Opportunities for Obtaining Additional Funds in the Field of Culture

In the diploma thesis, the author presented public institution x – its operations, legal regulation, and sources of financing. Public institution x is a non-profit organisation, established in the public interest in the field of culture. In the following chapter, she established that the public institution is an indirect budget user, a designated user of the uniform chart of accounts. In accounting, it is necessary to comply with numerous laws and other regulations that directly or indirectly determine the methods of operation.

Problem

In the diploma thesis, the author presented public institution x – its operations, legal regulation, and sources of financing. Public institution x is a non-profit organisation, established in the public interest in the field of culture. The purpose of its operation is not to generate profit, but to provide cultural services for society as a whole and for individuals.

Public institution x belongs to small legal-organisational forms. It is an independent legal entity, but does not have its own assets. It only manages the assets, whilst the owner of the assets is the founder.

Public institution x obtains funds for its operation from various sources. The most significant share is represented by funds obtained from public sources and own revenues from performing public service activities. Public institution x in the field of culture must obtain a large share of funds to cover public service programmes from other non-public sources.

It succeeds in this primarily by seeking donors and sponsors, by implementing pedagogical and andragogical programmes, by collaborating with other cultural, educational, tourism, and economic institutions, both at home and abroad. It also actively seeks opportunities for co-financing programmes and projects from EU budget funds and budgets of other EU member states. Of exceptional importance for the operation of public institution x is obtaining funds for additional employment on the basis of calls for employment programmes.

Public institution x has for many years successfully applied in calls for implementing employment programmes of public works, and in the last year also in calls for employment programmes from European Social Fund resources. The competent ministry has not approved funds for additional employment for public institution x in the last fifteen years, nor are positive changes in this area expected in the future. However, needs are evident in all departments of the institution – due to the nature of the work and increased scope.

For public institution x, it is important to have a well-organised accounting service. The latter must participate in preparing the financial part of documentation for advertised programmes. Once the funds are obtained, it must carry out all phases of accounting and ensure the provision of accounting data and information to internal and external users.

The accounting of public institution x is based on knowledge of regulations in the field of accounting, in the field of public finance, in the field of activity, knowledge of regulations in the field of levies, and labour legislation. At the beginning of the diploma thesis, she presented public institution x in the field of culture. She established that the public institution in question is a non-profit organisation, belongs to small organisations, and the institution's bodies are the director and the institution's council.

The founder of the institution is the local community, whilst the predominant funder is the competent ministry. The public institution does not have its own assets; it only manages the assets. It generates profit only from commercial activity, and the share of this activity is negligible.

It is the central museum-gallery institution in north-eastern Slovenia in the field of fine and visual arts. It engages in research and exhibition activities.

Solution and Method

• separate recording of public service activities and commercial activities
• separate recording of public service activities and commercial activities according to the invoiced realisation principle and according to the paid realisation principle (cash flow principle)
• depreciation of buildings that are cultural monuments is not calculated, depreciation of equipment is carried out at the expense of funds under management, depreciation of small inventory is carried out upon acquisition at 100 per cent
• planning: the public institution does not plan profit; the generated difference between revenues and expenditures may only be allocated to activities, on the basis of the founder's consent
• preparation of the balance sheet – the public institution offsets receivables and liabilities to the founding municipality and receivables and liabilities of budget users of the founding municipality
• calculation of corporate income tax only for taxable activity (commercial activity)
• calculation of salaries:

Results

In the following chapter, she established that the public institution is an indirect budget user, a designated user of the uniform chart of accounts. In accounting, it is necessary to comply with numerous laws and other regulations that directly or indirectly determine the methods of operation. Regulations change too quickly, are supplemented, in some cases are adopted but only applied in parts, or are amended before they begin to be applied (Public Sector Salary System Act).

If I compare the accounting of a public institution and a commercial company, I identify specific features: the basis for calculating the director's salary is the salary grade in which the director is classified on the basis of the Regulation on Directors' Salaries, past service amounts to 0.3 per cent of the basic salary; the basis for calculating salaries of employees under the collective agreement is the starting salary for salary grade I, past service is 0.5 per cent for men, for women up to and including 25 years of service 0.5 per cent, for each completed year over 25 years of service it is 0.75 per cent; the basis for calculating salaries of employees under the public works programme is the minimum wage in the Republic of Slovenia, past service is not calculated. In the continuation, she researched the sources of financing of the public institution and established that public institution x in the field of culture obtains funds for operation on the basis of direct invitations, public invitations, public calls, and by implementing its own activities.

It obtains funds from the state and municipal budgets, from EU budget funds, from non-public sources for implementing public services, and by implementing commercial activities. Over the years, the method of work of the public institution has changed, and with it the needs for additional financial resources. Exhibitions are no longer projects with simple hanging of paintings; rather, the exhibited works must be presented in an innovative, interesting manner, numerous accompanying programmes must be organised (pedagogical and andragogical programmes, workshops, performances), and events (lectures, organised tours, round tables, meetings with artists and exhibition authors).

All these events would not attract the interested public to such an extent without communication (printed invitations, posters, e-mail, public relations). All of the above requires additional financial resources and staff reinforcement; unfortunately, the criteria for financing from the state budget have not changed substantially in the last decade. In this chapter of the diploma thesis, she established that public institution x in the field of culture can, in addition to sponsorship and donor funds, obtain own funds for implementing the programme by implementing pedagogical and andragogical programmes and by collaborating with other institutions – domestic and foreign.

To fill the staffing gap, it can apply for employment under the public works programme and for European Social Fund resources. From performing commercial activities, the public institution expects a larger share of funds after the renovation or extension of facilities. The renovation has been planned for several years; realisation seems closer than ever before, also due to the candidacy of the city of Maribor for European Capital of Culture.

In the final part of the diploma thesis, she researched calls for EU funds for cultural programmes and projects. She established that the Culture 2007–2013 programme has been announced. On the basis of the aforementioned programme, she presented individual sections of the programme, call conditions, call documentation, presented the results of the call for 2007, and established that Slovenia is not the most successful in drawing funds.

In Section 1.2.1 and 1.2.2, it was successful only in the field of books, reading, and translation; four translation projects were approved; in Section 1.3 Cultural Cooperation with/in Third Countries, it was successful in the call with two projects. I attribute the reasons for such a result to the findings stated in the summary of the analysis. "Every culture is born from mixing, from mutual influence, from confrontation. And conversely, in isolation civilisation dies." Octavio Paz

• if the public institution is liable for value-added tax calculation, it is necessary to calculate and take into account the deductible share of input VAT
• analysis and supervision is an important function of accounting also due to various sources of financing
• one person is employed in the accounting department of the public institution, covering all areas of work of the accounting service and preparing accounting information for internal and external users, therefore good computer and software support is necessary.