The problem with the Arts Council of Northwest Florida is not that it “over-allocated” funds. In documents received by the IN, it appears the arts organization was not giving its member organizations, which includes the Pensacola Symphony, Pensacola Little Theater, Pensacola Children’s Chorus and others, the funds that had been given to the Arts Council solely for the purpose of grants to its members.
There was no over-allocation of the government funds- the allocations approved by the county and city simply weren’t reaching the intended recipients. Now it could be the Arts Council over-allocated funds that it expected to raise from its fundraisers and other sources.
The Miscellaneous Appropriations Agreement between Escambia County and the Arts Council, dated March 5, 2009 signed by executive director Catherine Guin, gives the Arts Council $100,500—$40000 for salaries, $60,000 Grants to Escambia Organizations and $500 Economic Impact Study. There is no overallocation – the money is for $60000 for grants and the reports submitted to the County show only $60,000.12 being given to the members from Oct. 1, 2008-Sept. 30, 2009:
Artel $1250.04
Ballet Pensacola $7,500
Belmont $1250.04
Children’s Chorus $799.92
Perdido Bay Tribe $1250.04
PLT $12,105
PMA $10,040.04
Symphony $10,683.96
The problem is these organizations didn’t receive the checks. They got a few checks, but several are still owed money.
The county funds the $100,500 over 12 months. Arts Council sends a report of its disbursements -showing checks to these groups- and the county reimburses them. But the checks aren’t being mailed to the groups.
The City has a similar problem and should be auditing the books, too. The Miscellaneous Appropriations Agreement between the City of Pensacola and the Arts Council of Northwest Florida is dated Oct. 1, 2008. It’s signed by Dina Thorsen and Catherine Guin. The funds are to be used only for “Arts Organizations” – $60,000. The City gives them the money in one lump sum in October. At the end of the fiscal year, the Arts Council gives the City a report.
Artel: $1,250.04
Ballet Pensacola: $7,500
Belmont: $1250.04
Children’s Chorus: $799.92
Choral Society: $1250.04
Fiesta Barbershop Chorus: $1250.04
Jazz Society: $1,250.04
Pensacola Opera: $11.370.96
Perdido Bay Tribe: $1,250.04
PLT: $12105.00
PMA:$10,040.04
Symphony:$10,683.96
Total: $60,000.12
Again the groups aren’t getting all the checks.
We are also hearing that there has been a problem for years with the Arts Council sending out checks that were dated several months before. For example, a group might receive in November a check dated in August or September. The groups tolerated it, but in the last fiscal year 2008-2009, the checks stopped all together. And that’s when the county commissioners started to get complaints.
Artel combined allocation $2500, amt owed $624.94
Ballet Pensacola $15,000, owed $3750
Children’s Chorus $2500, owed $1433.44
Choral Society $2500, owed $833
Pensacola Symphony $21,367.92, owed $5341.98
PMA $20,080.08, owed $3,346.68
PLT, $24,210, owed $4035
The audit by the Clerk of Courts/Comptroller will verify the information I’ve been given and will give us a fuller picture.
On the surface, it does appear that tax dollars that were approved for grants to arts groups were instead used to float the day-to-day operations of the Arts Council. As fundraising declined the Arts Council had no mechanism to cover checks to the arts groups and instead sat on the checks. As the revenue hole grew, the Arts Council then needed the next year’s allocation from the City of Pensacola to pay checks written for the prior fiscal year. Then the hole got too big to cover up.
Popularity: 8% [?]
$40,000 in the budget for salaries to pay salaries totaling some 98,000. not including overhead for ……..2 people to pass out the money.
Wouldn’t the money have gone further if the governments giving wrote a few more checks directly to intended recipients?
You ain’t seen nothin’ yet. Audit’s finished. State’s Attorney takin a peak.Front Porch move over, here come th pro’s. Somebody’s been tellin ya, it just ain’t right!What about the Cinco Banderas Trust Fund. Oh No!! Not that too??? Where’d the $$$$dollars go???
From Saturday’s PNJ: The council’s annual revenue is about $325,000, with the money coming from Escambia County, the City of Pensacola, state and federal grants and private memberships.
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Furthermore it states they paid out $89,000 in salaries to just 2 people, representing 27% of their income. That is obscene. According to experts any group of this kind that spends over 25% on itself is a scam outfit. Their salaries together with their overhead and cost of keeping the lights on, how much of each donated dollar actually went to the designated organizations? My guess is less than 50 cents, making the Arts Council officially a scam.
So the major allegation seems to be the council delayed payment to old accounts until they got fresh money in from the top. Ponzi, anyone? I hope this is just a case of an inept manager trying to rob Peter to pay Paul but post-Madoff, color me suspicious.
David is correct, I missed the $25,879 in my initial read. Two earlier returns show total expenses to be greater than total revenue, supporting Rick’s theory of delaying grant payments until new funding arrived.
The Arts Council posted on their 2008 990, they received $25,879 for Arts Tag money. That money is from the Florida Department of Highway Safety and Motor Vehicles for all of the arts tags purchased in Escambia County. However, the Department said they only sent the Arts Council $8,562.26 for the 2007-08 fiscal year. I’ve heard of people lying on their tax returns, but never a not-for-profit and never to report more income than they actually received. I don’t think they’ve received any money from the FL Humanities Council either, but I’m not positive. They do receive money from the Florida Arts Council through the Florida Division of Cultural Affairs. Last year they received two grants. One for $5,000 (same as requested) for refurbishing the Cinco Banderas Collection, and the other for $9,848 ($40,000 requested) for salaries. Neither grant was intended to help the grant pool for the other arts organizations.
The 2008 tax return lists revenue of $325k and the sources are described as the County and the City. There is no mention of state-source funding.
Expenses are listed as $321k.
If they reported checks written for reimbursment and did not send them it may constitute fraud? Where is our States AG?
Bill, the reason for the Arts Council’s existence is to act as an umbrella organization for local arts oriented not for profit groups. This allows daughter groups to accept tax deductable donations under the IRS 501(c)3 certificate granted the Arts Council. Most smaller groups can’t qualify on their own. Another important role of the council is to help members obtain federal, state and private grants and to act as a clearing house for grants and donations and to disburse contributions. This is apparently how they got into trouble. There is far more involved here then just county money. Each year the local Arts Council receives big money from the Florida Humanities and Florida Arts Councils as well as large private and federal grants. Once all the records are made public we will no longer be talking about a thousand bucks here or there, but about millions over the past few years. Looks like somebody had their hand in the cookie jar and is probably heading to prison.
[...] Outzen on Arts Council finances. Rick’s Blog analyses the finances of the recently-imploded Arts Council of Northwest Florida. According to Mr. Outzen, the Arts Council was not passing through all of its contributions intended for member organisations. [...]
Why, may I ask, is an outfit such as this needed? Let the county staff recommend the amounts to organizations that request it, to the board, let them approve, and give the money to Ernie Lee. He will know where it goes. Or better still, stop giving money to these organizations. Good, they may be, but let them support themselves are be gone.
OH, SNAP!
Don’t be shocked Nick. If the summary reports to the County submitted by the Arts Council stated they paid all of the arts organizations for months they actually had not in order to get the next month’s check, that’s criminal. As Rick said, we’ll see what comes out of the audit.
I’m just sayin’
Having seen the inner workings of the Arts Council several years ago I am not surprised this implosion has finally happened. I was a volunteer chair of a local not-for-profit and became involved with the Council but we left after a year due to what we percieved to be gross carelessness in record keeping and banking. I would be shocked if any criminality were involved, just laziness and carelessness with other people’s money. On the other hand, with the lax rules and inattentiveness that pervade the Council one bad apple could really cleaned up financially. I hope that is not the case. At any rate, I am glad this has finally been exposed and extremely tight fiscal controls will be put into place when the next arts group tries to rise up.