Salzburg Festivals branded 'financially irresponsible'

An Austrian state auditor, Joseph Moser, has described the financial management systems at the Salzburg festivals as being ‘unworthy of an organisation with a one million Euro turnover, let alone 50 million.’

Dr Moser said there was too much cash slushing around in plain envelopes for artist payments. Up to 6.83 million Euros a year, he said, was paid out in cash.

Salzburg festival president Helga Rabl-Stadler dismissed the report as “unfair”, “simply wrong”, “impractical”, “malicious” and “defamatory”. I guess she didn’t agree with its content.

You can read the judge’s full report here (in German).

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  • Dear Mr. Lebrecht,
    just a few amendments and corrections to enlighten the unsuspecting reader:
    1.) Dr. Moser is not a judge, he is President of the Rechnungshof, an independent state body with a remit to audit state entities.
    2.) The audit has been completed by the end of 2010, but took until now to be published.
    3.) The audit clearly states that the attendence figures given out by the Festival have been interpreted by them (the Festival) rather “creatively”. Insofar, as the figures announced include free tickets and do not resemble the true picture as to how many seats were actually sold.
    3.) The sponsorship agreements with the major sponsors gives them the right to buy an allotment of tickets priced 2/3rds under the face value.
    4.) the audit covers the period from 2004 – 2010 and has been triggered by a fraud scandal involving the Osterfestspiele GmbH (the Easter Festival) and the (Summer) Festival
    5.) According to a decision by the Supreme Court (Docket Nr. 8 ObA 1/11x to be found at RIS, http://www.ris.bka.gv.at) the appointment and renewal of the President’s (of the Festival) contract ist most likely in breach of Austrian law. Even so that decision (by the highest employment law tribunal composed out of 3 professional judges complemented by 2 lay assessors) is dubious, as the two lay assessors were allegedly biased (sitting also on the Board of a major Austrian Social Security Agency (PVA) faced with the same legal problem at issue). This allegations of bias has been refuted by the Supreme Court.

    Plaintiff

  • In Germany, most income musicians make outside their regular, fulltime job (like playing in an orchestra) is taxed at 50%. I’m not sure, but I suspect Austria has similar laws. (Perhaps someone can let us know.) As a result, festivals have to practically double the amount musicians are paid in order to attract the best artists. Quite often, presenters get around this problem by paying in cash since it is difficult for tax officials to trace, and reduces the amount presenters have to pay artists by half. There is also a set foreigner tax for musicians who do not live in Germany, that is automatically deducted from pay checks. I think it is about 30%, and here too, I suspect similar laws exist in Austria. These laws have led to the brown envelop practices described above. Some of the rationale behind these tax laws are for the good, but in practice so ill-conceived they contribute to a culture of fraud.

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