News Column

Auditors: All's OK at the Art Museum

January 24, 2014

By David Hunn, St. Louis Post-Dispatch

Jan. 24 -- CLAYTON -- The St. Louis Art Museum finished a $130 million expansion under budget by $1 million , collects the vast majority of its pledged donations and has millions of dollars more than it needs to pay its bills, according to an audit report released this week. The report, the third in as many years commissioned by the Zoo-Museum District , examined the governance and finances of the Art Museum , and identified no major concerns -- a far cry from the first two audits, of the St. Louis Science Center and the Missouri History Museum . The Art Museum could tighten some financial controls, the auditors said, pointing out that museum leaders didn't always submit itemized receipts for travel expenses, document their pick of vendors correctly or get two appraisals before selling artwork, as is museum policy. The auditors also noted that museum director Brent Benjamin's $670,000 annual compensation package is above average -- sixth among 20 similar art museums across the country, despite the museum's smaller size. And they tallied his various retirement account balances to about $1.27 million . Still, taken as a whole, the examination revealed an institution with a clear chain of command among its several boards, a litany of policies to account for sales and donations, and a $140 million endowment. "I'm very proud of the administration of the Art Museum ," said Robert Lowery , former mayor of Florissant and a Zoo-Museum District board member. "We've now found an institution that is being run properly." Art Museum leaders declined to discuss the report in depth. However, J. Patrick Mulcahy , chairman of the museum's compensation committee, called the auditor's criticisms "manageable," the report, overall, "terrific," and Benjamin worth every penny. "You can't pay too much for great performance," Mulcahy said. "We don't want him to leave." The Zoo-Museum District's first two audit reports were far more critical. The district oversees the disbursement of about $70 million in property taxes to five regional cultural institutions -- $10 million each to the Missouri Botanical Garden , Missouri History Museum and St. Louis Science Center ; and $20 million each to the St. Louis Zoo and Art Museum . The district board recently committed to inspecting one institution every year. The first examination, of the Science Center in 2011, revealed five-figure executive bonuses and highlighted a bevy of vice presidents. The second examination, of the History Museum in 2012, uncovered a million-dollar land deal between the museum and a former board member, ex-Mayor Freeman Bosley Jr ., as well as more than $500,000 worth of vacation-day buyback for former museum president Robert Archibald . In response, local elected officials and Zoo-Museum District board members advocated strongly for cuts to Science Center expenses and a change in History Museum governance. While the commissioners now generally agree that the Science Center is getting back on track, the fuss over the History Museum is ongoing -- and has evolved into a discussion about the future of the Zoo-Museum District itself. Thursday, the St. Louis Board of Aldermen's parks committee adopted a report recommending that the district play a stronger watchdog role. And some district board members, meeting in Clayton , agreed. Lowery said he'd consider withholding money from institutions that didn't perform up to expectations. But the Art Museum report, Lowery said, was "extremely good news." The 195-page document represents an in-depth look at Art Museum finances, policies and governance. The inspection was again performed by the Zoo-Museum District's auditors, Kerber, Eck & Braeckel . The auditors spent weeks at the museum, asked for thousands of pages of records and answered dozens of questions prescribed by the district. They reveal some museum operations worth watching. Exhibitions, for instance, cost $1.4 million but brought in just $320,000 in 2012. The museum's new fancy restaurant and catering business ran a $260,000 deficit in 2013. Its vendor file contains duplicate names, opening the door to potential fraud. But most of the criticisms were small: a $12 glass of wine that slipped into travel expenses; a $50 credit card charge unsupported by a receipt. And the big-picture items were overwhelmingly positive: At the end of 2010, for instance, the museum had more than $20 million in pledged donations, and it wrote off just $12,000 as uncollectable that year. And museum accounts, auditors reported, hold more than 16 times the current assets needed to cover liabilities -- basically, enough cash in the bank to pay bills 16 times over. The report is still technically a draft. The Zoo-Museum District board is scheduled to discuss it on Wednesday. Nicholas J.C. Pistor of the Post-Dispatch contributed to this report. ___ (c)2014 the St. Louis Post-Dispatch Visit the St. Louis Post-Dispatch at Distributed by MCT Information Services

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Source: St. Louis Post-Dispatch (MO)

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