August 4, 2008

City Auditor Laura Doud Releases Long Beach Museum of Art Inventory Audit

Audit Finds Deficiencies in Accounting for and Safeguarding City-Owned Art
 

Long Beach City Auditor Laura Doud released an inventory audit today of the Long Beach Museum of Art Foundation. This is the second phase of a two part audit. The first phase, released in early June, was an audit of the Museum Foundation’s capital campaign fundraising effort to finance its renovation and expansion project.
 

Click here to download the audit.

The objective of this audit was to conduct a complete inventory and to assess the controls over inventory to ensure that all City-owned artwork is fully accounted for and properly safeguarded. The audit focused on the systems for tracking how many pieces of art the City owns, where they are located and what they are worth. City-owned artwork can be found throughout the City, not solely within the walls of the museum. The scope of this audit was limited to the review of artwork managed by the Foundation.

The Long Beach Museum of Art was established as a municipal City-owned and operated art facility in 1950. In 1985, the City entered into an agreement with the Foundation, a nonprofit public benefit corporation, for the operation and maintenance of the Museum, as a public/private partnership.

Since February 1999, there have been two agreements, a lease for the property and an “Agreement to Manage the Art Collection.” The lease prescribes the standards for the use and operation of the premises, while the Agreement to Manage Art identifies the Foundation’s obligations to adequately insure, store, register, document, exhibit, and conserve the City’s art collection, and prescribes the amount of the City’s annual monetary support to the Museum.

City Auditor Doud, while pointing out deficiencies, also acknowledged the progress made by the current management at the museum. “It is important to note that the Foundation brought in new management in November 2006. We recognize that controls are being put in place to ensure that the problems identified in this report do not happen again.” Doud stated.

 
The key findings identified in the inventory audit are that regular inventories have not been performed resulting in missing pieces, incomplete records, and unknown ownership of numerous pieces of art. In addition, current appraisals of agreed upon pieces of art have not been performed, and over 40% of City-owned art is stored off-site in conflict with the Agreement to Manage Art. The audit report provides detailed recommendations to address and resolve these issues.

“The City owns some very valuable pieces of art. It is critical that proper controls are in place to fully account for and protect the City’s assets,” commented City Auditor Laura Doud.

The City’s assets exist not only to serve today’s residents but those of future generations, and thus the City Auditor’s Office recommends that management of the City and Foundation collaborate to develop a comprehensive strategy to address each of the report findings, and advise the City Council and City Auditor as to progress and plans for implementation in 6 months.
 

Click here to download the audit.

Staff Contact: Olivia Silva Maiser, Director of Communications at 562.570.6434 or at Olivia_Maiser@longbeach.gov