Solvency a 'major risk' at National Gallery, cash flow is a problem: audit report
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Solvency a 'major risk' at National Gallery, cash flow is a problem: audit report

The National Gallery of Australia has cash flow problems and solvency was considered a "major risk" in February this year, an auditor's report has found.

The gallery has also used government funding that was meant to be used for acquiring and maintaining new works to prop up its operating budget.

The National Gallery of Australia has been criticised in an audit report.

The National Gallery of Australia has been criticised in an audit report.

The Australian National Audit Office released a report into the management of national collections at the National Gallery and the War Memorial, revealing that the high risk financial position of the gallery has adversely affected the way it maintains its cultural assets, including antiquities and artworks. The value of the collections across the two institutions is $7 billion, with $6 billion of that at the gallery, the report said.

The report comes just two weeks before incoming director Nick Mitzevich is due to take on the helm of the troubled institution.

The report said the NGA's "planned conservation activities exceed the current resources allocated by management" and that strategic direction at the gallery was poor. A strategic review in August 2016 found "Council members were not clear about the NGA’s vision, quoting them as stating 'It is a
bit fuzzy'".

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The gallery has played down the findings in the report, with Assistant Director Adam Worrall saying they are not a surprise and that they are already working on some of the changes recommended.

"There has never been any issue with solvency in relation to the gallery," he said.

"It was added to the risk register so that it was something that everyone in the institution would be aware of when we were doing our forward planning. The ANAO has seen it as a major issue, but it's really something that any responsible institution, or any responsible business, that was looking at a forward plan or doing forward planning would actually add."

"There's never been an issue with solvency at the gallery, and it's not a secret that the NGA and many arts organisations in this country are grappling with budget issues."

The Max Ernst installation "Habakuk" when it was new to the gallery in 2007.

The Max Ernst installation "Habakuk" when it was new to the gallery in 2007.Credit:Karleen Minney

The report found that a 4.5 metre, 1.2 ton sculpture worth $4.5 million had been moved outside the gallery in 2016. In January 2017 staff reported that Habakuk, by Max Ernst, was moving in winds from a storm. A report undertaken in June of that year recommended that it be moved by August in order to avoid being outside during strong Spring winds. The engineering report said the sculpture was “unsafe in its current location,” but it was not moved until February 2018.

The rate of damages and other incidents spiked in 2015-16 and 2016-17 at the gallery, from 53 incidents in 2014-15, up to 167 in the following year and 171 in 2016-17. A rehang of artwork, vandalism in the sculpture garden and weather events contributed to the increase. Just under 10 per cent of the incidents were caused by water damage, both to works on display and in storage.

Mr Worrall also said that the uptick in incidents of damage to works was related to changes in the way the incidents are recorded.

The gallery was allocated $16.6 million in last month's federal budget for capital works to repair the building, and a further $4.9 million from the Department of Communication and the Arts "to address the high risk issues directly relevant to the care and safety of the collection," the gallery said in its response to the report.

“The facade and the roof of this building are 40 years old and heritage and require a bit of work, and that funding is now going to allow us to fix them,” Mr Worrall said.

“If you come to the gallery on a day when it's raining, there are buckets on the floor in public spaces, and that's just a fact.”

“We know where the major leaking parts of the gallery are, and works of art have been removed from all of those locations, so while we haven't had water damage, we've had a work get splashed, but really that's not an issue for the gallery ongoing.”

The report also comes just months after revelations that sister institution the National Portrait Gallery will have to close for six months in 2019 while major repairs are carried out on the 10-year-old building.

The Australian War Memorial fared better in the report, but it did find that the memorial's collection development plan had been out of date for five years and that there was no plan in place to identify or prioritise its conservation activities. The memorial agreed to four recommendations, including that its frameworks for managing collections be improved and its acquisition plan also be improved.

Sally Whyte is a reporter for The Canberra Times covering the public service.

Sally Pryor is a reporter at The Canberra Times.