ACW Lottery Division Funding Policy Directions and Statement of Compliance:
The principal functions of the Arts Council of Wales in relation to its National Lottery distribution activities are set out in the Directions issued by the Secretary of State for Wales under Section 26(1) of the National Lottery etc Act in 1993 as amended by the National Lottery Act 1998 in conjunction with the Financial Directions and the Statement of Financial Requirements.

2000-01 is the sixth full year of ACW's Lottery distribution activities. The second financial direction states that ACW Lottery Division must have a procedure for handling conflicts of interest. This procedure, together with an annual statement of compliance, is provided to the Secretary of State for Wales. Details of related party transactions for the year 2000-01 are set out in note 13 of the Lottery Distribution Account which can be obtained free of charge by writing to the Council's Finance and Resources Director. New policy directions were issued by the Secretary of State for Wales on 9th July 1998 and replaced those previously in operation. The main themes of these directions are: · the need to move away from the previous bias towards capital funding, to give a greater emphasis to people, activities and access; · the importance of applying a strategic approach and, within that, of ensuring a fair geographic spread, where possible using Lottery funding to encourage regeneration and reduce deprivation; · the significance of sustainable development; · the role of Lottery distribution in opening up new opportunities for children and young people; · the benefits of making partnership funding requirements more flexible by linking them to applicants' ability to raise funding and other support, giving greater prominence to the use of volunteer time and in-kind contributions; and · the vital importance of collaboration and joint working, with other distributors and other bodies. As required by the National Lottery Act 1998, the Arts Council of Wales submitted a Strategy to the Secretary of State for Wales, which was approved in August 1999 by the National Assembly for Wales. Specifically under the 1998 Directions, the Arts Council of Wales must take into account the need: · To ensure that money is distributed for projects which promote the public good or charitable purposes and which are not intended primarily for private gain All applicants for Lottery money need to demonstrate how their project will benefit the public. Many projects offer a direct benefit in increasing access to or participation in the arts such as improving a building, purchasing a set of instruments or providing a series of workshops; other projects offer a more indirect benefit through, for example, the establishment of a National Touring Agency for Wales. · To ensure that ACW considers applications which relate to the complete range of activities in respect of which it has power to distribute money, taking into account · ACW's assessment of the need for the development of the art and arts activities and ACW's priorities for addressing them. The widest possible range of arts activities were funded during the year from dance, drama, music, literature and visual arts to video, multi-media, circus, folk and pop music. Appendix A1 shows the proportion of grants for each art form. · the need to ensure that all regions of Wales have access to funding. Much of ACW's work in stimulating applications from particular areas has been aimed at achieving a justifiable spread of Lottery money by region and by artform, as well as by size of grant and status of organisation. Appendix A2 shows the numbers of grants and amount of money distributed throughout Wales. · the scope for reducing economic and social deprivation at the same time as creating benefits for the arts and arts activities. Some significant awards were made with this express purpose, for instance a grant of £98,000 to Artworks Cymru Ltd. to develop arts activity in the Amman Valley, and £36,000 to Ystradgynlais Miners Welfare and Community Hall towards a sustainable, accessible and participatory programme of community arts activity in Ystradgynlais, Powys.
· To promote access to the arts for people from all sections of society ACW promotes access to the arts through its Capital and Revenue "Arts for All" schemes. Grants have been awarded to a wide range of groups including some working with homeless people, disaffected young people, multicultural and ethnic minority cultural groups and hospital patients. ACW's published guidelines for the Arts for All scheme set out three main objectives: to increase access and participation and opportunities for training in the arts. 326 grants were offered in 2000/01 under this scheme. ACW also promotes its Fast Track mechanism, allowing a response to be made to applications for Capital between £2,000 and £10,000 or Arts for All between £1,000 and £5,000 within 8 weeks. The Super Fast Track mechanism, for revenue grant applications between £250 and £1,000, which has been running very successfully for over two years, provides an even quicker and simpler route for groups from all sections of society to access Lottery funds, with funding decisions made in one month. Recent examples of arts lottery funding to encourage social inclusion are the re-opening of the Cwmaman Institute and investment in the Prince's Trust-Cymru's Sain Byw pilot programme. ACW has recently published its first cultural diversity strategy, which encourages and prioritises support for arts activities within Black and Ethnic minority communities and artists.
· To promote knowledge of, and interest in, the arts by children and young people A number of key awards were made that will specifically benefit children and young people e.g. many awards were made directly to schools. Most of these awards gave children an opportunity to work alongside a professional artist. · To further the objectives of sustainable development A number of smaller awards were made this year towards projects with an environmental focus, including the following: - £4,800 to Ysgol Gynradd Cae'r Felin to construct a sculpture trail park with 2 and 3 dimensional ceramic work. - £5,000 to Sustain: Environment, Art, Community to undertake a November 5th project involving craft workshops culminating in a procession and fire sculpture in Machynlleth, Powys.. - £4,300 to Ysgol Craig y Don for work with an environmental artist to create sculptures from local materials, on school grounds and local beaches. - £1,829 to Carmarthenshire County towards a programme of arts based workshops on the theme of biodiversity.
· To consider the needs of projects relating to film and the moving image, especially the need to foster sustainable structures by supporting development, distribution and promotion as well as film production A variety of film projects were funded during the year. 15 grants totalling £935,211 were given in total towards the production of feature films, shorts, animated films, script development and print. · To consider the needs of projects relating to crafts In 2000-01, ACW awarded 15 grants totalling £18,385 towards crafts based projects including £2,900 to Antur Cwm Taf/Tywi towards a three month pilot project to teach craft skills by means of lectures, demonstrations and workshops. · To consider the need for money to be distributed only to projects where they are for a specific time-limited purpose Three schemes, all time limited, are available. The Capital scheme is for building projects, public art or one-off instrument/equipment purchases. The Film scheme is for the development or production of a film. The Arts for All scheme funds discrete projects for up to a maximum of three years and, from 2000-01 onwards can also provide further support for the same activity provided that additional conditions are met. · For applicants to demonstrate the financial viability of the project and - Where Capital funding is sought, demonstrate the need for a clear business plan beyond the period of the grant, incorporating provision for associated running and maintenance costs. The financial viability of capital projects, and their effect on the long-term stability of the organisation, are carefully considered by ACW and its assessors as part of the application of the published criteria. In many cases this has meant that the ability of the applicant to secure funds for running costs from other bodies, particularly local authorities, has been crucial in establishing the viability of projects - In other cases, consideration should be given to likely availability of other funding to meet continuing costs for a reasonable period after receipt of Lottery funds. Taking into account the size and nature of the project, and for Lottery funding to be used to assist progress towards viability beyond the period of the grant wherever possible. For capital grants both existing and new facilities are assessed as to their future viability. For new facilities it is possible to add 'kick start' finance into the application that can assist with viability in the early years. For Arts for All grants, where it is expected that the project will continue beyond the end of the funding period, a viable 'exit strategy' is required. · The desirability of supporting development of long term financial and managerial viability of organisations in the arts (to be taken into account in conjunction with Direction H). ACW has not to date introduced a stabilisation scheme, however ACW will review its position as part of a wider consultation on the next phase of its joint Lottery and Grant-in-Aid strategy. · For projects to be supported by a significant element of partnership funding, and/or contributions in kind, from other sources, commensurate with the reasonable ability of different kinds of application, or applicants in particular areas, to obtain such support Partnership funding requirements are normally a minimum of 25% for applications over £100,000 for Capital schemes and a minimum of 10% for Arts for All applications and Capital applications up to £100,000. ACW applied its partnership funding requirements flexibly according to the circumstances of each application, taking into account financial need of the applicant and the level of economic and social deprivation of the location of the project, if applicable. Many grants were offered in advance of partnership funding being in place, so that Lottery money could be used as leverage for raising other funds. It is ACW's policy to insist that partnership funding should be in place before any Lottery money can be released except in very exceptional circumstances. · For the desirability of working with other organisations, including other distributors, where this is an effective means of delivering elements of its strategy ACW is an active member of the DCMS Coalfields Action Group that has prepared a UK-wide action plan to improve the take-up of Lottery grants in coalfield areas. The DCMS Coalfield Action Group includes all UK Lottery Distributors, National Assembly for Wales, Scottish Executive and representatives of the Coalfields Communities Campaign and the Coalfields Regeneration Trust. ACW is currently jointly funding a major capital project with the Heritage Lottery Fund. It also worked with the HLF on the refurbishment of the Centre for Visual Arts. UK Lottery distributors have established a joint telephone hotline and website to assist any individual or organisation wishing to apply for Lottery funding. Common branding of all UK Lottery awards to increase public awareness is currently being agreed. ACW is a member of Cymru'nCreu that aims to bring together all agencies working in the field of culture. ACW is a member of the Joint Lottery Distributors Wales group, which is undertaking the following joint initiatives: - Establishment of joint communications group to improve all-Wales Lottery funding information and strategic targeting of cold spots. - Joint Wales Lottery Distributors publicity leaflet, which was launched at the National Eisteddfod. (This launch had been delayed due to the cancellation of the Urdd Eisteddfod and Royal Welsh Show due to the Foot and Mouth outbreak). - Joint Wales Lottery Distributors stand at National Eisteddfod. First of a series of joint promotions. - Joint targeting of common cold spots through shared information on individual cold spots. Consideration of further strategic cold spot targeting via prioritisation of a 'named' local authority area. · The need to ensure that its powers to solicit applications under section 25(2A) are used in pursuit of its strategic objectives (as revised 14 August 1998) A framework has been developed to clarify how solicitation may be employed and the roles of those involved. · To acquire such information as necessary to make decisions on each application, including independent advice where required ACW Lottery Division routinely consulted art form and regional divisions or external expert bodies on all applications, other than those below £10,000 Capital, and £5,000 Arts for All. In the case of applications over £100,000 ACW employed at least one external assessor to carry out appraisals of individual projects. Major capital projects are normally assessed by four external advisers. Performance against objectives in Lottery Strategy: As required by the National Lottery Act 1998, ACW Lottery Division considers applications in the light of its Strategy. The table below summarises our strategic targets and the out-turn figures for 2000-01. Area of Intervention Target Out-turn Capital grants- new or refurbished facilities Awards that will facilitate 100,000 attendances and 25,000 participant sessions. 651,000 Attendances75,000 Participant sessions New attenders and readers Awards that will facilitate 300,000 new attendances between April 2000 and September 2001. 878,000 Targeted Community Development Projects Establish six per year. Six established in 2000-01 Young people Awards that will facilitate 50,000 participant sessions. 38,000 Participation Awards that will facilitate 200,000 participant sessions. 468,000 ACW publicised the availability of Lottery funds widely through press coverage, distribution of scheme guidelines and the presentation of talks, seminars and road shows to a wide range of arts and community groups throughout Wales. A total of 645 applications were received during the year. All applications are considered on their merits and evaluated against published criteria. Guidelines to Applicants: ACW publishes guidelines which explain fully how it will assess applications for Lottery funding, and details the application procedure which includes details of our current Lottery strategy. In accordance with ACW's policy regarding openness and accessibility, ACW has obtained a Crystal mark from the plain English campaign for our main scheme guidelines. We are planning to extend this to our application forms during 2001-02. A list of additional guidelines available to applicants is given in Appendix B.

Applications, Commitments and Grants :
The Lottery Division received 645 (2000: 757) applications in the year of which 173 were for capital schemes, including 44 for film production , and 472 for Arts for All schemes, including 21 awards to colleges towards funding for dance and drama students and 4 for Millennium Festival schemes. In total 492 (2000: 529) offers of grant were made amounting to £13,904,000 (2000: £17,856,000) of which £10,758,000 were capital grants, including £935,000 for film, and £3,146,000 were Arts for All grants, including £211,000 for awards to Dance and Drama colleges and £89,000 for Millennium Festival schemes. Commitments (i.e. grants accepted but not yet paid over) at the end of the year amounted to £29,019,000, of which £23,903,000 were for capital grants and £5,116,000 were for Arts for All grants.
The attached tables and charts (Appendices A1 - A2) show the spread of those grants analysed by artform and region. Appendices A3 and A4 further analyse the regional distribution of Capital and Arts for All grants.
Projects which have been offered £100,000 or more of Lottery funding are as follows: Organisation Amount(£) Area of benefit Description Wrexham County Borough Council 3,954,915 Wrexham Creation of a new performing arts venue adjacent to the Wrexham Library Arts Centre.
Theatr Mwldan 1,600,000 Ceredigion A major development programme involving improvements and an extension to Theatr Mwldan and the conversion and refurbishment of the Bathhouse outbuildings into a media centre.
Newport Theatre and Arts Centre 996,600 Newport The construction and equipping of a theatre and arts centre. The main facilities include a 450 seat auditorium, a 150 seat studio theatre and dance studio. Community facilities comprise rehearsal rooms, artists' studios, art gallery and recording studio.
CADMAD 606,300 Cardiff Purchase of land in order to build a multicultural arts centre
Wyeside Arts Centre Ltd 316,440 Powys Essential work on the refurbishment of the cinema and roof of Wyeside Arts Centre Ltd. Kasander Company 250,000 Across Wales Feature Film Production "The Tulse Luper Suitcase"
Siriol Productions 250,000 Across Wales Animated Feature Film Production "360"
Pioneers Arts Ltd 135,000 Valleys A three year project to be held in eight schools in the Heads of the Valleys area from Ystradgynlais across to Ebbw Vale. The project is for the children at these schools to create large scale art works; to produce a series of newsletters about that work;
Dawns Dyfed 118,529 Mid & West Wales An 18 month project to complete the development of a community dance provision throughout the counties of Carmarthenshire and Pembrokeshire. .

Grants awarded in excess of £5 million
To date ACW have offered two grants involving £5m or more of ACW Lottery funding. These are the offers of £8.325m to the Wales Millennium Centre for the creation of a multi purpose arts and entertainment centre and £6.5m to build a new theatre and arts centre in Newport. During the year a further £996,600 was awarded to the Newport Theatre and Arts Centre. Wales Millennium Centre: Construction of a new world-class venue for musicals, opera, dance, exhibitions, entertainment and education. The WMC will also be a home to a number of arts organisations including Welsh National Opera, Diversions Dance Company, Hi-Jinx Theatre, Academi, Welsh Amateur Music Federation and the Touch Trust. This project has been subject to a number of delays. The ACW awarded the project an additional £1.5m in 1999/2000. However during 2000/2001 the National Assembly for Wales approved the plans for the Wales Millennium Centre, subject to a cap on the Total Project cost of £92m. WMC are now negotiating with the preferred contractor. Newport Theatre and Arts Centre: The construction and equipping of a new theatre and arts centre. The main facilities include a 450 seat auditorium, a 150 seat studio theatre and dance studio. Community facilities comprise rehearsal rooms, artists' studios, art gallery and recording studio. Significant improvements have been made to the design and architecture of the building on the advice of ACW's external assessor, however as a result of the additional design work necessary the project has been delayed which led to an increase in the project cost. As a result, during 2000/01 the ACW awarded an additional grant of £996,600 as towards these costs. Financial and Monitoring Procedures: Existing procedures continued in place, and a satisfactory internal audit was carried out in January 2001. In accordance with the Statement of Financial Requirements, the National Audit Office checked a sample of project appraisals carried out during the year. Monitoring Activities: To satisfy the Statement of Financial Requirements, ACW must establish } the twin procedures of monitoring and evaluation to enable ACW to be satisfied that: · resources are being used for the purposes for which the grant was given, · projects represent value for money, · projects and schemes are delivering the benefits identified on the application form, · assets are being used for the purpose for which they were intended.. ~ ACW carries out project monitoring using a number of methods: · appointment of external monitors for large building projects, · assessment of financial information provided during the payment stage, · the use of self certification through the completion of standard monitoring forms, · visits by ACW monitoring officers, · annual monitoring review meetings by Lottery officers, and · attendance at events by ACW members and officers. For sizeable building projects ACW requires that payment is released in accordance with terms laid down in a legal contract to ensure that the project progresses smoothly and is signed off at pre-determined stages. The first contract of this nature was drawn up for the Wales Millennium Centre (total ACW grant £9.83m) and contracts have been drawn up for all projects in excess of £500,000. In addition, external monitors with expertise in project management, architecture, quantity surveying or arts management and development are appointed to report to ACW on the progress of large building projects from the development stage through the letting of contracts to completion of the building phase. Project monitors are appointed to ensure that the building is delivered on time, within budget, and such that quality is maintained. During 2000-01 project monitors were appointed or continued in their monitoring role for a number of building projects, most in excess of £100,000. Monitors are also appointed to oversee smaller projects on a case by case basis. Larger projects monitored during the year included the following: · Wales Millennium Centre, total ACW grant £9.83m, where the monitor continues to be closely involved in monitoring the planning and developmental stages of the project. · Cwmaman Public Hall and Institute, total ACW grant £1.85m, where the project monitor has been closely involved with monitoring the development of the project and the equipping of the facility within the project budget. The first stage of development was completed in June 2000 and the hall opened in July 2001. · Makers Guild in Wales, total ACW grant £560,000,where an architect has been appointed to ensure that the recommendations regarding architectural issues raised during the assessment are carried out. · Newport Arts Centre - Project Monitor has continued to monitor the project as it continues through the development stage, and prepares to let the major contracts. · Llanover Hall - Project completed on time and within budget. New extension was opened January 2000. During 2000-01 ACW sent out 479 self certification forms, 86 to Capital grant recipients and 258 to Arts for All grant recipients. These are sent out to all projects where the final payment has been made and ask the recipient to confirm that the project was completed in line with the objectives stated in the original application form. A Total of 300 forms were returned (63 Capital and 237 Arts For All). The outcome of this monitoring activity was as follows: OUTCOME Number Satisfactory 266 Repayment requested 34 Requires further monitoring 0 TOTAL 300 ACW monitoring officers pursue non-returns vigorously and aim to visit all organisations where returns are still not forthcoming. Organisations who fail to supply monitoring information will not receive further ACW Lottery grants. During 2000-01 the officers of the Monitoring Department were only able to perform 8 monitoring visits. This fell short of our annual target and was entirely due to workload factors and a lack of staff resource. As part of its restructuring the Council is in the process of revising the way in which the Monitoring function is organised with a view to delivering an improvement in the number of monitoring visits to be carried out from 2001-02 onwards. The results of the visits that were undertaken were recorded on standard detailed monitoring forms. ACW visit a random selection of all completed projects plus all projects where a risk has been identified. In addition, all projects that have failed to submit self-certification forms will be visited. These visits were largely satisfactory and revealed no major problems. Where minor issues were identified feedback was provided and incorporated into systems for assessing future grant applications. Evaluation Activities At present ACW do not have a distinct policy on evaluation. Due to resource constraints no evaluation activity took place during 2000-01 although a pilot impact study of three projects took place at the end of the 1999-2000 financial year. Following restructuring ACW will be placing a priority on research, and evaluation will be a key element of this in the medium term. The Council's policy is to establish an evaluation plan that follows the strategy and this will be in place from 1 April 2002. Finance and Administration:
SUMMARY FINANCIAL STATEMENT - LOTTERY DISTRIBUTION ACCOUNT for the year ended 31 March 2001 SUMMARY FINANCIAL STATEMENT This summary financial statement is extracted from the full accounts and does not contain sufficient information to allow for a full understanding of the results and state of affairs of the Arts Council of Wales Lottery Distribution Account. For further information the full accounts for the year ended 31 March 2001, the auditors' report on those accounts and the Trustees' annual report, should be consulted. The full Lottery Distribution Account, prepared in accordance with the Accounts Direction issued by the National Assembly for Wales as required by S35(3) of the National Lottery etc. Act 1993 (as amended), which has been laid before Parliament and the National Assembly, and submitted to the Charity Commission, can be obtained free of charge by writing to the Finance and Resources Director, Arts Council of Wales, Museum Place, Cardiff, CF10 3NX.
CONSTITUTIONAL BACKGROUND The Arts Council of Wales was established by Royal Charter on 30 March 1994; the Council's objects are set out inside the front cover of this Annual Report. Under the terms of the National Lottery etc. Act 1993 (as amended) the Council is responsible for distributing lottery proceeds to arts organisations in Wales. In carrying out this work the Council is required to follow the Policy and Finance Directions issued by the National Assembly for Wales in accordance with S26 of the National Lottery etc. Act 1993 (as amended). Separate accounts are prepared for the Council's general activities. The Arts Council of Wales is a registered charity.
REVIEW OF THE YEAR AND FUTURE DEVELOPMENTS The accounts of the Lottery Division show a decrease in funds for the year of £2,380,000 (2000: a decrease of £6,801,000) which was transferred from reserves. Grant offers made in the year totalled £13,904,000, (2000: £17,856,000). £15,779,000 (2000: £19,245,000) is recorded as grant expenditure, which reflects offers made in this year and previous years, which were formally accepted during this year. Soft commitments at 31 March 2001 not recorded as expenditure in the Income and Expenditure Account totalled £5,615,000 (2000: £8,819,000). During the coming year the Council will continue to fund capital, film and "Arts for All" projects. It is the aim of the Council informed by its strategic priorities, to ensure that an equitable distribution of Lottery funding throughout Wales is achieved, by art form, region and size of grant. In particular the Council will prioritise the funding of projects whose purpose is to combat social exclusion. The council will also bear in mind the need to respond to arts initiatives under the new European Structural Funds package for Wales.
COUNCIL MEMBERS Council Members are appointed by the National Assembly for Wales and are the charity's Trustees. All Members serve in a voluntary, unpaid capacity. Members who served since 1 April 2000 were: Sybil Crouch, Chairman Harry James (from 1 April 2000) Dai Davies (from 1 April 2000) Dafydd Johnston (to 26 September 2000) Roger Davies Daniel Jones (from 1 April 2000) Hazel Walford Davies (from 1 April 2000) Geraint Lewis Edmond Fivet (from 1 April 2000) Alan Lloyd Stephen Garrett (from 1 April 2000) Penny Ryan (from 1 April 2000) Ellen ap Gwynn (from 1 April 2000) Clare Thomas The register of interests of Members of the Council and of the Lottery Capital, Arts for All and Film Committees, and the register of interests of Council employees are available for public inspection, by appointment, at each of the Council's offices during normal working hours.
LOTTERY ADVISORY COMMITTEES Council has appointed three advisory committees, Capital, Arts for All, and Film to make recommendations about lottery distribution policy and about individual grant applications. The Film Committee, which had its inaugural meeting in October 1999, was set up to enable the Arts Council of Wales to access specialist knowledge in this field. Independent external assessors were employed to advise on all Lottery applications for £100,000 or more. Council takes the final decisions concerning the award of Capital grants over £250,000, Arts for All grants over £100,000 and all Film grants. The Capital Committee members who served since 1 April 2000 were: Roger Davies (Chair) Harry James (from 11 May 2000 John Bevan Lyn Jones Alun Bond (from 1 April 2000) Richard Morgan (from 11 May 2000) Carmel Gahan (to 21 November 2000) The Arts for All Committee members who served since 1 April 2000 were: Alan Lloyd, Chair Margaret Jervis Sandra Anstey (to 18 January 2001) Geraint Lewis (to 7 April 2000) Caroline Clark Jackie Palit Hazel Walford Davies (from 14 July 2000) Eileen Roberts Gareth Griffiths (from 9 January 2001) Ian Rowlands (from 8 December 2001) Jazz Iheanacho (to 18 January 2001) Clare Thomas (to 7 April 2000) The Film Committee members who served since 1 April 2000 were: Daniel Jones, Chair (from 14 July 2000) Marie Gillespie (from 14 July 2000) Dai Davies (from 14 July to 8 December 2000) Huw Penallt Jones Carmel Gahan (to 29 April 2000) Lyn Jones David Gillam Clive Myer
SUMMARY INCOME AND EXPENDITURE ACCOUNT for the year ended 31 March 2001 2001 (£'000) 2000 (£'000) Income Share of proceeds from the National Lottery 12,899 12,236 Investment income on balances in the National Lottery Distribution Fund 1,571 1,281 Income receivable from New Millennium Experience Company - 95 Grants receivable 115 157 Interest receivable 73 84 Grants recoverable 54 38 Share of profit from Lottery funded film - 2 Total income 14,712 13,893 Expenditure Net Grant commitments made (hard) 15,779 19,245 Direct costs of grant making 105 77 Management and administration 1,381 1,336 Total expenditure 17,265 20,658 Unrealised surplus/(loss) on investment in National Lottery Distribution Fund 173 (36) Decrease in Lottery Funds for the year (2,380) (6,801) Chief Executives' remuneration* 76 62 *59% of the Chief Executives' remuneration is charged to general activities
SUMMARY BALANCE SHEET (As at 31 March 2001) 2001 (£000) 2000 (£000) Fixed assets - 14 Current assets 28,775 25,418 Creditors: Amounts falling due within one year (14,328) (16,998) Net current assets 14,447 8,420 Total assets less current liabilities 14,447 8,434 Provision for liabilities and Charges (21) - Reserves and other funds 14,426 8,434 SUMMARY CASH FLOW STATEMENT for the year ended 31 March 2001 Net cash inflow/(outflow) from operating activities 3,412 (1,174) Payments to acquire tangible fixed assets 0 0 Increase/(Decrease) in cash and the balance held in the National Lottery Distribution Fund 3,412 (1,174) NOTES TO THE SUMMARY FINANCIAL STATEMENT 1. Basis of preparation This summary financial statement has been prepared in accordance with the Companies Act 1985 having regard to the Companies (Summary Financial Statement) Regulations 1995 (SI 1995/2092) as far as is relevant and was signed on behalf of the Arts Council of Wales by Jon Shortridge Sybil Crouch Accounting Officer Chairman 17 July, 2001 13 July, 2001
AUDITORS The report of the Comptroller and Auditor General, on the annual financial statements of the Arts Council of Wales Lottery Distribution Account for the period ended 31 March 2001, was unqualified.

STATEMENT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT AND THE MEMBERS OF THE NATIONAL ASSEMBLY OF WALES I have examined the summary financial statement on pages 1 to 4 which has been prepared in the form and on the basis set out in note 1 on page 4. Respective responsibilities of the Council, the Accounting Officer and Auditor The summary financial statement is the responsibility of the Council and the Accounting Officer. My responsibility is to report to you my opinion on its preparation and consistency with the full financial statements and Trustees annual report. Basis of opinion I have conducted my work in accordance with the Auditing Guideline "The auditors' statement on the summary financial statement" adopted by the Auditing Practices Board. Opinion In my opinion the summary financial statement is consistent with the full financial statements and annual report of the trustees of the Arts Council of Wales Lottery Distribution Account for the period ended 31 March 2001 and has been properly prepared on the basis set out in note 1. John Bourn National Audit Office Comptroller and 23-24 Park Place Auditor General Cardiff CF10 3BA 19 July 2001 Breakdown of overhead and administration costs: The Arts Council of Wales incurs costs, which support both its general activities and the Lottery distribution function. In accordance with the Financial Direction issued by the Secretary of State, the Council apportions indirect costs properly between these two areas of activity with reference to the time spent on or the consumption of the relevant resources by the respective activities. The operating costs for 2000-01, totalling £1,381,000, include a share of general activities costs incurred on the Lottery Division's behalf. Overhead expenditure is broken down as follows: 2001 (£000) 2000 (£000) Staff costs: - costs directly attributable to Lottery Division staff 403 401 - share of grant-in-aid costs charged to Lottery activity 275 236 Recruitment, training and other staff costs 65 40 Grant monitors, advisors and associated legal fees 108 150 Audit fees 12 12 Other professional fees 107 187 Travel and subsistence 49 65 Public relations 38 40 Accommodation costs 79 75 Office running costs 94 76 Depreciation 14 13 Irrecoverable VAT 40 3 Charge for use of grant-in-aid assets 45 38 Restructuring (see below) 39 - Provision for Bad Debts 13 - Total 1,381 1,336 Restructuring Following various reviews of the work of the Council, including an internal Operational Review and an external Management Review undertaken by Richard Wallace, the Council decided on 4 September 2000 to restructure its operations. Professor Anthony Everitt and Anne Twine were employed as consultants to develop an Action Plan for restructuring, and a Chairman's Advisory Group (which is a sub?committee of the Council) was established to progress the process. Professor Everitt, the Chairman and the Acting the Chief Executive meet periodically with a Minister's Group which was established to inform the Minister for Culture, Sport and the Welsh Language of developments. Various consultations were undertaken during the restructuring process, including a general consultation on the broad principles at the outset, and various staff consultations on the details as the restructuring discussions developed. The new structure was agreed in late June 2001, and will give ACW a much stronger focus as an arts development agency. The new structure will also give a stronger focus to serve all parts of Wales. Over the summer the Council will start to move from the present structure into the new structure, and the process will be implemented top down, i.e. the implementation phase will start with the recruitment of the new Senior Management Team which will largely be regionally based. It is anticipated that the new structure will be in place by January 2002. Adequate provision has been made in these accounts for the restructuring costs that can be anticipated with some degree of certainty. There may be other costs associated with the process, and these are shown as part of the Contingent Liabilities note in the full accounts, which states that these costs are estimated not to exceed £192,000. Performance indicators ACW reports quarterly to the National Assembly and the Department of Culture Media and Sport on a set of agreed performance indicators. These are aimed at measuring administrative efficiency in terms of managing the backlog, if any, of pending applications, the average time it takes to process applications and the average cost of processing an application. The latter is a crude measure encompassing all the fixed and variable costs of the Lottery Division. ACW met all key targets over the last year and will be actively striving to improve on these where possible during the current year. The targets and actual results across these three indicators totalled across all grant giving schemes were as follows: Indicator ActualFinancial year2000-01 ActualFinancial year1999-00 Target 1 No. of applications outstanding (as percentage of applications received in year) 36% 22% 29% 2 Average time to process applications 63 days 67 days 70 days 3 Admin. costs per completed application (net of restructuring costs and bad debts) £2,073 £1,634 £1,950 Accommodation and Staffing The Lottery Division in Cardiff is based in ACW's office in Museum Place. Lottery Division staff also work in ACW's Carmarthen and Colwyn Bay offices. The Lottery Division employs staff to deliver the Capital, Film and Arts for All schemes and provide operational and administrative support for grant giving. The division ensures that it has a staff presence at all ACW's offices to maximise accessibility to the public. During 2000-01 the Lottery division employed on average 19 staff Future Developments New Programmes and funding priorities for 2001/2 · Objective1 ACW has introduced two new Lottery programmes, both aimed at encouraging and assisting more applications from Objective 1 areas in Wales: - Capital Rapid Development for projects in Objective 1 areas to help establish eligibility and develop potential arts based capital applications to Objective 1 programmes and schemes. Awards of up to £25,000 are possible, with decisions made in 2 months. - Arts for All Objective 1 Fast Track for projects in Objective 1 areas to help pilot or research proposals which have the potential for further Objective 1 funding. Awards up to £10,000 are possible, with decisions made in 2 months. · Sustainability ACW has extended the scope of its Arts for All scheme to allow successful projects a further maximum period of 3 years support. This initiative aims to enhance the sustainability of projects, in the areas of highest strategic priority. Action to improve capacity building / reduce cold spots - targeted publicity and information campaigns, e.g. roadshows and advice surgeries in cold spot areas. - Investment in partnership projects with local authorities to establish new grass roots arts activities and infrastructures, in order to encourage more community based applications, e.g. Blaenau Gwent CBC and Neath Port Talbot CBC. - Investment in partnership projects with the voluntary sector to support grass roots arts activities and infrastructures, in order to encourage more community based applications, e.g initiative from Voluntary Arts Wales and establishment of Wales' team for National Federation of Music Societies. Lottery strategy ACW's current strategy was adopted in 1999 and due to run until 2004, however due to restructuring, during 2001/02 ACW will prepare and consult on a new, joint five year Arts Strategy. This strategy will for the first time combine the funding streams from both Lottery and Grant-in-Aid (National Assembly voted funds). This will lead to a new Lottery Strategy from 2002 onwards. New schemes As part of the reorganisation process referred to earlier in this report, ACW intends to integrate certain project schemes that were previously funded by Lottery Arts for All and separate Grant-in-Aid schemes, however the Capital and Film schemes will remain as separate Lottery only schemes. The small grants programmes (Fast Track and Superfast Track) will also remain substantially unchanged. 10 new schemes have been proposed, and three further schemes are currently being considered. The title and aim of each new scheme is shown in Appendix C All schemes will require the submission of an eligible application and decisions will be made against publicised priorities and assessment criteria. Each scheme is devised to allow ACW the flexibility to focus upon new or existing priorities without the need to establish a completely new scheme. A key objective of this process is to reduce the overall number of schemes in order to make ACW schemes: · easy to understand · easy to access · easy and efficient to administrate · fit with ACW objectives and priorities Lottery funds may now be used to support individuals, but not international activity. Any scheme sourced from Lottery income will need to meet ACW's Lottery Directions from NAW, and satisfy the principles of public benefit to the people of Wales and be clearly additional. ACW looks forward to continuing to distribute its share of the proceeds of the National Lottery for the benefit of people and communities in Wales.
Richard Turner, Joint Lottery Director
Katherine Davies, Joint Lottery Director
26th September 2001
Appendix A1: All Lottery awards by arts activity to 31.03.2001
Program Area - Total No of Grants - % of Total
Music - 689 - 28.6
Multi-artform - 565 - 23.5
Drama - 361 - 15.0
Visual Art - 315 - 13.1
Dance - 122 - 5.1
Film - 102 - 4.2
Literature - 97 - 4.0
Craft - 93 - 3.9
Community Arts - 19 - 0.8
Music & Drama - 14 - 0.6
Circus - 13 - 0.6
Visual Arts & Craft - 8 - 0.3
Video - 6 - 0.2
Multimedia - 2 - 0.1
Grand Total - 2406 - 100.0

Program Area - Total value of grants (£) - % of Total
Multi-artform - 50,255,629 - 51.4
Music - 13,066,468 - 13.4
Drama - 9,524,863 - 9.7
Visual Art - 9,215,325 - 9.4
Film - 6,996,283 - 7.2
Dance - 2,467,721 - 2.5
Craft - 2,066.806 - 2.1
Literature - 1,684,918 - 1.7
Circus - 1,385,986 1.4
Community Arts - 801,735 0.8
Video - 123,761 - 0.2
Music & Drama - 109,761 - 0.2
Visual Arts & Craft - 9,872 - 0.0
Multimedia - 6,000 - 0.0
Grand Total - 97,715,128 - 100.00

Appendix A2 - Lottery Awards by region to 31.03.2001
All Lottery Awards -
Area of benefit - Amount (£) - Population - £ per head - No. of awards
Anglesey - 1,185,361 - 67,100 - 17.67 - 73
Blaenau Gwent - 1,285,440 - 73,000 - 17.61 - 39
Bridgend - 721,392 - 130,100 - 5.54 - 38
Caerphilly - 1,059,863 - 169,100 - 6.27 - 60
Cardiff - 14,080,333 - 315,000 - 44.70 - 272
Carmarthenshire - 1,980,163 - 169,100 - 11.71 - 149
Ceredigion - 5,727,063 - 69,500 - 82.40 - 118
Conwy - 1,263,682 - 110,600 - 11.43 - 67
Denbighshire - 1,160,285 - 92,200 - 12.58 - 76
Flintshire - 1,516,742 - 144,900 - 10.47 - 53
Gwynedd - 5,240,030 - 117,800 - 44.48 - 196
Merthyr Tydfil - 471,007 - 58,100 - 8.11 - 26
Monmouthshire - 900,434 - 86,800 - 10.37 - 55
Neath, Port Talbot - 1,858,700 - 139,500 - 13.32- 67
Newport - 8,635,873 - 136,800 - 63.13 - 48
Pembrokeshire - 1,799,154 - 113,600 - 15.84 - 114
Powys - 6,381,210 - 124,400 - 51.30 - 240
Rhondda Cynon Taff - 5,305,771 - 240,100 - 22.10 - 152
Swansea - 2,981,089 - 230,200 - 12.95 - 162
Torfaen - 808,139 - 90,500 - 8.93 - 46
Vale of Glamorgan - 1,119,979 - 119,400 - 9.38 - 53
Wrexham - 7,317,609 - 123,300 - 59.35- 60
All Wales - Wales Millennium Centre - 10,003,125 - 3
All Wales - Film grants - 6,444,697 - 77
All Wales - Arts for All national/touring projects - 4,708,449 - 52
All Wales - Capital grants of national significance - 2,365,103 - 17
All Wales - Millennium festival projects - 182,207 - 5
All Wales - Grants for Dance & Drama students - 1,212,228 - 88
Current totals - 97,715,128 - 2,921,100 - 33.45 - 2,406

Appendix A3 - Lottery Awards by region to 31.03.2001 Capital awards (including Film projects)
Area of benefit - Amount (£) - Population - £ per head - No. of awards
Anglesey 916,535 67,100 13.66 36
Blaenau Gwent 1,018,021 73,000 13.95 25
Bridgend 479,607 130,100 3.69 21
Caerphilly 820,937 169,100 4.85 33
Cardiff 10,787,743 315,000 34.25 139
Carmarthenshire 1,465,615 169,100 8.67 58
Ceredigion 4,999,209 69,500 71.93 46
Conwy 832,256 110,600 7.52 22
Denbighshire 921,941 92,200 10.00 27
Flintshire 1,325,272 144,900 9.15 21
Gwynedd 4,350,859 117,800 36.93 76
Merthyr Tydfil 182,401 58,100 3.14 10
Monmouthshire 658,602 86,800 7.59 25
Neath, Port Talbot 1,401,780 139,500 10.05 39
Newport 8,439,379 136,800 61.69 25
Pembrokeshire 1,319,427 113,600 11.61 33
Powys 5,074,679 124,400 40.79 111
Rhondda Cynon Taff 4,387,121 240,100 18.27 85
Swansea 1,923,351 230,200 8.36 75
Torfaen 648,291 90,500 7.16 23
Vale of Glamorgan 867,643 119,400 7.27 27
Wrexham 6,938,090 123,300 56.27 33
All Wales - Wales Millennium Centre 10,003,125 3
All Wales - Film grants 6,444,697 77
All Wales - Capital grants of national significance 2,365,103 17
Current totals 78,571,684 2,921,100 26.90 1,087

Appendix A4 - Lottery Awards by region to 31.03.2001 Arts for All Lottery awards (Including Dance and Drama Awards and Millennium Festival projects)
Area of benefit - Amount - Population - £ per head - No. of awards
Anglesey 268,826 67,100 £ 4.01 37
Blaenau Gwent 267,419 73,000 £ 3.66 14
Bridgend 241,785 130,100 £ 1.86 17
Caerphilly 238,926 169,100 £ 1.41 27
Cardiff 3,292,590 315,000 £ 10.45 133
Carmarthenshire 514,548 169,100 £ 3.04 91
Ceredigion 727,854 69,500 £ 10.47 72
Conwy 431,426 110,600 £ 3.90 45
Denbighshire 238,344 92,200 £ 2.59 49
Flintshire 191,470 144,900 £ 1.32 32
Gwynedd 889,171 117,800 £ 7.55 120
Merthyr Tydfil 288,606 58,100 £ 4.97 16
Monmouthshire 241,832 86,800 £ 2.79 30
Neath, Port Talbot 456,920 139,500 £ 3.28 28
Newport 196,494 136,800 £ 1.44 23
Pembrokeshire 479,727 113,600 £ 4.22 81
Powys 1,306,531 124,400 £ 10.50 129
Rhondda Cynon Taff 918,650 240,100 £ 3.83 67
Swansea 1,057,738 230,200 £ 4.59 87
Torfaen 159,848 90,500 £ 1.77 23
Vale of Glamorgan 252,336 119,400 £ 2.11 26
Wrexham 379,519 123,300 £ 3.08 27
All Wales - Arts for All national/touring projects 4,708,449 52
All Wales - Millennium festival projects 182,207 5
All Wales - Grants for Dance & Drama students 1,212,228 88
Current totals 19,143,444 2,921,100 £ 6.55 1,319

Appendix B - Lottery Publications Guidelines · A guide to applying for Arts for All Lottery grants from the Arts Council of Wales · A guide to applying for Capital Lottery grants from the Arts Council of Wales · A guide to applying for Super Fast Track Lottery grants from the Arts Council of Wales Additional Guidelines · applications from departments of larger organisations and how often you can apply · applications from schools and colleges · architectural design competitions · business plans · constitutions · development grants · educational organisations · feasibility studies · film production and script development · income and spending budgets · local and regional Eisteddfodau · option agreements for buying land and buildings · public art · publications and recordings · reaching disabled people in the arts · repeat funding applications to arts for all schemes · fast track Arts for All Objective 1 scheme Appendix C - Draft new schemes to be introduced 2002 Scheme Title Aim Professional Development - Training To support provision of all artistic, technical, business and managerial training in the arts Professional Development - 'Creative Cymru' Bursaries To enable any practicing, professional artist to enhance their skills, creativity or creative partnerships. Production and new audiences To support the creation or recreation of work to be seen within Wales, which also increases the number of people attending arts events. Presentation To support the presentation of the widest range of art events from performances, exhibitions and installations. Research and Development To incorporate all forms of R&D;, except for capital feasibility studies, capital development funding and Capital Objective 1 Rapid Development.. The scheme therefore will include R&D; for new developments and partnership building (both artistic and organisational), market research, business planning and will enable effective evaluation of arts activities. Taking Part To support professionally led participatory arts activities, outside of the formal education sector. Education and Young People To support the provision of creative arts activities for statutory education and youth services. Arts in the Community To enable professionally led arts activities within wider scale community regeneration initiatives. Capacity Building To support the development and improvement of arts organisations and professionalisation of artists and arts workers. Local authority Arts Development To support the effective provision of arts development services within local authorities Equal Opportunities To include all initiatives, for both individuals and organisations, which will promote and enhance equal opportunities and race equality, celebrate cultural diversity and reduce access barriers for disabled artists and audiences. Other schemes under consideration: · Pilot Awards for All Wales: A joint lottery small grants scheme that aims to encourage applications from organisations unfamiliar with the individual Lottery distributors in Wales. It is run in partnership with the Heritage Lottery Fund, Community Fund and New Opportunities Fund. This scheme would be run alongside ACW's own Arts for All Super Fast Track. · National Year of …………….: To allow ACW additional flexibility to respond to a new or particular priority for the arts in Wales it has been suggested that a national, annually designated scheme be established. · Regional Year of……………..: :To allow each local/regional committee additional flexibility to respond to a new or particular local priority, a regional, annually designated scheme be established.