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The “Teatro alla Scala” in Milan. The support of the financial statement to governance models from 1921 to 1946. Mariarita PIEROTTI University of Milano Bicocca – Italy [email protected] Enrico DEIDDA GAGLIARDO University of Ferrara – Italy – [email protected] Salvatore MADONNA University of Ferrara – Italy – [email protected] Acknowledgements: This study is the fruit of a group elaboration and should be considered a shared cultural heritage; however paragraph 1 (Introduction) should be attributed to Salvatore Madonna, paragraphs 3.1, 4.1, 5.1, 6.1, and 7 should be attributed to Enrico Deidda Gagliardo, whilst paragraphs 2, 3.2, 4.2, 5.2, 6.2 and 8 should be attributed to Mariarita Pierotti. 1 The “Teatro alla Scala” in Milan. The support of the financial statement to governance models from 1921 to 1946. Abstract This study is the result of research focusing on the accounting systems of the Teatro alla Scala in Milan in the period spanning 1921 to 1946. The Teatro alla Scala in Milan is internationally recognised as a world stage for Opera. The aim of this research is to seek to understand, through the study of the evolution of the form and content of the informational tools, if these were able to provide relevant data in order to adequately support the governing bodies during the period analysed. The investigation has revealed a parabolic trend in the way the data was structured. In an attempt to offer valid food for thought to current scientific debates we have focused on the role played by the bookkeeping informational system of this institution during a very specific historical period, and how it balanced out and/or enforced the relations of the powers at the time. Keywords: Teatro alla Scala, Milan, accounting report system, financial statement, governance models, opera companies, theatre. 2 1) Introduction This study is the result of historical research which focused on the “Teatro alla Scala” in Milan. Opera theatres are historically characterised by the dichotomy between artistic concerns which influence the institutional aims, and the financial concerns. This is nevertheless an essential condition in order to accomplish the statutory mission. The use of new governance models supported by adequate financial statement systems seems to be the only means of ensuring a financial and artistic equilibrium (on the subject of financial equilibrium, please refer to: GIANNESSI E., 1960, more specifically, for companies in the field of the Arts, BAUMOL W.J., BOWEN W. G., 1966). In the field of historical research, our contribution can be considered part of the vast literature available regarding the evolution of accounting reports and of accounting instruments, which have always been the focus of other academics in our discipline (please see, amongst others, PODDIGHE F., 1973; PODDIGHE F., CORONELLA S., MADONNA S., DEIDDA GAGLIARDO E., 2007). As far as specific historical studies on Theatres and similar organisations are concerned, there have been numerous important contributions, among which we feel it is important to highlight: ANTONELLI, V., D’ALESSIO, R., IULIANO, G., 2007, BERGAMIN BARBATO, M. AND MIO, C., 2007. Today1 the “Teatro alla Scala” is considered to be one of the world temples of Opera. The Teatro alla Scala was founded under the Figure n. 1. Church Santa Maria alla Scala auspices of the Empress of Austria following the fire that on the 25th February 1776 destroyed the Teatro Regio Ducale, the historic home of the Milanese opera. The cost of building the new theatre was supported entirely by the owners of the boxes [“Corpo dei Palchettisti”] at the Ducal theatre in exchange for the renewal of their ownership of their boxes. The land on which the church of Santa Maria alla Scala2 stood was given to the Palchettisti for free by the Ducal Camera in 1381, in virtue of an obligation in 1717. 3 The theatre was inaugurated on 3rd August 1778 with the Opera by Antonio Salieri, “L'Europa riconosciuta”. In 2004, after an important restoration, the new Figure n. 2. The Teatro alla Scala today Theatre was inaugurated with a performance of “L'Europa riconosciuta”, in a symbolic parallel with the first historic opening in 1778. The Theatre is managed by the “Fondazione Teatro alla Scala di Milano”. In 1997 the Theatre was juridically transformed from Independent Body to Foundation3 in order to guarantee constant and flexible development to the Mission so that it might promote musical culture in Italy and around the world. The Founders (by Law4, Ordinary and Permanent5) gave life to a private law, not-for-profit institution, constituting one of the institutes of national interests as according to Law n. 800/1967. For the purpose of this paper, historical research on the “Teatro alla Scala” in Milan has particularly concentrated on the period from 1921 – 1946. On the one hand we focused our investigation into the Theatre on institutional aspects, organisational structures and the governance models, and on the other hand on the financial statements (ROBERTS, J. and SCAPENS R.W. 1985). The time scale we have chosen will be subdivided into two periods: • the transformation of “La Scala” into an Independent Body (1921-1935) • the more hybrid State-Institution reports (1936-1946). The reason for this separation from 1921-1935 can be traced to the transformation of the Theatre into an Independent Body with its own juridical personality. The research covering the period 1936-1946 is linked to the time when the “Regio Decreto Legge” [Royal Charter](R.D.L.) n.438/1936 came into force, which limited the Body’s autonomy and was in line with the totalitarian Fascist regime. 4 As a consequence to the changes in the relationship between State and Institution, the accounting tools were also modified and therefore we have specifically referred to the level of support provided to the governance models in place at the time. The study will focus on the evolution of the form, the structure and the content of the financial statement. We will evaluate its efficiency in providing information that would have been useful in adequately supporting the governing bodies in their strategic and managerial decision making processes. Therefore the “research question” is the following: Was the financial statement used in the periods from 1921-1935 and from 1936-1946 efficient in adequately supporting the governance models in place at the time? In order to answer this question, our paper will have the following structure: In the second paragraph we have outlined the research strategy that we have adopted. In the third paragraph, we have provided information on the historical context of the two periods covered, in order to then continue with an in-depth study of the institutional and organisational aspects of the Theatre. We then get to the heart of the study, or rather, an analysis of the balance sheets from 1921 to 1946. Finally, the sixth paragraph questions whether the function of the balance sheets provided the support needed to the governance models at the time. We conclude in the final two paragraphs with a temporal comparison that provides conclusive reflections on the research carried out. 2) Research Methodology The objective for this historical study is not only to provide a “narration of the past”, but rather an analysis of a subject (in this case the Teatro alla Scala) and its development. In this way the historical study is intrinsically bound to the scientific research. In other words, this allows for us to define any causal or functional relationships between the events observed and to find a link between the present, the past and the future – as with all social phenomena (GIANNESSI, E., 1992). 5 The description of the events or of past incidents does not necessarily cancel out historical methods. The fact of carrying out historical investigations does not mean limiting ourselves to telling the stories without highlighting the subliminal network of connecting relationships. Therefore whilst our work began on the basic understanding of the events which made up part of the history of one of the most important theatres in the world, we have undertaken the task of highlighting the links which make those events interpretable. In order to achieve this, our research has mostly been based on the primary sources obtained from the archives at the Teatro della Scala. We have referred in particular to the balance sheets and attached accounting documents from 1921 to 1946, as well as the Juridical Rules and Regulations – or rather the statutes of the Institution that regulated affairs during those years. The first step of gathering data on which the historical analysis was based concluded with the collection of secondary sources. These came from historical texts covering the national political situation at the time, as well as texts regarding theatre organisations. With reference to this latter part we did not find any publications on the accounting systems used by these organisations during the period studied in any business administration literature. The oldest studies on this subject are the following: Valle’s publication in 1823, on the more operational aspects rather than accounting aspects, and Castellino’s dating 1946, following the Second World War. Therefore, in the next stage which involved the identification of causes that might have had consequences on the accounting tools used by the Theatre management, we concentrated almost exclusively on the political stage, which during the ‘30’s and ‘40’s were some of the most intense years involving the establishment and consolidation of a totalitarian state. As a preview to our conclusions, we can reveal that during the decade mentioned above the ideologies and corporate management at the time influenced the scientific debates and organisation of the economic disciplines, and were the basis for the changes of the structure of the accounting informational system at the Teatro alla Scala. 6 3) Historical Context6 3.1. The “Teatro alla Scala” from 1921 to 1935 From 1868-21 the “Palchettisti” were the sole owners of the theatre. After which the Milan City Council entered into co-ownership, and this agreement is still in place today. The management was passed from pillar to post, alternating between public bodies and private management until the establishment of the Autonomous Municipal Body in 1921. The funding of the Theatre was totally or largely public. With the Contract of 9th November 1920 between City Council, “Palchettisti” and private benefactors a formal agreement was made for the establishment of the “Autonomous Body of the Teatro alla Scala of Milan”. This took over the management of the Theatre for a trial period of 9 years. The agreement declared that if these 9 years had passed with no problems, the Body (following a final decision of its Board of Managers), the City Council (at no extra cost) and the “Palchettisti” (upon payment) would have passed on their respective property rights of the Theatre to the Body. The process of juridical recognition began in 1920 and reached a conclusion when the Autonomous Body was declared a Moral Entity with the Royal Charter (R.D. Regio Decreto) n. 2143/1921, signed by the King of Italy Vittorio Emanuele III. At the same time the first Statutes were approved. After 3 years of enforced closure due to the 1st World War, in 1921 the Theatre was restored to the public in all its splendour. A new era in the power relations began with the Royal Charter in 1929: the Board of Managers of the Body was dissolved and a Special Commission was assigned. With the Convention of 18th November 1930, registered in the presence of a Notary on 27th May 1931, the management of La Scala was reviewed under the following terms: • concentration of the entire property so that the Milanese municipality7 was sole owner, via the free acquisition of the assets belonging to the Autonomous Body (mainly 7 • concession of the use of the collateral real estate to the Autonomous Body and transitory accessories to the Municipality; • Renewed management of the Theatre and of all its sister institutions in the hands of the Autonomous Body; • concession of the right to free action to the Autonomous Body, except in the limits set down by law and by the Convention, and not including the fixed destination of the opera performances and for institutional ends. In short, there was the initial transfer of ownership of the collateral real estate from the Autonomous Body to the Municipality. After the transfer there followed the concession of the use of the collateral real estate from the Municipality to the Autonomous Body. The latter, despite having lost ownership of the real estate, could continue making use of the buildings. The changes ended with the approval of the second Statute with the Royal Charter (R.D.) of 30th March 1931, n. 436, which were then slightly modified with the R.D. of 4th January 1934, n.123. The new Statutes were in place until the Royal Charter (R.D.L.) n.438/1936 that gave life to a hybrid form of Opera Company, thus permanently ending the Theatre structure as it had been until that date. 3.2. The Teatro alla Scala from 1936 to 1946 In 1936, the juridical structure of the Theatre that had been a model of reference for the establishment of the Theatre di Roma in Rome in 1929 and for that of Florence in 1933, went under a radical transformation following the enforcing of the R.D.L. [Royal Charter] of 3rd February n.438. In order to improve a difficult situation that had taken shape at the time, caused by the disastrous effects in the wake of the Second World War, it was not until 1946, when the R.D.L of 8 30th May n.538 attempted to change the previous structure in favour of more autonomy (largely financial) of the Theatre Companies. With the R.D.L n.438, many other Autonomous Bodies were created in order to reach a total of thirteen. Aside from those already in place such as Milan, Rome and Florence, there were the following new additions: Verona, Venice, Turin, Genoa, Naples, Palermo, Bologna and Trieste, as well as the Concert Institutions of Santa Cecilia in Rome and Cagliari. The decree regulated their administration in a uniform manner, and many restrictions were introduced in particular with reference to the performances allowed. It was a decidedly strict intervention which was in line with the political atmosphere at the time that was under a Totalitarian Regime. This regime was particularly attentive towards the cultural events that involved the mid-to-upper class social levels. It could have seemed at first glance to be the beginning of a State Theatre, but in actual fact, as we will see below, this never happened as its juridical configuration remained suspended in a StateInstitution rapport of a particularly hybrid nature11. The government wanted to homogenise the management of the major institutions with the aim of gaining more political control and improving artistic quality, thus eliminating any contractors and promoting musical and theatrical education to the people. The reduction of the activities of the great Opera Companies to a homogeneous management was achieved through the elimination of any private management and the establishment of methods of control from central management. In 1935, a state-run management was set up with the specific aim of managing the affairs linked to the Arts: the Figure n. 3. “La Scala” seriously damaged Ministry for Press and Propaganda, which became the Ministry for Popular Culture two years later. That same year, the Duce introduced an “Inspectorate of Theatres”, in order to guarantee greater control of the performances from a State point of view, and in order to keep them under direct government power. 9 When the Royal Charter R.D. n.438 was enforced by law in 1936, disciplining the Opera Companies in an organic and uniform manner, there was also the introduction of government figures such as the Supervisor of Opera Companies and the members of the Management Committee. Furthermore, there was also the introduction of necessary ministerial approval for any acts of relevant importance and for the programming of the theatrical seasons. In 1943 La Scala was hit by enemy bombing and seriously damaged. The Theatre was only restored after the end of the War and performances did not start again until 11th May 1946 with an historic concert directed by Toscanini, who had recently returned from the United States where he had been in exile following the advent of the Fascist regime. Antonio Ghiringhelli was appointed supervisor and during his mandate, La Scala rapidly regained its high level of production and artistic excellence. In order to decree the new period of theatrical performances, in May 1946 the R.D. n.538 (known as the Scoccimarro Law after the then Finance Minister) was enforced, in which the State was declared direct sponsor of the Opera. By this, the State had to provide 12% of treasury rights, and the income came from the performance intakes to the Autonomous Bodies, to the Accademia di Santa Cecilia and other not-for-profit theatrical bodies and institutions. 4. Institutional organisation, Organisational Structure and Governance Models9 4.1. The first period: 1921-35 In the period covered by this study, the Statutes were therefore reviewed three times: in 1921, 1931 and in 1934. Beginning with the juridical form: with the D.R. of 1921, the Theatre was declared a not-forprofit Autonomous Moral Body; with the Statutes of 1931 and their modification of 1934 the previous juridical form was confirmed. 10 In the Statutes of 1921 the founding members were the Municipality of Milan, the “Palchettisti” and the private benefactors who had invested individual quotes that were no lower than £50’000. In the Statutes of 1931 and ’34, the members featured the Municipality alone, which had bought sole property of the Theatre. In all three Statutes, the aim of the Body was mainly that of using the Theatre for performances and concerts that honoured its tradition. Moving onto the institutional organisation: The Statutes of 1921, together with the Administration Regulations of 1922-1925, listed the authorities: the Board of Administrators (and their eventual Delegates), the President, the Secretary, and two auditors. With the Statutes of ’31 and ’34 the same authorities were confirmed but with the addition of an Executive Commission within the Board of Directors and a Theatre Director, both at the head of the organisation. The organisation was composed in a hierarchical configuration defined by functional areas, which was neither too complex nor articulated. The head was held by the General Director, to whom the Administration Offices, the Technical Office and the Stage Services answered directly. As far as the governance models are concerned, the Statutes of 1921 outlined a simple model, based on the presence of a Board of Administrators and two auditors: in order to facilitate the fulfilling of the statutory goals, these subjects were respectively appointed for addressing and controlling all the activities of the organisational structure, entrusting the General Director with the full coordination of said structure. With the Statutes of ’31 and ’34 the Simple Model was confirmed with few integrations: the Board of Administrators, nominated for its governing responsibilities, was assisted by an Executive Commission (added in the ’31 Statutes) or by a Delegated Advisor from the Theatre Direction (in the ’34 version); the Auditors (one or more in the ’31 statutes; three in ’34) were responsible for accounting and administrative control; the Board of Administrators entrusted the coordination of the structure to the Theatre Director, who was assisted by an Executive Commission (in ’31) or by a Delegated Advisor (in ’34). 11 4.2. The second period: 1936-4612 In the period covered by this study, the changes to the institutional organisation, to its structure and to the governance models, can be mostly traced to the R.D.L. n.438 of 1936. At the time, no changes were made to the statutes since, according to the documents available, the new Statutes written in 1943 were never approved. The law of 1936 is therefore the only juridical reference that can help us understand the institutional organisation in place at the time. As far as the juridical form is concerned, the R.D.L. of 1936 confirmed the body’s juridical and managerial autonomy, and that it could be non-for-profit and aspire above all to the musical and theatrical education of the people. During those years, the body’s autonomy was transformed into a formality, since the Royal Charter above imposed a tight control over any decision or appointment made. Among the founding institutions there was only the Municipality of Milan, and the Theatre was placed under the direct supervision of the Ministry for Popular Culture. The aim of the Body was that of organising opera performances and concerts that were at the heart of the Theatre’s tradition, as well as programming concerts and plays exclusively with the personnel from La Scala, in order to draw attention to La Scala and the Italian Arts. As far as the institutional organisation is concerned, the decree in 1936 established that the Body was controlled by the Podestà who was supported in his role by a Management Committee. The Supervisor was appointed by the Ministry for Popular Culture but, nevertheless, all the other nominations presented by the Municipality or by other Bodies had to be approved by the Ministry. Among the other authorities there was the Board of Administration and three auditors. In actual fact, the law of ’36 deprived the administrative bodies of any authority, and their responsibilities were endorsed by the Supervisor and therefore by the Ministerial authorities. The 12 Board was basically “emptied” of its specific tasks, and its existence responded purely to formal requirements. In the figure no. 3 (in appendix) the powers and functions of each body have been highlighted. The simple governance model was confirmed, but with a few integrations: • the role of Supervisor was introduced, directly from the Ministry for Popular Culture, and he was to propose all the necessary steps for the administration and management of the Theatre to the President. • the Podestà was assisted by an executive committee with the role of examining and approving the final balance and the financial statement, as well as approving the artistic programme for the following season that would be submitted for the Ministry’s approval; • there were three Auditors: two appointed by the prefecture and the other by the Podestà. It is clear how the intention of the Regime was to control the management of the Body “from the inside”, through the appointment of staff that were continually monitored by the ministry. 5) The financial statement 5.1. The reports of 1921-3510 The study of the accounting information system of La Scala from 1921 to 1935 was possible through the use of the following documents: • the Statutes of 1921 and the Administrative Regulations of 1922-25, the Statutes of 1931 and their modifications of 1934; • the Financial statements from 1922-23 to 1930-31 (whose model was based on the Body’s first financial statement, dated 1921-22 but which has been lost), and those from 1931-32 to 1934-35. The first evidence is that the main changes in the balancing format can be seen in line with the Statutory changes: a renewal of the governance model required a renewed supporting tool. The balance sheet covering 1922-23 had the advantage of being the first financial statement of the 13 Autonomous Body, but suffered from the confusion that was inevitable for a first attempt. The final balance in 1931-32 could boast of having rationalised the disorganised financial statements beforehand: until 1930-31, so many new items had been added to the ’22-23 balance sheets in such an arbitrary way that a veritable “informational jungle” had been created. We will compare the various financial statement models, first with respect to the general aspects of the balance, and then with respect to the characteristics of its sections for synthesis. REGULATORY FRAMEWORK. The balance sheets had, as their sole reference, the Code of Commerce of 1882: this did not contain any specific instructions for financial statements, and was limited to a generic outline, supported by evidence and fact, of the consolidated income and losses. DRAFTER. The drafting of the financial statement was the prerogative of the President of the Board of Administrators, who could if necessary delegate the task. APPROVER. The approval of the Final Balance was a prerogative of the Board. Following approval, the financial statement had to be sent to the Municipality together with the annual accounts, in order for the Municipality to carry out its role of supervisor. REFERENCE PERIOD. The administrative year reflected the opera seasons at the time, which began on 1st July of each year (n) and ended on 30th June of the following year (n+1). For example, the financial statement dated 1931-32 was approved on 30.06.1932. In order to respect such timing, some data was automatically presumed and therefore brought about inevitable accounting superficiality. DOCUMENTS: COMPONENTS, INTEGRATION, TOOLS. The accounting model of 1922-23 presented some new elements with respect to the previous models and gave a modern nod to the future, which can be seen in particular in the presence of multidimensional data, both accounting and statistical. However, it bore obvious weaknesses. Firstly, it was a disorganised amalgam of too many documents that were heterogeneous and uncoordinated. The quality of the data had one fundamental fault: the “Economic Account” in actual fact was a simple Financial Statement containing incomings and expenses; furthermore, the prolific lack of analysis of the data from ’22-23 to ‘30-31 14 determined a loss of precision and clarity in the already confusing data sheet. The financial statement was also the shape of a confused data pyramid: both synthetic and analytical data were exposed in one single section, and at times on the same level. The accounting model of 1931-32 introduced substantial differences. This was the result of an effort to rationalise the data: it had become apparent that the excess of disorganised information was as bad as no information at all. The move went from more than twenty tools to just five: and the “Economic Account” was no longer articulated in four sections, but became one single document, integrated with detailed tables. Instead of the thirteen integrated documents three documentation blocks were inserted: 1) the Sections and Statistical Data of the Theatre management; 2) the Attachments to the Balance Sheet and 3) the Attachments to the “Economic Account”, the predecessors to the present Additional Note. The basic structure of the account was redesigned in order for it to go from an indistinct mass of documents to a more systematic structure of correlated tools: the balance sheet was no longer the sum of many documents but rather one single balance system. Subsequently, the confused pyramid built on numerous different levels within the same document was substituted with one single synthetic data level in the main documents (Financial Situation and “Economic Account”) and the transfer of the more analytical levels to the integrated attachments. However the 1931-32 model still had some weaknesses: whilst it had been improved, the “Economic Account” was still a simple financial statement. The comparison between the various balance sheets analysed, as presented below, focuses on the character of the single sections. FINANCIAL SITUATION STRUCTURE. The financial situation (FS) from ’22-23 to 30-31 was structured according to assets, liabilities and equities of the Body, articulated on two levels of data. The section “Deficit w/plant” and the statement of the eventual financial statement deficits were inserted as a post note 15 to balance the Assets. The eventual profit for the year was added as post note to balance the liabilities. Even in the Financial Situation from ’31-32 to ’34-35, the structure reflected the Assets and Liabilities on two informational levels, but no longer featured the Body’s Capital, following the ownership transfer of the Theatre to the Municipality. FORM. All the Financial Situations presented a form that was divided and compared in sections, in order to allow for the immediate visualisation of situations in all their components of investment and funding. CONTENT. The Financial Situations from ’22-23 to ‘30-31and from ’31-32 to ‘34-35 can be explained in the tables below. CLASSIFICATION. The Financial Situations from 1922-23 to 1930-31 highlighted the contents as according to the natural criteria. The first distinction was between the LIABILITIES (or ESTATE ASSETS AND staple wealth) and FINANCIAL ASSETS AND LIABILITIES. The natural classification was not sufficient in guaranteeing a clear structure of data and, in fact, it collapsed under the weight of the added and confused sections from 1922-23 to 1929-30. The reduction it underwent in 1930-31 and the rationalisation of 1931-32 led to the elimination of all the more redundant data. EVALUATION. The Financial Situations did not contain explicit or systematic indications on the evaluation criteria that were used. Exceptionally, in the 1924-25 balance sheets the estate accessory of “Casa dei Filodrammatici” was inserted for “the sum of the cost of its purchase”; furthermore, complaints were made of the low level of analysis of the Real Assets: for example the Scenery, whose value would have been of £1’200’000, had been totally depreciated in one year and featured in the account under £1. “ECONOMIC ACCOUNT” STRUCTURE. Fore the purpose of this study we will begin with the general structure of the “Economic Account” (EA), or with its statement sections, in order to conclude with the specific structure, or the content of the items inserted. 16 General Structure: from 1921-22 to 1922-23, this was composed of four sections, which were reduced to two from 1923-24 and until 1924-25. From 1925-26 until the end of this period (193435), the FR on 30.06n+1 became one single section. Specific Structure: the EA from ’22-23 to ’30-31 were structured on 2 or 3 levels, based around the additions and increased detail, with no organic structure to which one could refer. Within the EA there were a number of detailed forms of specific items. The accounts from ’31-32 to ’34-35 were structured on one single level: the FR form was maintained on one synthetic level alone, whilst the details were increasingly transferred to the Integrated Attachments. It went from one extreme to another: from a disorganised structure on various levels, to a hermetic structure on one level alone. FORM. In the EA from ’22-23 to ’30-31, the numerous “Economic Sections” presented a structure composed of divided sections set against each other, whilst the Detailed forms, inserted in each section, had a more simple structure: divided by sections but not set side by side. In the EA from ’31-32 to 34-35, the only “Economic Section” was divided by sections that were set side by side, whilst the more systematic Attachments to the EA, moved to the Integrated Documents had a more simple structure: by divided sections but not set side by side. CONTENT. The EA was not a true Economic Account, containing costs and assets revealed thanks to General Financial Accounting following the principles of double-entry bookkeeping; it was rather a simple Financial Report¸ containing costs and incomings set up with Financial Bookkeeping following the principles of single-entry bookkeeping, even if this was not always done in the most simple way (as shown in the “Year Accounts” analysed). Therefore for the purposes of this study, the term “Economic Account” is always used figuratively. The subject studied in the accounting system used for the predisposition of the Financial statement was composed of potential and actual financial flows. The EA was a hybrid document – both because it used economical terms in place of financial competence, as well as because these 17 had not been identified at the same time but in different phases of the financial year (EXPENSES: forecastÆliabilityÆpayment. INCOMINGS: forecastÆcost assessmentÆrevenue). CLASSIFICATION. In the EA from ’22-23 to ’30-31, the synthetic Statements highlighted the content in kind: on the first level, among the Expenses there were 4 generic cells, inside which details of the incomings were inserted indiscriminately. The Detailed forms listed expenses and incomings in kind as well as by destination (in other words per opera performed), exposing these in absolute values (averages and totals) and in percentages, and compared with other financial years. In the EA from ’31-32 to 34-35, the only Synthetic Statements highlighted the expenses in part by destination and in part in kind, and the incomings were rather inserted in kind, delegating further information to the Integrated Documents. The Attachments rationalised the confused list of items in previous balance sheets, articulating the items on the first level of synthesis of the FR on a second, third and at times even a fourth level of information, and subdivided the items in a homogeneous according to kind. EVALUATION. The EA determined the financial content partly according to the principle of financial competence, partly according the criteria of funds. 5.2. The reports of 1936 - 46 The study of the balance sheets of La Scala from 1936 to 1946 was carried out using the following documents: • The D.L. n.438 of 3rd February 1936 that was to be enforced on 4th June 1936; • The Financial statements of La Scala from 1935-36 to 1946-47. In the time scale studied, the informational bookkeeping system underwent substantial changes, in particular following the much-cited law of 1936. In the following years, the basic structure of the balance became clearer, remaining faithful to a structure that, whilst being the fruit of fascist actions, had the merit of reaching high levels of precision and explicative clarity. Once the fascist regime had collapsed and with it the Governance model of the theatre, the Special Administrator 18 Antonio Ghiringhelli decided to maintain the structure of the financial statement, as proof that the regime had achieved, as far as the balance sheet was concerned, a level of detail and articulation that was extremely high. Ghiringhelli immediately understood that the level of analysis reached, which at first had been the basis for tight control by the Ministry, could now be used for the efficient running of the Theatre’s management with the aim of re-launching artistic activities. This he achieved during the years of his management. From the observation of such empirical evidence, the decision was made to further explore the Financial statement of 1935-36 and that of 1936-37, whose structure remains largely unchanged until 1946-47. There will be less comparison with respect to the scientific model used in the previous period studied (from 1921 to 1935). Therefore, for coherence we will firstly tackle the general aspects of contextualisation, in order to then analyse the character of the synthetic statement. REGULATORY FRAMEWORK. The balance sheets of the period in question referred to the Commercial Code from 1882 to 1942, when the Civil Code was then enforced. The new discipline, whilst having made many steps forward with respect to the previous dictates, still left room for criticism. DRAFTER. During the period investigated, the drafting of the Financial statement was a prerogative of the Supervisor. From 1945 to 1947 this was carried out by the Special Administrator. APPROVER. From 1936 to 1944 the financial statements had to be specifically approved by the Board of Administrators who, once the balance sheets were approved, had to send them on to the Ministry for Press and Propaganda (that then became the Ministry for Popular Culture) and to the Municipality of Milan. Despite the superior competence of the Ministry, the Ministry preserved a form of control on the management of the Body. REFERENCE PERIOD. The administrative year, as with the previous period, began on 1st July of each year and ended on 30th June of the following year. The Opera season opened on the day of St. 19 Stephen, 26th December; it was only from 1951 onwards that the opening night was moved to 7th December, on the feast day of St. Ambrogio, in order to meet the needs of Milan’s citizens who preferred to pass the holiday season outside the city. APPROVAL TIME. As far as the approval time of the financial statement during this period, we have been unable to find any data regarding this. From the assessment of the balance sheets available, we can deduce that the Committee met for the approval of the final balance in SeptemberOctober; only the statement for 1940-1941 was approved in July and that of 1941-42 in November. DOCUMENTS: COMPONENTS, INTEGRATIVE, TOOLS. The balance sheet for 1935-36 had not yet been affected by the changes following the R.D. n.468 in 1936 that was enforced in June of that same year, at the same time as the presentation of the balance of the season just passed. The file was composed of: • the Auditors’ Report; • the Councillor Delegated for Direction’s report; • the Financial Situation • the Final Balance • statements and statistical notes. The first two, in other words the Auditors’ Report and that of the Managing Director, can without a doubt be considered instrumental documents; the Balance Sheet and the Final Balance made up the heart of the bookkeeping data. The first was a report on the Financial Situation as of 30th June 1936, in which the incomings and liabilities were illustrated, at first synthetically, and then, thanks to the attachments, it was possible to study them in more detail. The second, or the Final Balance, was a simple final financial balance containing incomings and outgoings. From the 1936 season, to the dawn following the revolution brought about by the Royal Charter often mentioned above, the balance sheet began to assume a different structure, which preserved some points that we will highlight below. It is certainly difficult not to notice greater sense and 20 clarity in the reports, based on the presence of an initial index where the items were recorded with the corresponding pages. The file was composed as follows: • auditors’ Report • supervisor’s Report (articulated in sub-paragraphs) • financial situation • final Balance (subdivided into: opera season, May Concerts season, artistic tour in Germany, Theatrical Saturdays, final balance of the Financial Year XV). • statements and relative statistical data. This composition was maintained by the then Special Administrator Ghiringhelli even after the Fascist regime collapsed. “FINANCIAL SITUATION” STRUCTURE. The Financial Situation for the year 1935-36 is structured according to assets, liabilities and equities on two informational levels. At the bottom of the Assets is the eventual loss for the year and the amount carried over. At the bottom of the liabilities is the eventual profit for the year and the amount carried over. In the following years there are no other changes to the structure of the sheet except for the addition of certain specific items that will be described in the paragraph relative to the content below. FORM. For all the years covered during the era studied, the form does not change and presents as divided and countering sections aimed at allowing for an immediate comparison between the uses of the capital and relative sources of funding. CONTENT. The Financial Situation from 1935-36 to 1946-47 highlighted the assets and liabilities. CLASSIFICATION. In each financial situation of the period studied, the main difference is between the Assets and Liabilities. Within each of these two macro-aggregates the items were distinguished by kind. 21 EVALUATION. With regards to the criteria for evaluation used there are no particular indications that can be highlighted from the financial statements analysed. In the Economic Account for 193738, the item “Warehouse for Deposit of Materials” was added, but there are no indications with regards to the evaluation parameters. The reason for this is explained in the Auditors’ Report: “As far as the activities, please note the introduction of a new item “Warehouse for Deposit of Material” for £170’280.10. The current increase in prices has influenced the Supervisor to proceed to the acquisition of goods to be used in the following year and this will draw an important profit”. This would suggest an evaluation of the cost of purchase. “FINAL BALANCE” STRUCTURE. The Financial statement in 1935-36 was structured according to “Expenses and Losses” and “Incomings and Profit”, the operating surplus was inserted to total either the expenses or of the incomings. A tool for this statement was a table for comparing the Final Balance of 193536 and 1934-35. The balance closed with the attachments in which details of the expenses and incomings were highlighted: • details general expenses; • details management expenses: personnel and material; • details of depreciation 100%; • various losses; • Theatre profit; • contributions; • provisions for differing concessions. From 1936-37 the section dedicated to the final balance was articulated as follows: • FINAL BALANCE o Opera Season; o May Concerts Season; 22 o German artistic tour; o Theatrical Saturdays; o General Final Balance of the year. First there was the drafting of the final balance “in detail”, for example if referring to the Opera Season, then the results gathered from this particular item were brought over to the general balance that summarised the results of all the activities carried out by the Theatre during the period considered. The more analytical Final Balances were structured in “Expenses and Losses” and “Incomings and Profits”. A table to compare the balance of the two consecutive years was inserted as a tool for the balance for the Opera Season, as well as – from 1936-37 – the balance of the year in closure. The General Balance preserved the structure set up in 1935-36, but unfortunately lost the instructions for greater detail that were provided in the more analytical balances described above from that same year. This document, therefore, was a simple list of the totals of incomings and expenses that had been covered in more detail in the pervious statements. The Final Balance flowed as the final result into the Summary Account, in which on one side the “Profits” and on the other the “Losses and Provisions” were highlighted. FORM. The Final Accounts from 1935-36 to 1946-47 presented a form with divided and contrasting sections, both for the General accounts as for the more detailed ones. The Detailed Forms of the incomings and expenses, however, were simpler: they were structured as tables that were divided by sections but that were not contrasting. CONTENT. From 1935-36 to 1946-47 there are no further references to an “Economic Account” but rather to a “Final Balance”. Despite the change in its name, the document remained a financial report of sorts (expenses and incomings), apparently modified by the presence of items that were only formally economic in nature, and were purely financial items. From reading the Auditors’ Reports of the period concerned, reference to the “receipt of incomings” and “mandates for expenses” is often repeated, referring to documents that are 23 fundamental accounting tools for public administrations. To quote one, taken from a section of the Auditors’ Report from the balance sheet of the year 1937-38: “The bookkeeping reviewed by us, […] is often controlled by us with periodic checks of the funds, in order to allow us to examine the receipts of all incomings and to be aware of the mandates for expenses in the corresponding items in the balance.” 13 Expressions of this kind only confirm the conviction that the accounting system of the Theatre was still based on principles of financial accounting. This conclusion is supported by the analysis of the accounting daybooks that were predisposed each year. In each of these there is a rather disorganised list of financial incomings and outgoings, in which the heading of the columns for DEBIT and CREDIT had nothing to do with double-entry bookkeeping methods. CLASSIFICATION. In the 1935-36 financial statement the incomings and outgoings were exposed in part by destination and in part by kind. Among the Expenses was one cell per destination (management area of the Theatre): expenses relative to the Dance School. In the criteria of benefits in kind we can, however, include: expenses for personnel and materials management, paying off of Materials and Plants, Restoration of scenery destroyed during the fire at the Royal Theatre in Turin, Reorganisation costumes. At the bottom we have two hybrid accounting cells: Various Losses and Deficit May Concert Season. From 1936-37, the general balance sheet included the incomings and outgoings in a way that was no longer analytical but more synthetic, with totals of the balances in detail: therefore the criteria used was only by destination, in ideally identifying the management areas of the Theatre in: • Opera Season; • May Concerts; • Symphonic Spring and Autumn Concerts; • Theatrical Saturdays; • Artistic tour of Germany. 24 Within each balance sheet the predominant criteria was that of benefits in kind, with the exception of the balance for the Opera season, in which the criteria by destination was not relevant only in the case of the expenses of the Dance School. EVALUATION. The Final Balance at the time observed determined its financial content partly on the principles of juridical and financial competence (Appropriation and income guarantees in the most juridically correct hypothesis, simple payment and receipt forecast in other cases), in part on the criteria of funds (payment and effective revenue). 6. The support of the Financial statement to governance models. This paragraph will evaluate if the accounting system used in the two sub-periods was efficient in providing support to the governing bodies. 6.1. 1921-35 From ’22-23 to 30-31, the balance sheet was barely adequate: it was too complex and disorganised, with a consequent output of data that was quantitatively excessive as well as qualitatively unable to support the decision-making bodies of such an important institution. From ’31-32 to 34-35, the financial statement was rationalised and became efficient enough in supporting the renewed governance model. The structure of the Economic Account was redesigned ex-novo, so that it became an accounting system rather than a confused mass of documents. There was a move from a blurry pyramid of information within the same document, to the addition of the more synthetic levels within the main document and to the shifting of the more analytical levels to the Integrated Attachments: the synthetic data, of bookkeeping nature and created for immediate assessment, were useful to the Board of Administrators and for strategic decision-making; the analytical data, of non-bookkeeping or statistical nature and created on various observation levels, were useful to the Board for managerial decision-making. 25 6.2. 1936-46 In 1935-36, whilst having benefited from the developments of the previous period, the financial statement was still suffering from a lack of organisation. In particular as far as the Final Account was concerned, the level of data was still too analytical and did not allow for a quick glance at the data in order to elaborate an immediate comparison that could support the Board of Administrators in its strategic decision making. It was only in 1936-37 that the balance sheet as a whole achieved a high level of transparency. All the more detailed data was gathered in the attached documents, and both the financial situation and the final account summarised the synthetic data of accounting nature, which allowed for a quick comparison. The more detailed data was listed in the Auditors’ Reports and that of the Supervisor, as well as the statistical prospects attached that were added at the end of the file. As far as the data tolls exposed in the Auditors’ Report and in the Statistical Prospects, we feel it is important to underline that these were a little thin from the year 1942-43, the year of the bombings which damaged the Theatre. In that period the efforts of the Special Administrator Ghiringhelli were put in resuscitating the Institution and for this reason perhaps a concentration of effort and care in providing detailed data at such an historic time might have seemed rather superfluous. 7) Comparison of the historical periods studied. Following the detailed analyses above, we believe it is useful to outline below a schematic comparison of the periods studied in order to conclude with the main causes for the trends highlighted. • Until the Financial statement of 1929/30 the Board of Administrators made its decisions on the basis of a indistinct mass of heterogeneous documents that were not inter-coordinated: these documents were characterised by their complexity, their number, the confusion between synthesis and data analysis and their disorganisation. 26 • From the 1931-32 financial statement to the 1939-40 balance sheet there was an informational rationalisation that brought about the creation of a true “accounting system”, distinguished by greater simplicity, a drastic reduction of the number of documents and the subdivision of data synthesis (used for strategic decision-making) and data analysis (valid for managerial decisions), as well as by the order between the documents and the data contained within. • From the 1939-40 financial statement to the 1945-46 balance sheet (the temporal limit for this study) there was an informational involution with respect to the high level achieved up to the 1939-40 statement. The Accounting System became excessively impenetrable, with a consequent worsening of the data to support the decision-making bodies: the high level of more systematic and clearer documents and informational simplification were contrasted by a spasmodic quest for the essential, which made it highly cryptic, both with reference to the synthetic data for strategic decision-making as well as the analytical data for managerial decisions. The parabolic trend of the level of information on the operating balance of the Teatro alla Scala in the period from 1921-1946 consequentially determined a parabolic trend in the level of support provided to the governance models in force at the time. • In the period from 1921-1931, the indistinct and disorganised mass of heterogeneous documents that were also uncoordinated provided a low level of support to the Board of Administrators in their decision-making processes. • From 1931 to 1935 the “accounting system” was the fruit of the rationalisation of the data and provided sufficient support to the Board of Administrators both in their strategic decision-making (thanks to the useful level of synthesis in the financial statement), as well as their acquisition of managerial data (by virtue of the level of analysis of the integrated and instrumental documents). 27 • From 1936 to 1946 it is important to distinguish between two sub-periods: until 1940 an adequate level of support to the Board of Administrators was preserved, thanks to the fact that the level of data acquired in the previous period was maintained; from 1941 onwards, however, the search for the simplification of the “Accounting System” was taken to an extreme, thus making the data cryptic not only in the synthetic reports, but also in the integrated and instrumental documents that should have been more analytical in order to aid the authorities in their managerial decision-making. Therefore, the level of informational support to the Special Administrator was reduced for the managerial decisions and, automatically, also for the strategic decision-making. 8) Discussion and concluding remarks In an attempt to provide a useful contribution to this scientific debate, which can be compared to other historical studies in the field of business administration, as revealed by Carnegie and Napier (1996), this study has attempted to tackle the “thorny” issue of the role of accounting in specific public administration institutions. In the light of the reflections above, we can conclude that the function of the financial statement for the Teatro alla Scala in supporting the governance models in place from 1921 to 1946 followed a trend that can be defined as “parabolic”. In more explicit terms: it is possible to identify a sub-period, from 1921 to 1941, in which the support of the accounting data to the authorities in place registered a slight improvement, which then worsened and weakened from 1941 onwards. Specifically, the financial statement of 1921 was extremely disorganised, and consequently there was a yearly conquest of greater clarity, which reached a high level of transparency in the main documents. At the same time there was greater analysis of the attached documents (of Integration and tools), in particular in the case of the accounting system of 1939-40. From the 28 following balance sheet onwards (1940-41), the accounting data were no longer integrated with detail and care and inputted in a precise and punctual manner as before. Such tendencies became evident in the financial statement for the season 1942-43, the year of the disastrous bombings of the Theatre and, under the management of the special administrator Ghiringhelli, importance was placed on the difficult act of restoring the artistic activities of the Theatre that had been abruptly interrupted by the War. To summarise, from the studies carried out we can clearly note how the accounting informational system was then as now the main tool for exercising some “power” in the field of financial organisations (BERTINI U., 1978). By doctrine, many scholars have highlighted the role of the accounting plants in the context of various institutions (ROBERT & SCAPENS, 1985; MACINTOSH & SCAPENS, 1991; CATTURI & RICCABONI 2001; BUSCO et al. 2002; GIANNINI A., PIEROTTI M., 2006). This link between informational tool and power is even stronger if one considers the political scenario upon which our study is based. In fact, the parabolic trend mentioned above can be linked to the growing need for information that came from the Corporative state. It was impossible to send data that was disorganised and unclear to a Regime that was so conscious of the influence of institutions such as the Theatre, and which created the role of Inspectorate for the Theatre in 1935. From the same Regime emerged the need for an accounting system that was precise, well organised and which remained largely untouched until 1939-40 (please refer to HOPWOOD A. G., 1983). In the ‘30’s, a subject that animated the debates of business administration scholars was that of the “social” function of institutions and companies, that which has been defined in many reports at the time as the “corporative company” (CINQUINI, L., 2007). The corporate institutions in the Fascist State did not carry out a private function alone, but was also in the hands of the people since it was meant to satisfy the needs of everyone. Therefore, it was all the more important that a “Theatre Company” respond to this concept of “sociality” (BIONDI, M. – BORSOTTI, A. 1996, ANTONUCCI, G. 1996). 29 The framework that emerges from a quick overview of the contribution to our field at the time is undoubtedly that of an influence of corporativism on a theoretical level. In particular, sociality and subordination to national interest was especially felt (GIOVANNINI P., 1935, SANTARELLI A., 1935). In this context the function of accounting – in other words of book-keeping and statistical analysis – took on an even greater importance since their work was indispensable to the discipline of corporate activities (PALUMBO, P., 1939, BELLAVISTA, R., 1936). In 1938, Trovati expressed himself in the following terms whilst referring to the functions of accounting techniques: “ […] it is of indispensable help for the solution of many problems faced by corporative economics and in particular those which regard the breakdown of costs, their cuts and their control, perfecting production and finally the problems faced between costs and the State (fiscal system)” (TROVATI A. , 1938, pag. 171). In this scientific context the reports of the Teatro alla Scala could not have any defects or mistakes of any kind, considering it was a social institution to which the Regime had attributed a primary position amongst similar organisations. This meant that the documents reached a level of detail and transparency that had never been achieved before. In the following years, the upheaval of the political situation and therefore the sudden absence of control that had been imposed until then, provoked the progressive impoverishment of the synthetic documents, until the financial statements became “cryptic” such as that of 1942-43. Even in the instrumental documents the data were synthesised to such an extent that it became unapproachable, and ended up weakening the informational system in its entirety and, by consequence, the level of support to the governance models at the time. The informational parable above in our opinion highlights the passage from an excess of analysis to an excess of synthesis of the data made available to the decision-making authorities of the “Teatro alla Scala”. This was not only the result of the mutated need for control on behalf of the 30 “powers that be” at the time, but also and above all the origin of the inadequacy of the annual financial statements in supporting the strategic and managerial decision-making for future seasons. 31 Notes 1 Data from the website www.teatroallascala.org. The opera in 1745, by Dal Re, reproduced the gothic church of Santa Maria alla Scala. Source: www.storiadimilano.it. 3 The juridical transformation was carried following the Law n. 549/1995 and the D.Lgs. 367/1996. 4 The founders by right are the State, the Lombardia Region, the Province, the Municipality and the CCIAA of Milan. 5 The Founders were those who put forward a contribution that was no less than € 520.000 (Ordinary) and € 5.200.000 (Permanent). 6 For the paragraph we referred to the documents reproduced in AA.VV, L’ordinamento giuridico del Teatro alla Scala. Raccolta di leggi, decreti, atti, regolamenti e progetti, E.A. TEATRO ALLA SCALA, Milano, 1963, pagg. XIII-XXVII, and pagg. 1-152. 7 The transfer of ownership from the Municipality and the Palchettisti to the Autonomous Body at the end of the 9 years, as foreseen in the 1920 convention, never happened; therefore from the concentration of ownership in the hands of the Municipality in effect the only absences were the private boxes and the new ownerships acquired directly from the Autonomous Body. 8 The expropriation was financed with a loan of £ 10.000.000 contracted with the CARIPLO BANK. 9 Please refer to the Statutes and the Administrative Regulations as reproduced in AA.VV, L’ordinamento giuridico del Teatro alla Scala, op. cit., pagg. 68-71, 101-104, 144-145, 149-152. 10 The data is taken from the Statutes and the Administrative Regulations reproduced in AA.VV, L’ordinamento giuridico del Teatro alla Scala, op. cit., pagg. 68-71, 101-104, 144-145, 149-152, both from the financial statements of the Autonomous Body relative to the period from 1922 to 1935, excluding the Financial statements of 1921-22 and 29-30, since they no longer exists in the archives. 11 Cfr. AA.VV, L’ordinamento giuridico del Teatro alla Scala.op.cit. pag. XXVI. 12 For the whole paragraph we referred to the Statutes and Administrative Regulations reproduced in AA.VV, L’ordinamento giuridico del Teatro alla Scala, op. cit., pagg. 153-160; 169-175. 13 Report of Auditor to Financial statement of 1937-38, pag. 22. 2 32 References Primary sources: AA.VV (1963), L’ordinamento giuridico del Teatro alla Scala. Raccolta di leggi, decreti, atti, regolamenti e progetti, Milano, E.A. TEATRO ALLA SCALA. Historical Archive of the Teatro alla Scala, Balance Sheets and attached documents from 1921 to 1946. Secondary sources: Antonelli, V., D’Alessio, R., Iuliano, G. (2007), “Art and Accounting History: The Teatro San Carlo of Naples, 1737–1786”, Accounting, Business & Financial History, Vol. 17, No. 1, pp. 165–186. Antonucci, G. (1996), Storia del Teatro italiano, Roma, Newton&Compton. Baumol, W.J.; Bowen W. G. (1966), Performing Arts: the Economic Dilemma, Cambridge, MIT Press. 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(1996), “Critical and interpretive histories: insights into accounting’s present and future through its past”, Accounting, Auditing & Accountability Journal, vol. 9, n. 3, p. 393-419 Castellino, G. (1946), Le imprese teatrali, Torino, Edizioni Palatine. Catturi, G. & Riccaboni, A. (2001), “Economia aziendale e teoria istituzionale: affinità concettuali ed implicazioni operative per il controllo di gestione”, Contabilità e Cultura Aziendale, Rirea, Vol.1, No. 2, pp.133-176. Cinquini, L. (2007), “Fascist Corporative Economy and Accounting in Italy during the Thirties: Exploring the Relations between a Totalitarian Ideology and Business Studies”, Accounting, Business and Financial History, Vol. 17, No. 2, pp. 209-40. Giannessi, E. (1960), Le aziende di produzione originaria, vol. I, Le aziende agricole, Pisa, Cursi. Giannessi, E. (1992), Considerazioni introduttive sul metodo storico, Milano, Giuffrè. Giannini, A.; Pierotti, M (2006), L'informativa contabile dell'Opera Primaziale di Pisa nel XIX secolo, in Atti dell'VIII convegno della Società di Storia della Ragioneria, Rirea. Giovannini, P., (1935), L’azienda nello stato corporativo, Messina, Principato. Hopwood, A. G. (1983), “On Trying to Study Accounting in the Contexts in Which Operates”, Accounting, Organisations and Society, Vol. 8, No. 2-3, pp. 287-305. Hopwood, A. G. (1990), “Accounting and Organisation Change”, Accounting, Auditing and Accountability Journal, Vol. 3, No.1, pp. 7-17. Hopwood, A.G. and Miller, P. (1994), Accounting as a Social and Institutional Practice, Cambridge: Cambridge University Press. Macintosh, N.B. & Scapens, R.W. (1991), “Management Accounting and Control Systems: a structuration theory analysis”, Journal of Management Accounting Research, Autumn, vol. 3, pp. 131-158. Miller, P. (1994), “Introduction”, in A.G. Hopwood and P. Miller (eds.), Accounting as Social and Institutional Practice, Cambridge: Cambridge University Press, pp.1–39. 33 Palumbo, P., (1939), Ragioneria ed economia corporative, Palermo, Ciuni. Poddighe, F. (1973), Dai cinquecontisti a Francesco Marchi, Colombo Cursi, Pisa. Poddighe, F.; Coronella, S.; Madonna, S; Deidda Gagliardo, E. (2007). “Francesco Marchi and the development of logismology”, Accounting, Business & Financial History. vol. 17, No.1, pp.11-32. Riccaboni, A., Giovannoni, E., Giorgi, A., Moscadelli, S. (2006), “Accounting and power: evidence from the fourteenth century”, Accounting History, Vol. 11., No. 1, pp. 41-62. Roberts, J. and Scapens R.W. (1985), “Accounting Systems and Systems of Accountability – Understanding Accounting Practices in their Organisational Context”, Accounting, Organisations and Society, Vol. 10, No. 4, pp. 443-56. Santarelli A., (1935), “Corporativizzare l’azienda”, Rivista Italiana di Ragioneria, November, No. 11, pp. 359-60 Trovati A., (1938), “L’azienda nello stato corporativo”, Rivista Italiana di Ragioneria, May, No. 5, pp. 170-71. Valle, G. (1823), Cenni teorico pratici sulle aziende teatrali, Società Tipografica dei Classici italiani, Milano. 34 Appendix APPENDIX Table n. 1 Ownership, management and funding of “La Scala” from 1921 to 1935 From 1921 to 1931 From 1931 to 1935 OWNERSHIP Co-ownership - Public (Municipality) -Public (Autonomous Body of Teatro alla Scala) - Private (Palchettisti) MANAGEMENT Autonomous Body of Teatro alla Scala in Milan (trial 9 years) Total Public Ownership (Municipality of Milan) Autonomous Body of Teatro alla Scala in Milan FUNDING • Partially public from state: from treasury rights on the bets and performances from Province of Milan + Additional 2% ad hoc. • Partially public from municipality: contributions and other municipal funds. • Partially from market: income from boxes+season income+eventual management residue • Partially from freedom: oblations and donations and inheritance. Expenses covered both of investments as of management • Partially public from state: from treasury rights on the bets and performances from Province of Milan + Additional 2% ad hoc. • Partially public from other Public Administrations: contributions and other funding from State, Province, Provincial Council for Economy, other public bodies. • Partially public from municipality: contributions and other municipal funds • Partially from market: income from boxes+seasonal income+other income from the Body’s artistic activities+income from collateral estates and accessories+eventual management residue. • Partially from freedom: oblations and donations and inheritance. • Partially private: funding from private institutions • Partially from banks: loans from Cassa di Risparmio delle Province Lombarde Expenses covered both of investments as of management From 1936 to 1946 Table n. 2 Ownership, Management and Funding of the Teatro alla Scala from 1936 to 1946 OWNERSHIP Totally Public Property (Municipality of Milan) MANAGEMENT Autonomous Body of the Teatro alla Scala in Milan FUNDING • Totally Public: from treasury rights on bets and performances in the Province of Milan + additional 2% ad hoc; o from the Ministry for Popular Culture, in variable measures and depending on the financial situation of the balance; o from the Provincial Administration, this too was not fixed and was tied to the financial trends; o from the Municipality of Milan, in the form of contributions or funding.. • only after 1943, at the end of the rebuilding of the Theatre damaged by the bombings, were these accompanied by private benefactors, who had been completely absent during the Fascist period. 35 Appendix Figure n.1. Organisational structure from 1921 to 1931 MANAGING DIRECTOR Nominated by the CdA Board of Administrators (CdA) Auditors 2 members nominated by the Board of Administrators Members nominated by the Municipal Council and by the sposnsor President CdA nominated by the Municipal Council in Milan Secretary CdA nominated by the Board of Administrators Powers Constitution and Composition Administrative Offices Technical Office Scenery Services AUTONOMOUS MORAL BODY OF LA SCALA IN MILAN STATUTES OF 1921 (15 ARTICLES) AND ADMINISTRATIVE REGULATIONS OF 1922, REVIEWED IN 1925 Board of Administrators (CdA) President CdA Secretary CdA [Statutes Artt. 5, 6, 7, 8, 12, 13, 14, 15] [Statutes Artt. 9, 10, 12, 15] [Statutes Art. 11] [Regulations Artt. 1 e 3] [Regulations. Art. 2] • 9 members, including President • nominated by the Municipal • nominated by the Board of Council in Milan Administrators • first CdA constituted by Executive Commission • for each successive CdA: nominations: 2 members from Ministry; President and 4 members from Municipal Council; 2 from the Palchettisti; 2 from Benefactors • after the first 9 years of trial, it was foreseen that 9 members of the Municipal Council be integrally nominated. • powers of ordinary and extraordinary administration • legal representative of the • convocation of CdA, upon order Body by law and to third parties from President • deliberation on the theatrical seasons • convocation and presidency • compilation and diffusion of • appointing of artistic, technical and administrative of Board Agenda of Meetings of CdA. personnel • predisposition of financial • writing up of minutes of meetings • conservation of heritage statement held by CdA. • definition of Organisational Structure of Theatre • overseeing of execution of • execution of deliberations of • authorisation of President as having power of authority deliberated acts CdA pertaining to him • predisposition of Forecast Financial statement • emergency deliberations • management of correspondence • approving of Final Financial statement, predisposed by • legal consultation President and Managing Director • nomination and revocation of Managing Directors • nomination of Secretary and his annual salary • nomination of 2 Auditors from outside Board and definition of annual emolument. 36 Auditors [Regulations Art. 4] • 2 members nominated by the Board of Administrators • review of Budget • review of Financial statement Appendix Figure n.2 Organisational structure from 1931 to 1936 Director of Theatre nominated by CdA Board of Administrators (CdA) Executive Commission Or Managing Director Nominated by the Board assistance to the Director of the Theatre Members nominated by the Municipal Council and by the sposnsor President CdA Secretary CdA nominated by the Board of Administrators nominated by the Municipal Council in Milan Auditors 2 members nominated by the Board of Administrators Administrative Offices Powers Constitution and Composition Board of Administrators (CdA) Technical Office AUTONOMOUS MORAL BODY OF LA SCALA IN MILAN STATUTES OF 1931 MODIFIED IN 1934 Executive Commission President CdA Or Managing Director Scenery Services Secretary CdA • 11 members, including President (from Statutes of 1931). Nominations: 6 members from Podestà of Milan; 1 from Ministry of National Education; 1 from Benefactors, 1 from Ministry of Corporations as representative of National Fascist Syndicate of Musicians, 1 from President of Province of Milan, 1 from Provincial Council for Economy of Milan (the last 2 only with continued contributions) Æ 8 members, including the President (in Statutes of 1934). • nominated by • nominated by CdA • executive of Commission: 2 head members (of which one Government among those designated by Municipal Council) + President of CdA (in statutes of 1931)Æ in alternative to Executive Commission, managing director (in Statutes of 1934) • powers of ordinary and extraordinary administration • definition of annual periods of activity • approval of programmes from each theatrical season • approval of Final Financial statement, predisposed by President and Managing Director • authorisation of President as having power of authority • nomination of Director of Theatre and technical and administrative personnel (in statutes of 1931) Æ Nomination of Managing Personnel and technical and administrative personnel (In statutes of 1934) • nomination and renewal of 2 members of Executive Commission (in Statutes of 1931 and 1934) Æ Nomination of Managing Director, in alternative to Executive Commission (in Statutes of 1934) • executive Commission: assistance to the Director of the Theatre; carrying out of tasks given by CdA, urgent and extraordinary 37 Director of Theatre Auditors • nominated • 1 or + by CdA members, nominated by CdA (in Statutes of 1931). Æ 3 members nominated by CdA, of which one from benefactors (in Statutes of 1934) • nomination of • convocation of CdA, by • Pariticipati • Review Vice President on at CdA with of Budget order of the President • legal • writing up of minutes of advisory vote • Review representation of minutes of CdA meetings of Financial Body by law and statement for third parties Appendix Figure n. 3 Organisational structure from 1936 to 1946 President Milan Podestà Supervisor Nominated by Ministry for Popular Culture Administrative Offices Technical Office Scenery Services Direction Committee President Auditors • Milan Podestà • Nominated by Ministry for • Supervisor; Popular Culture • Three representatives from Municipality; • President of the Theatre Museum of La Scala; • One representative of the syndicate organisation of musicians that was legally recognised and competent on the territory; • One representative of the National Fascist Federation of Industrialists of the Arts; • One representative of the National Fascist Federation of Workers of the Arts; • Representative of Body by law and to third parties • Convokes the Board of Administrators each time it is demeed necessary. • Subjects all acts of • examination and approval of financial statements and final • Oversee management administration and management balance; bookkeeping of the Theatre managed by the • approval of artistic programme for future season Body to the President for his approval. Constitution and Composition Powers AUTONOMOUS BODY OF LA SCALA IN MILAN 1936- 1946 Supervisor Direction Committee Auditors 38 • Two appointed by Prefect; • One by Podestà All subject to approval by Ministry for Popular Culture of the the Appendix Figure n. 4:Estate assets of financial situation of 1931-32 39 Appendix Figure n. 5 Liabilities of financial situation of 1931-32 40 Appendix Figure n. 6 Incomings of Economic Account of 1931-32 41 Appendix Figure n. 7 Costs of Economic Account of 1931-32 42 Appendix Figure n.8 Estate assets of financial situation of 1938-39 43 Appendix Figure n.9 Liabilities of Financial statement of 1938-39 44 Appendix Figure n.10 Incomings and profit of Final balance of 1938-39 45 Appendix Figure n.11 Expenses and Losses of Final Balance of 1938- 1939 46