The most recent accounts for the company – which also runs the City Varieties and Hyde Park Picture House – show that it posted a deficit of £550,809 in the year 2012-13, up from £508,091 the previous year.
The 2013-14 accounts – which presumably prompted the bail-out – haven’t been published yet.
The company is owned by the council, but managed at ‘arms-length’ by a board made up of five councillors and four ‘independents’.
The accounts also throw some light on the alleged “misappropriation of funds” at the company that came to public light at the beginning of this year and led to three arrests.
Council loan to cover losses
According to the accounts, funds were misappropriated from the company over three financial years, from 2011-12 to 2013-14.
How much was involved?
I’m no accountant, but it looks like £46,310 went missing in 2011-12 …
… and the total? Well, I can’t work it out.
The £46,310 appears alongside an entry for “recovery of misappropriation of funds” for £103,250 for the year 2012-13. Whether there are further losses to be included in the 2013-14 accounts isn’t clear.
“Financial difficulties will not be turned around quickly”
The bail-out may have only been made public last week (see section 5.5.1 of this report for chapter and verse), but it seems clear from the accounts that the council agreed at the back end of last year (when the accounts were signed off) to provide a loan to cover the “misappropriated funds”.
The loan will only be repayable once the losses are recovered.
In the meantime the accounts admit that the company’s financial difficulties “will not be turned around quickly”, and a “robust financial plan” is being worked on to bring it back into profitability “in the medium term”.
Speaking to the Yorkshire Post today, council leader Cllr Keith Wakefield said it was clear that “we cannot accept the current governance arrangements” for the company.
Details of proposed new arrangements are expected to be released next week, ahead of a meeting of the cabinet on 16th July.
Worth noting then that it’s only eight years ago that the council commissioned “a fundamental review of the governance arrangements (of the company) … to assess a range of options … to ensure governance arrangements are fit for purpose”.
Back to the drawing board.