The Music Center’s refusal to fully open its books to Los Angeles County auditors isn’t sitting well with Supervisor Michael Antonovich, who is calling for the downtown performing arts center to share financial information without restrictions.
“The county auditor needs access to all of the financial records to ensure that the county’s contribution is being maximized,” Antonovich said in a written statement Thursday -- referring to $25 million in county government funding that accounted for 40% of the Music Center’s spending in the fiscal year that ended June 30.
“The Music Center’s position conflicts with written operating agreements between the private nonprofit board and the county government,” Antonovich said. “Those agreements give the county the right to audit all transactions relating to the Music Center.”
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Antonovich’s position conflicts with that of Supervisor Sheila Kuehl, who had said Wednesday that she is satisfied that the Music Center had handled the audit properly.
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Kuehl and Rachel Moore, the Music Center’s new president, pointed to the language of the July 7 motion in which the Board of Supervisors ordered the audit, which directed auditor-controller John Naimo to “conduct an audit of the general fund’s Music Center budget to review the use of county funding.”
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Kuehl and Moore said the Music Center had in fact provided all the records that the motion called for: those pertaining to how it used county funds that cover landlord-like expenses (such as maintenance, security and ushers) at the four-venue, county-owned arts campus.
Moore issued a written response to Antonovich’s call for fuller disclosure:
“We have provided substantial information ... to [comply] with the motion approved by the Board of Supervisors. Importantly, we have already set up a meeting with the County CEO and have reached out to board members to begin dialogue and are committed to strengthening the relationship between The Music Center and the County of Los Angeles.”
Supervisor Hilda Solis on Wednesday had issued a response to the audit that also showed concern about records having been withheld: “If there are ambiguities about the type of information that should be disclosed to protect the county’s major investment, those must be addressed and clarified immediately.”
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The bulk of the Music Center’s money comes from private sources such as donations and ticket sales, and funds its non-landlord functions, such as putting on performances and running an arts education program.
The question is whether county auditors should have been given access to those accounts instead of a glimpse at just $25 million out of a total 2014-15 operating budget of $62.4 million.
The 16-page audit report issued this week said Naimo tried to go further -- and that the 1963 agreement that lays out the relationship between the county and the Music Center’s nonprofit board says that “the county has the right to audit all transactions relating to the Music Center.”
The report included a heading entitled “limited access to records” in which Naimo noted that “during our audit, [the Music Center’s] management indicated that they strongly believe that the county only has a right to access their records that are related to county funding, and denied our request for access to other records. As a result, we did not have access to ... records relating to ... expenditures in areas such as education and programming.”
The Board of Supervisors ordered the audit in July, after reports detailing financial difficulties that hit the Music Center after its December 2014 50th-anniversary gala celebration fell short of fundraising goals.
In the ensuing months, the Music Center laid off 11 employees, dropped a respected, decades-old program that had sent teaching artists into public school classrooms, and saw the departure of several department heads.
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Antonovich ended his statement Thursday by urging his fellow supervisors and county Chief Executive Sachi Hamai “to engage with ... Moore to reenergize and further improve the operations of the Music Center.”
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