly, governor of Salzburg Gabi Burgstaller is sticking up for her. The press release is here, and the full report, in all 177 pages of its mind-numbing glory, here.

Image credit: Salzburger Festspiele  

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