6.3 Heritage assets

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Museums and art galleries are an important part of our communities, and their collections represent a vital public inheritance. Public museums and galleries, and a number of private ones too, rely heavily on local authority funding to meet their operational and capital costs. Funding these bodies is one important way in which local authorities demonstrate their commitment to the cultural well-being of their communities.

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A museum’s collection is at the heart of its everyday work, and critical to the services it provides to the public. As part of our 2005-06 work programme we carried out a performance audit that examined the management of heritage collections in a selection of local museums and art galleries.

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This was a major project, involving a number of audits in small and large museums and art galleries. Our report, published in April 2006, summarises the findings from those audits, setting out the requirements for responsible collection management, describing good practices, and raising issues for consideration by museums and galleries.³

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The report is also directed at local authority managers and councillors. It explains the context in which collections are managed, shows how collection management supports the core activities of a museum or gallery, and illustrates the relationship between collection activities and the range of services delivered by a museum. It also seeks to promote an understanding of the resources needed to meet the obligations of responsible stewardship.

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Museums and galleries generally had in place the necessary components for sound collection management. We also found room for improvement. Matters directly relevant to local authorities include:

• consideration of areas where additional funding would strengthen capability and the quality of collection management;
• the need for meaningful standards and performance measures for reporting; and
• more systematic oversight of funding agreements.

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We are concerned at the financial reporting of most collections. Current New Zealand financial reporting standards require collection assets to be recognised in financial statements. However, there is a lot of non-compliance with this requirement by the museums and galleries that we audit.

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It is interesting to note recent international developments in accounting for heritage assets, the main development of which is a discussion paper issued by the United Kingdom’s Accounting Standards Board and the International Public Sector Accounting Standards Board.⁴ That paper includes proposals that are quite closely aligned with current New Zealand financial reporting requirements. We will continue to observe international developments.

3: Management of heritage collections in local museums and art galleries, ISBN 0-478-018153-1.

4: This is available at www.frc.org.uk/asb/technical/projects/project0066.html.