The Cultural Development Fund Law is a set of regulations governing the Cultural Development Fund in the Kingdom of Saudi Arabia. It outlines the powers and competencies of the Fund. The law was issued on January 7, 2021, comprising fifteen articles.
Establishment of the Cultural Development Fund
Article Two of the Cultural Development Fund Law states that a fund called the "Cultural Development Fund" is established under this law. The fund has legal personality and financial and administrative independence. It is organizationally linked to the National Development Fund, with its headquarters in Riyadh City. The fund may establish branches or offices as needed. The fund aims to contribute to supporting and sustaining cultural development and related fields, in accordance with the approved strategies and policies in this regard.
Powers of the Cultural Development Fund
Article Four of the Cultural Development Fund Law outlines the powers of the fund, granting it all necessary authorities to achieve its objectives without prejudice to the powers of the National Development Fund, including the following:
- Lending or financing in all its forms to establishments, associations, or non-governmental organizations working in various cultural fields, in supporting services, or in technology development or infrastructure projects that serve them.
- Accepting mortgages and other guarantees of payment.
- Providing guarantees to entities it owns, contributes to, lends to, or finances.
- Investing funds to achieve its objectives, according to what is approved by the board.
- Acquiring and disposing of all types of assets, in accordance with the regulations governing such actions.
- Encouraging investment in fields related to the cultural sector.
- Representing the Kingdom regionally and internationally, within the scope of its areas of work, before counterpart entities or those related to its fields.
- Concluding agreements and memoranda of understanding related to its areas of work with relevant entities in countries, organizations, and international bodies.
- Providing non-financial services to individuals or legal entities primarily working in cultural fields.
The direct and indirect liabilities of the Cultural Development Fund must not exceed the value of its assets.
Board of Directors in the Cultural Development Fund Law
Article Five of the Cultural Development Fund Law stipulates that the fund has a Board of Directors chaired by the Minister of Culture and composed of five members nominated by the chairperson, including a member from the National Development Fund. Their appointment is issued by a decision of the Chairperson of the Board of Directors of the National Development Fund. The board membership lasts for three years, renewable once, and the chairperson selects a deputy from among the members.
The Board of Directors of the fund is the authority responsible for setting the fund's general policies within the limits of its law and related regulations. It assumes all competencies and powers necessary to achieve its objectives, making decisions, taking actions, and adopting measures as deemed appropriate, including the following:
- Approving the strategies and policies related to the fund's areas of work, along with the necessary plans, programs, and projects for their implementation.
- Supervising the execution of the fund's assigned competencies.
- Approving the organizational structure of the fund.
- Approving the financial and administrative regulations governing the fund, along with other necessary internal and technical regulations for managing its affairs.
- Approving lending or financing in all its forms, as well as the fund's investment policies.
- Approving the acquisition, sale, or mortgaging of assets in all their forms.
- Approving the establishment of branches or offices for the fund.
- Approving the fund's budget draft, final account, and annual report on its activities, and submitting them to the National Development Fund.
The board has the authority to form permanent or temporary committees from its members or others, assigning them tasks as deemed appropriate. The decision to form each committee specifies its chairperson, members, tasks, and compensations. The committees may seek assistance from others as needed to accomplish their assigned tasks. The board may delegate some of its competencies to its members, the Chief Executive Officer, any committee, or staff of the fund as required for work progression. Regarding the board meetings, the law states that they are convened by the chairperson at least every three months, or whenever necessary. A quorum for the meeting requires the majority of its members to be present.
Executive management in the Cultural Development Fund Law
The Cultural Development Fund may have a Chief Executive Officer, appointed and dismissed by a decision of the Board of Directors, which also determines the CEO's salary and other financial benefits. The CEO serves as the executive officer of the fund, with responsibilities confined to what is stipulated in the law and what the Board of Directors determines in terms of powers and competencies, including the following:
- Overseeing the implementation of the Board's decisions and preparing for the Board's meetings.
- Supervising the workflow of the fund in accordance with the powers assigned to them and the regulations of the fund.
- Proposing strategies and policies related to the fund's areas of work, along with the necessary plans, programs, and projects for their implementation, and presenting them to the Board.
- Proposing investment policies for the fund’s assets.
- Supervising the preparation of the budget draft, final account, and annual report of the fund.
- Representing the fund before the courts, government entities, and other relevant institutions.
Financing in the Cultural Development Fund Law
According to Article Nine of the Cultural Development Fund Law, the fund is allocated an independent annual operating budget, and its fiscal year aligns with the fiscal year of the state. The capital of the fund is estimated at SAR500 million, and the capital may be adjusted by a decision of the Council of Ministers based on a proposal from the Board of Directors of the National Development Fund.
The fund's resources consist of state support provided to serve its lending or financing activities in all their forms, cash flows from loans disbursed from its capital, returns generated from its assets and investments, as well as donations, gifts, grants, bequests, and endowment revenues accepted by the Board. Additionally, it includes fees for services and activities for which the Board deems it appropriate to charge fees. The fund opens an account with the Saudi Central Bank or any licensed bank operating in the Kingdom to manage expenditures in accordance with its approved budget and financial and administrative regulations.
Lending or financing in all its forms provided by the fund enjoys the benefits and guarantees stipulated in accordance with the State Revenue Law and is subject to collection in the same manner as other public funds.
Without prejudice to the competencies of the General Court of Audit, the Board of Directors appoints an external auditor licensed in the Kingdom to audit the fund's accounts, transactions, financial statements, annual budget, and final account. The auditor's report is submitted to the Board, and a copy of the report is provided to the General Court of Audit after it has been approved by the Board.
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