Music Center Discloses Plans to Overhaul Fiscal Operation

In the wake of embarrassing disclosures that the Music Center had seriously overstated its fund-raising achievements for 1991, Music Center Chairman Ronald J. Arnault said Monday that the organization plans major changes in its internal financial workings.

The Music Center, which originally announced that its Unified Fund Drive had met its $17.6 million goal, was forced to admit in August that it had to borrow $3 million to cover a shortfall.

On Monday, Music Center officials released figures showing that the fund drive had fallen $1.3 million short. Arnault said that the $3 million--borrowed from the Music Center Foundation--would cover the $1.3-million fund-raising deficit as well as other capital needs of $1.7 million.

The Music Center blamed the situation on “inaccurate estimates and inadequate budgeting processes.” Arnault said the Music Center’s internal financial systems will be improved to avoid more errors, including the establishment of a separate audit committee and more active review of monthly fund-raising results.

“We’ve worked hard, we’ve analyzed this, we think we understand it,” Arnault said. “We’re putting the things we need in place so it won’t happen again.”

Music Center officials also announced a scaled-down 1992 fund-raising goal of $15.5 million, which will reduce overall allocations to the four resident companies and the Music Center education program by 16%. The resident groups are the Los Angeles Philharmonic, Music Center Opera, Center Theatre Group/Mark Taper Forum, and the Master Chorale.

The size of funding reduction for each resident group has not been determined, Music Center President Esther Wachtell said. Discussions on that issue will begin Monday, she said.