Arts Centre Trust Board Financial Misreporting Reported to Charities Commission.

Save Our Arts Centre announced today that it had reported the Arts Centre Trust Board to the Charities Commission for "misleading information in Annual Reports, and for significant failure to comply with legal financial reporting obligations".

"In addition, SOAC has asked the Commission for the Board to be required to re-publish corrected Annual Reports, and also consider whether the Board should be reported to the Institute of Accountants" said SOAC Spokesperson, Dame Ann Hercus.

SOAC today publicly released its letter to the Charities Commission, which raised “very serious issues” relating to financial reporting procedures adopted by The Arts Centre Trust Board, said Dame Ann.

"The facts are these. The Arts Centre Trust Board has two sets of accounts annually. First, a summary set of accounts in its Annual Report, which is widely circulated in hard copy and on its website. Secondly, it has a full and audited set of accounts which is not distributed or available on its website. To have two sets of accounts, one a summary of the other, is acceptable. The problem is that, in the Arts Centre Trust Board's case, the two sets of accounts are seriously inconsistent. In the two years of 2007 and 2008 [examined by SOAC as a sample] inconsistency is to the tune of millions of dollars in terms of reporting current assets.

In 2007, the widely distributed summary of financial reporting in the Board’s Annual Report shows current assets of $482,200 at 31 December 2007 while the full audited accounts for the same period show current assets of $4,691,723 a difference of over $4 million. That is a giant inconsistency.

Another example is in 2008, where the summary report shows current assets to be $482,206, while the full audited accounts for the same period, show current assets of $3,650,114, another huge difference of over $3 million”

As The Arts Centre Trust Board's public image is based in part on its Annual Report, (including for fundraising), it is absolutely unacceptable that the very widely circulated “summary” accounts in these Annual Reports should in effect understate its real current assets situation by millions of dollars. This is a Board falsely attempting to portray financial hardship, in my view, in a way that can be nothing else but misleading", said Dame Ann.

"Ken Franklin, Director of The Arts Centre, cannot claim a "defence" that the summary annual reporting is “voluntary’, or that it is using a new category of asset “investments” or that it has investments which are tagged for future use. The fact is that what The Arts Centre Trust Board is doing simply does not comply with the relevant legal financial reporting standards of FRS-39, and (later) FRS-43" she said.

"Not only is it seriously non-complying, it is seriously misleading. It is appalling stewardship particularly to the citizens of Christchurch who are entitled to accurate and consistent accounting , in SOAC's view" said Dame Ann

SOAC has requested the Charities Commission :-
-to take appropriate legal steps in relation to The Arts Centre Trust Board’s failure to comply with their legal obligations as to appropriate financial reporting, without inconsistencies
-to require the Board to republish its Annual Report Summary Statements in a format consistent with the audited financial statements
-to consider whether the matters raised should be brought to the attention of the Institute of Chartered Accountants
-to require the Board to file consolidated statements (as it has not yet done so)

ENDS

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