{"id":391438,"date":"2025-11-20T04:26:15","date_gmt":"2025-11-20T04:26:15","guid":{"rendered":"https:\/\/www.europesays.com\/us\/391438\/"},"modified":"2025-11-20T04:26:15","modified_gmt":"2025-11-20T04:26:15","slug":"palm-springs-art-museum-refutes-report-calling-its-finances-into-doubt","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/391438\/","title":{"rendered":"Palm Springs Art Museum Refutes Report Calling its Finances Into Doubt"},"content":{"rendered":"

\n\tA Los Angeles Times<\/a> investigation of the finances of the Palm Springs Art Museum<\/a> claims there are significant problems at the California institution. The museum has issued a statement calling the Times\u2019s reporting into question.<\/p>\n

\n\tThe paper claims that after a January audit, accounting firm Eide Bailly attached to its report a \u201cletter of material weakness,\u201d a standard practice that alerts the client to what the paper calls \u201cthe reasonable possibility that its internal statements are significantly out of whack.\u201d Since then, \u201cat least eight\u201d trustees, or a third of its board, have reportedly resigned. These departures, one apparently based on legal counsel, have left 19 members, short of the 20 required in the museum\u2019s by-laws, says the report.<\/p>\n

\t\tRelated Articles<\/p>\n

\t\t\t\t\t\t\"The<\/p>\n

\n\tEide Bailly reportedly pointed to a \u201cdeficiency in internal control\u201d at the institution, highlighting \u201cproblems with reporting of endowment spending, improper recording of the market value of donated and deaccessioned art, and faulty recording of admissions revenues.\u201d<\/p>\n

\n\tThe museum takes issue with the Times\u2019s reporting, saying, \u201cWe respect the role of an independent press. At the same time, the column is based on selective internal correspondence and does not fully reflect the work we have done with our auditors and outside advisors over the last several years. Some of its characterizations of the museum\u2019s financial condition and board oversight are not consistent with the facts as understood by our board, management, auditors, and independent consultants.\u201d<\/p>\n

\n\tBoard chair Craig Hartzman says in a statement to ARTnews that \u201cOur financial reviews over the past several years have been thorough and deliberate, supported by independent experts who helped us evaluate and refine our practices. The matters identified in 2021 provided a clear path for improvement, and we have followed that path with focus and consistency. The full board has been briefed throughout this process, and everyone who has served during the past four years has been aware and supportive of the work underway. We are close to completing the final item from that review, and the board remains fully committed to maintaining the museum\u2019s financial integrity.\u201d<\/p>\n

\n\tAs for the trustee departures, says the museum\u2019s statement, \u201cAs is typical for a nonprofit board of this size, trustees leave for a range of reasons, including the end of their term prescribed in our bylaws (three years), personal and professional commitments, relocation, and, in some cases, differences of view on governance. And sometimes they simply develop personal grievances based on differences of opinion and other factors.\u201d<\/p>\n

\t\t\t\t\t\t\"A<\/p>\n

\t\t\t\t\tThe Palm Springs Art Museum.<\/p>\n

\t\t\t\t\t\t\t\t\tLance Gerber, courtesy Palm Springs Art Museum.<\/p>\n

\n\tOne trustee\u2019s notes, shared with the Times, indicate a discrepancy in the reported value of the endowment, which dropped by $3 million between 2019 and 2020. Former trustee Kevin Comer, a former managing director at Deutsche Bank in New York, wrote in his notes that \u201cThis is always a red flag.\u201d Comer, the Times points out, also taught accounting and fiduciary management techniques at the Ohio State University.\u00a0<\/p>\n

\n\tIn a letter obtained by the Times, Comer says he resigned from the museum\u2019s board on his attorney\u2019s advice and that he would urge the museum to hire a law firm and a forensic accounting firm. He says this isn\u2019t the first time a task force has made that recommendation.\u00a0<\/p>\n

\n\t\u201cWe do not comment on the contents of individual resignation letters, even though the column specifically referred to the resignation letter of one of the two board members who recently resigned,\u201d says the museum\u2019s statement. \u201cWe can only wonder how and why the Los Angeles Times obtained the letter.\u201d<\/p>\n

\n\tPer the museum, Comer\u2019s advice may have been heeded: \u201cEarlier this year, in response to questions raised about historical accounting practices, the board also engaged independent outside professionals\u2014including an accounting consultant and legal counsel\u2014to review those matters and report their findings. Their work was presented to the board, and any additional recommendations will continue to be considered as part of our normal oversight process.\u201d<\/p>\n

\n\tThe notes suggest that the $3 million discrepancy may have stemmed from a change of some funds from restricted to unrestricted status, which could allow money donated for specific purposes to be reallocated. The reclassification of that money allowed the museum to meet operating shortfalls, the notes say. The Times speculates that the reclassification may have been intended to create a false impression of fiscal soundness.<\/p>\n

\n\tThe museum\u2019s current endowment is just over $17 million, not a large fund, says the paper, compared to the museum\u2019s annual operating budget of about $10.5 million.\u00a0In an email, Hartzman refuted that characterization, saying, \u201cEndowment sizes vary widely in the museum field, and there isn\u2019t a single \u2018correct\u2019 ratio between endowment and operating budget.\u201d<\/p>\n

\n\t\u201cEndowment draws over the past decade totaled roughly $8 million, and contributions to the endowment totaled roughly $500,000,\u201d the notes report, adding, \u201cMost years the museum operated at a loss, including for the last three years when the board believed we were profitable.\u201d The notes also indicate that while a five-person executive committee \u201cmay have been aware\u201d of pressing financial problems, the wider board was not kept informed.\u00a0<\/p>\n

\n\t\u201cBottom line,\u201d says Comer\u2019s resignation letter, \u201cthis is a leadership group that doesn\u2019t know what it doesn\u2019t know, and that is the most dangerous place in which an institution can be placed.\u201d<\/p>\n

\n\t\u201cPalm Springs Art Museum takes its fiscal and fiduciary responsibilities seriously and is committed to operating with transparency and accountability,\u201d says the museum\u2019s statement. \u201cWe will continue to publish our audited financial statements and IRS Form 990 tax returns [on this website<\/a>], and we are preparing additional plain-language information to help anyone interested understand our finances and governance practices.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A Los Angeles Times investigation of the finances of the Palm Springs Art Museum claims there are significant…\n","protected":false},"author":3,"featured_media":391439,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[648,1032,1033,171,185295,67,132,68],"class_list":{"0":"post-391438","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-arts-and-design","8":"tag-arts","9":"tag-arts-and-design","10":"tag-design","11":"tag-entertainment","12":"tag-palm-springs-art-museum","13":"tag-united-states","14":"tag-unitedstates","15":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115580134115486375","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/391438","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=391438"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/391438\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/391439"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=391438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=391438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=391438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}