By Vivienne Russell | 27 April 2012
Arts Council England has had its financial statements qualified after auditors said more than £9m in grant payments anticipated as National Lottery spending were instead paid from government grant-in-aid.
Comptroller and auditor general Amyas Morse qualified his audit opinion on the both the Arts Council’s grant-in-aid financial statements and Lottery financial statements for 2010/11.
Since the Lottery began, there has been a clear separation between grant and Lottery funding, and separate financial statements are prepared accordingly.
Auditors found that, during 2010/11, £9.2m in grant-in-aid money was used to fund activities that had previously been Lottery funded. Under the rules, as the payments had originally been identified as Lottery commitments, they should have continued to be included in the Lottery financial statements. However, they were included in the grant-in-aid statements instead.
‘As a result, grant-in-aid expenditure has been materially overstated by £9.2m in the 2010/11 grant-in-aid financial statements and understated by £9.2m in the 2010/11 Lottery financial statements,’ the National Audit Office said.
But it also noted a lack of clarity in the guidance from the Treasury and the Department for Culture, Media and Sport in respect of the use of grant-in-aid funds to meet Lottery commitments. The departments have agreed to review the guidance.
A spokesman for Arts Council England said: ‘The Arts Council notes the opinion of the National Audit Office. However, it is important to emphasise these payments did not breach grant-in-aid conditions and the DCMS and the Treasury have agreed that these payments did not require their approval.
‘The payments did not affect the total level of funding any of the projects received, with only the source of the funding changing.’
Arts Council England has had its financial statements qualified after auditors said more than £9m in grant payments anticipated as National Lottery spending were instead paid from government grant-in-aid.
Comptroller and auditor general Amyas Morse qualified his audit opinion on the both the Arts Council’s grant-in-aid financial statements and Lottery financial statements for 2010/11.
Since the Lottery began, there has been a clear separation between grant and Lottery funding, and separate financial statements are prepared accordingly.
Auditors found that, during 2010/11, £9.2m in grant-in-aid money was used to fund activities that had previously been Lottery funded. Under the rules, as the payments had originally been identified as Lottery commitments, they should have continued to be included in the Lottery financial statements. However, they were included in the grant-in-aid statements instead.
‘As a result, grant-in-aid expenditure has been materially overstated by £9.2m in the 2010/11 grant-in-aid financial statements and understated by £9.2m in the 2010/11 Lottery financial statements,’ the National Audit Office said.
But it also noted a lack of clarity in the guidance from the Treasury and the Department for Culture, Media and Sport in respect of the use of grant-in-aid funds to meet Lottery commitments. The departments have agreed to review the guidance.
A spokesman for Arts Council England said: ‘The Arts Council notes the opinion of the National Audit Office. However, it is important to emphasise these payments did not breach grant-in-aid conditions and the DCMS and the Treasury have agreed that these payments did not require their approval.
‘The payments did not affect the total level of funding any of the projects received, with only the source of the funding changing.’
