Arts council noncompliant with state law, auditor says

The executive director of the Houma Regional Arts Council was dismissed after the board of oversight discovered the council was noncompliant with state auditing laws, the board’s newly appointed treasurer Joe Kopfler said.

Glenda Toups, the executive director for roughly five years, also filed a letter of resignation, Kopfler said. Toups could not be reached for comment.

“She’s no longer working with us,” Kopfler said. “We’re not satisfied with her performance.”

The arts council distributes state Decentralized Arts Funding to sub-grantees throughout a six-parish area as a regional cog in statewide effort to ensure art and culture funding is made available to every parish in the state. For the 2013 fiscal year, the council was allotted $54,000 for disbursement, according to state officials.

Because of the noncompliant designation, the council is unable to process any further payments for the 2013 fiscal year to sub-grantees through the DAF program, according to a letter sent to all sub-entities awarded a grant – and expecting funding – through the Houma Regional Arts Council. Cathy Hernandez, executive director of the state Department of Culture, Recreation and Tourism’s Division of the Arts, signed the letter.

“We certainly are unable to retrieve FY13 dollars,” the letter reads. “However, we are reviewing our FY14 resources to search for ways to assist the sub-grantees as quickly as possible, and hope to be in touch with you very soon in this regard.”

One such sub-grantee is the Terrebonne Parish Library System, which was awarded $2,425 in DAF funds for the Jambalaya Writers’ Conference in April. The library has yet to receive any of those funds, but spokeswoman Rachel LeCompte said the payment typically isn’t made until December.

Hernandez’s letter, dated Sept. 13, said the state is in the process of investigating arts council records to determine which of the council’s commitments have been paid.

The Arts Council of Greater New Orleans is slated to administer 2014 grants in the Houma council’s stead, the letter says.

Jacques Berry, communication director for Lt. Gov. Jay Dardenne, said the Department of Culture, Recreation and Tourism plans to use grant-administration fees from 2013 and 2014 to help pay the 2013 grant obligations. The state will make up the balance using in-house sources, he added.

“We’re not going to have any grantees not get their money,” Berry said.

The arts council had received $40,000, which was 75 percent of its 2013 DAF allotment, Berry said. The state is investigating where that money is and how it has been spent, he added, as it has not been delivered to the sub-grantees. The state is operating under the assumption that the money is not available to be obtained, according to Berry. “We’re not counting on that the pay the grantees for the ’13 budget year,” he said.

In addition to the state’s inquiry into arts council records, Kopfler has already begun an internal review of the council’s spending, he said. “It looks like to me there was a failure to segregate grant funds,” he added.

Kopfler said he was notified two weeks ago of the noncompliant status.

The Legislative Auditor’s Office placed the arts council on its noncompliant list in July after the council failed to file its fiscal year 2012 report by the June 30 deadline, according to the auditor’s website.

Agencies that handle state funds are required to engage a private CPA firm to conduct their audits within 60 days following the end of a fiscal year. That firm is then required to submit its report to the legislative auditor within six months.

The Houma Regional Arts Council signed a letter of engagement with the firm Stagni and Company, but the letter was not forwarded to the auditors, meaning the service could not begin, according to Kopfler. An engagement letter is prepared by the auditing firm and includes price rates.

“That’s what I learned a week ago,” said Kopfler, an arts council board member for the past 10 years.

When asked whether the arts council’s board should have been aware that an audit was not taking place as required, Kopfler said it depends on the level of engagement by the council’s executive committee.

“It depends upon who’s at the (board) meeting,” he said. “There were some meetings where there wasn’t a quorum. We lost our treasurer somewhere along the line, I found out. The fact that they were noncompliant, I don’t think anybody knew it until I brought it to their attention.”

Kopfler was appointed as treasurer last week. The position had been vacant since early July, according to former treasurer Shirley Porche. Porche resigned before she moved out of Louisiana and said she did not know of anything amiss with the council’s finances at that time.

In addition to the state grant program, the arts council is tasked with administering Terrebonne Parish grant funds to strengthen arts programming.

Parish government makes direct disbursements of the parish grant to sub-grantees, who are chosen by a panel led by the arts council, so the money does not filter through the arts council.

The 2013 parish grant budget was capped at $18,000. However, the available funds dropped to $12,000 for that fiscal year because the arts council was late in invoicing the parish for its grant administrative fees for the four-year span from 2009-2012, said Jamie Elfert, the parish’s finance director. That invoice was received and satisfied this year, Elfert said.

For the $12,000 in available ’13 funds, the parish has not received any invoices, Elfert said. She said it would be “premature” to say whether the arts council’s noncompliant status with state auditing law would restrict that pot of money this year or the grant’s future availability.

The DAF program began in 1995 as a way to ensure the arts were made available to all of Louisiana’s parishes. The state is divided into nine regions, each of which is overseen by a regional council.

The Houma Regional Arts Council reallocates its state grants to artists and nonprofit and government organizations in Region III, comprised of Assumption, Lafourche, St. Charles, St. John, St. James and Terrebonne parishes.

For the fiscal year 2014, the Arts Council of Greater New Orleans will administer DAF grants for Region III. The amount of money available to the region’s artists will not change.

Among the council’s notable accomplishments under Toups was the initiation of Houmapalooza, the bi-annual, free-admission event in courthouse square that presents 10 unsigned and original bands over the course of the day.

The council also shepherds The Big Read, helped pioneer the monthly outdoor movie series and contributes to the financing of sculptures along Bayou Terrebonne. It supplements the annual Jambalaya Writer’s Conference, Swamp Stomp, local theater productions and other events throughout the region.