Legislative Auditor finds no major concerns in Minnesota Orchestra use of public funds.

The Office of the Legislative Auditor just posted its report on a special audit on the use of public funds by the Minnesota Orchestra. MPR news is seeking reaction now on the report, but the summary on the Auditor’s website indicates no red flags on the areas examined. Here is the summary:

Report Summary
State Money Provided to the Minnesota Orchestral Association
Special Review

Financial Audit Division Report 13-10 Released June 13, 2013

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Background
In response to a request from legislators, the Office of the Legislative Auditor (OLA) conducted a special review of money the State of Minnesota provided the Minnesota Orchestral Association in fiscal years 2010 through 2013. The state money included grants from the Minnesota State Arts Board for the association’s general operations (as well as other targeted purposes) and bond proceeds for costs related to the renovation of Orchestra Hall. Legislators expressed concern that this investment of public money is threatened by a protracted contract dispute between the association and the orchestra musicians. The association instituted a “lockout” of the musicians in October 2012, and the contract disputes remains unresolved.

Conclusions
Based on the scope and objectives of our review, we reached the following conclusions:

1.The Minnesota Orchestral Association complied with applicable legal requirements related to the grant money it received from fiscal year 2010 through fiscal year 2012 from the Minnesota State Arts Board.

2.It is uncertain how much money the Minnesota Orchestral Association will be allowed to use from its 2013 Minnesota State Arts Board grant. It is also uncertain which costs may be paid with 2013 grant money. The terms of the grant agreement may allow the association to use money for costs it incurred during the time the Minnesota Orchestra did not perform due to the association’s “lockout” of the orchestra musicians. The association and the Minnesota State Arts Board have different interpretations of which costs are eligible for reimbursement under the 2013 grant agreement.

3.The payment process for the costs related to the Orchestra Hall renovation project included adequate internal controls to ensure that money appropriated from the Bond Proceeds Fund was used in accordance with applicable finance-related legal requirements. We did not identify any payments for costs that did not comply with applicable legal requirements.

4.In his testimony to legislative committees in 2010, the president of the Minnesota Orchestral Association made brief and generally positive remarks about the association’s financial condition, and legislators did not ask for additional information. While there are indications that the president and some board members had significant concerns about the association’s financial condition, it is not clear that a presentation of those concerns to legislative committees would have affected the Legislature’s decision to support the Orchestra Hall renovation project.

  • Regina

    Yet, the season could have happened, as musician supporters have pointed out. Certainly the last concerts could have been produced – had management wanted that to happen. Guess they didn’t. And it’s going to cost them some musicians…and it’s going to cost them some public support, too.

    • Ellen

      Can you explain something to me…?
      Why would someone join the board of a symphony orchestra…if they weren’t passionate specifically about orchestral music? I’m including the people who think in terms of “legacy” and “sustainability for the future”…because those very people are the ones trashing the present.

      • Sarah

        This board is huge….about eighty people. I’d guess they were told that it was a prestigious thing to do – and I think some of them really do enjoy orchestral music.
        But you’re right: there’s a huge disconnect between “enjoying orchestral music” and “locking out the musicians” – as if the (imagined) future is WAY more important than the very real present.
        They Screwed Up, bringing in Michael Henson and those philistines. That’s their actual legacy.