Turn-around plan hits a pothole but the new leadership maintains a confident air and are conducting an internal investigation without involving the police.
The Seattle Times (Ashley Bach) reports that the Bellevue Arts Museum (EIN 91-6028261 Form 990) has fired its CFO of the last two years and is investigating the loss of $200,000. (Names were withheld in the story, but the Form 990 from 2005 indicates that the CFO at that point was Janet Ellinger, with a salary of $80,000.) The museum is conducting a forensic audit on its own and executive director Michael Monroe plans to resolve the issue without involving the police.
The Seattle Post-Intelligencer (art critic Regina Hackett) provides the background that the former Bellevue Art Museum closed in 2003 due to financial problems, but reopened with a slightly different name (now Arts, not Art) and new focus as a crafts museum. The 2005 Form 990 shows income of $2.5 million and expenses of $2.7 million, for a net loss of just $150,000 and a still comfortable cash position. The city of Bellevue has earmarked $2 million for support of the revived museum, according to the Seattle Times article.
The Post-Intelligencer asked Richard Andrews, the director of the Henry Art Gallery at the University of Washington, whether this kind of theft was common. He said they were rare, and I agree. Even though I try to pass on a fair sampling of the charity embezzlement cases in this blog, typically it takes more than a couple of years for the amount to reach $200,000. Come to think of it, it's uncommon for a fraud to come to light this quickly.
The Seattle Times sought a reaction from Daniel Borochoff, the president and founder of the American Institute of Philanthropy (EIN 33-0491030 Form 990). Mr. Borochoff's suggestion was that the museum try to find a volunteer rather than hire an accounting firm to do the audit. This seems like a really bad idea to me, especially if things don't go well and litigation is needed. It's telling to see to what lengths Mr. Borochoff is willing to go to keep overhead down.
My feeling here is that a loss of $200,000 cash shouldn't be handled internally. That might be a valid approach if the loss were a tenth of that.