MOCA gives further information to attorney general’s office as financial investigation continues
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
It has been more than five months since L.A.’s Museum of Contemporary Art announced that the state attorney general’s office, which enforces state laws governing nonprofit organizations, had asked for documents concerning its finances -- the withered state of which became a running news story last November and December.
Until today -- when spokesman Scott Gerber said, ‘It’s still an ongoing investigation, I can’t go into details’ -- the attorney general’s office hadn’t even acknowledged that there was an investigation.
But Charles E. Young, the former UCLA chancellor who arrived in December as the chief executive in charge of putting MOCA back on solid financial and managerial footing, said Wednesday that the museum’s legal counsel has been in regular touch with the L.A.-based deputy attorney general who is ‘managing the investigation, examination, whatever it is.’ Young said he met with her last month and provided additional information.
‘Hopefully, there will be a conclusion in the very near future,’ he said.
Experts on nonprofit management have said that a possible focus is MOCA’s spending-down of its endowment to pay operating costs; the museum has acknowledged, and its auditors have noted year in and year out in MOCA’s financial statements, that it borrowed millions from its endowment to pay operating costs.
At issue could be whether money that donors had given for specific purposes was used for other expenses, without first getting the givers’ OK to lift a ‘restriction’ on the donation’s use. MOCA’s accountants first noted in mid-2001 that the museum had ‘deficiencies’ in its endowment, which then stood $3.8 million below ‘the level required by donor stipulations.’ By mid-2007, a little more than a year before the global financial meltdown dashed any hopes of replenishing the endowment and restoring its restricted accounts without emergency measures, the ‘deficiency’ had grown to $17.2 million.
-- Mike Boehm
MOCA Grand Avenue building. Credit: Brian Vander Brug/Los Angeles Times