VK noted that for the implementation of Latvian cultural policy, KM has an instrument – 14 capital companies, in which KM holds 100% of the capital shares and operates in the field of professional theatre and music art. The amount of the State budget grant for KM capital companies is increasing annually and amounted to EUR 40 million in 2023, representing 63% of their total revenue.
The VK carried out a follow-up audit to see whether the Ministry has implemented the recommendations made in the previous audit, in 2018.
VK concluded that no significant changes and improvements were achieved in the operation of KM in the management of capital companies.
Following the 2018 audit, the VK recommended that KM improve the process for obtaining and collecting data so that planning and implementation of cultural policy is based on full data on the actual market situation. Also in 2020, a study commissioned to study the situation of KM identified similar problems.
“Taking note of the last KM assessment on the preservation of state participation in its capital companies, it can be concluded that problems with data are still present and that the Ministry has not fully used the study to characterize the market situation,” State Audit representative Inga Vilka said.
VK concludes that the Ministry has tried to use the principles of good management practice of State-owned enterprises, however, it does not consider all conditions to provide society with confidence that the participation of a public person in a capital company is the most efficient way to ensure accessibility of the cultural offer to all residents of Latvia.
The auditors said that the recommendation made in the 2018 audit on the optimization of the administrative functions of capital companies remains relevant.
The new recommendations are aimed at obtaining and compiling data on the field of professional theatre and music art in Latvia, the availability of transparent and comparable financial and non-financial information regarding capital companies of KM, availability of services of capital companies of KM to different target groups of the society and evaluation of administrative capacity of capital companies of KM, VK said.
