An evaluation of the budgeting process within Maltese public cultural organisations

Abstract

Purpose: This study combines elements emanating from budgeting, the public sector and the creative sector to form an overview of the budgeting process across public cultural organisations in Malta. It analyses how the public sector remit of public cultural organisations affects their budgeting as well as how accounting practices used in budgeting are transposed in organisations involved in arts and culture. Design: In order to meet the research objectives, a qualitative research method was adopted. Due to this research’s exploratory nature, face-to-face semi-structured interviews were deemed as the most apt research instrument to collect primary data. Interviews were held with representatives from the Budget Affairs Division, Arts Council Malta and all public cultural organisations studied, including accounting practitioners, budgeting officials and creative sector participants. Secondary sourced knowledge was used to build the literature review, design the interview schedule and analyse the findings from the interviews. Findings: The budgeting processes of the nine public cultural organisations studied share commonalities through the adoption of the bottom-up approach. Throughout the process, the limiting factor is the government allocation of funds as public cultural organisations prove to be highly dependent on it. Furthermore, budgeting is done within the context of the public cultural organisations’ own understanding of a strategy, albeit sharing in the central government’s cultural policy. As government entities, public cultural organisations are held accountable and have to follow public sector regulations with Public Procurement Regulations affecting their budgeting process the most. As creative sector organisations, public cultural organisations emphasise the use of a programming budget, the relevance of the role of the artistic director, specific challenges and performance indicators. The cohesion between the financial and artistic sides of the organisation is presented as being critical to maintain. Conclusion: This dissertation highlights the importance of budgeting even within the creative sector as the latter aspires for further growth. Budgeting provides a means of planning and control to better use public resources and actualise artistic visions. Value: Apart from the recommendations presented, this study also contributes in addressing the lack of published knowledge linking budgeting with the arts. Subsequently, it also helps to promote the creative sector as an area for future accountancy research.