Filenews 23 March 2021
Employees of a certain duration are converted into indefinite employees, the Audit Office says in its report, following a compliance check carried out by the Cyprus Symphony Orchestra Foundation, where it identified vulnerabilities in several areas of its operation.
Tax backlogs, administrative organisation with problems, employment issues that cover almost all staff and scholarships are some of the vulnerabilities identified in the audit.
Foundation operation
The Audit Office had recommended that the Ministry of Finance prepare a Financing Plan and evaluate the Foundation's procedures. The Foundation's strategic objective of increasing own revenue and reducing dependence on state sponsorship has not been achieved. In 2019 the Foundation received a state grant of €2,699,000, which represents 92.3% of total revenue.
Gaps and weaknesses have been observed, relating to the convening of meetings of the Board of Directors and the observance of minutes with the Audit Office to recommend the observance of detailed minutes of the meetings of the Board of Directors and their appropriate numbering, the preparation of an agenda, the signing of the minutes competently in accordance with the provisions of the Statute, the holding of meetings of the Board only when there is a quorum and the timely validation of the minutes.
Employment
Also, no Regulations have been prepared regulating the operation of the Foundation and defining the responsibilities and other terms of service of the Foundation's employees, in accordance with the provisions of the Founding Act of 2006 and the Financial Regulations have not been approved by the Board of Directors. Due to timeless mishandling of the Foundation's successive Board of Directors, the employment status of the Artistic Director (KD) of the Cyprus Youth Symphony Orchestra (SONK) and the SONK Curator was transformed from a certain duration to an indefinite period.
Gaps and weaknesses were identified in personnel matters relating, inter alia, to the granting of monthly travel allowances and allowances, the administrative structure of the Foundation, the evaluation of staff and the non-renewal of the Collective Agreements of the Administrative and Secretarial Staff and the Musicians of the Cyprus Symphony Orchestra (SOK), which expired on 31.12.2012 and 31.12.2010, respectively.
Fees
The exemption of the fees of the Music Academy, granted to the amount attributable to the students, in cases where there is financial difficulty in repayment, is based on the presentation of a certificate by the Social Insurance Services, concerning only one parent, with the result that in 2019 the exemption of tuition fees was granted in a case where the total family income was about €58,000.
Services
The agreement to provide legal counsel services with a specific law firm was interrupted by the Foundation one month after its renewal. A Letter of Commitment was subsequently signed with another law firm, without a decision of the Board of Directors. This Commitment was signed by an unauthorised member of the Board of Directors and does not include basic provisions such as delay clauses, termination of the contract and settlement of disputes.
The Foundation is not registered in the VAT Register, despite the fact that all of its annual transactions exceed the vat registration threshold, and that the Foundation receives services from abroad, for which the reverse debit mechanism is applied by the recipient of the services. We have recommended that the Foundation contact the Tax Department to clarify whether it has an obligation to register for VAT.
Foundation does not make the timely payment of the Artists' Tax to the Department of Taxation, so the Foundation is charged interest.
Concerts
Gaps and weaknesses were identified regarding the conduct of a concert with a Greek artist, such as arbitrary actions of members of the Board of Directors, non-approval of the Board of Directors for the selection of the artist, as well as a planned concert (which did not take place) with another Greek artist. The Office shall recommend that the members of the Board of Directors do not take decisions without the prior approval of the Board of Directors, the Foundation shall conclude agreements with a view to increasing its revenue and shall not be bound by the announcement of events prior to the signing of the relevant agreements.
