Video: “The Art and Design of Howard Smith” at the Palm Springs Art Museum
Preview “The Art and Design of Howard Smith” at the Palm Springs Art Museum
The Palm Springs Art Museum has been in flux since former Executive Director/CEO Adam Lerner’s abrupt decision to leave in April. A new Los Angeles Times article uncovered a financial crisis that may have contributed to that decision.
The museum’s board recently experienced a mass exodus, with a third of the institution’s trustees resigning, and its board has fallen below the minimum number legally required to operate.
To further complicate matters, on Nov. 18, an article published by the Los Angeles Times reported that the museum’s accounting firm, Eide Bailly, issued a warning letter concerning the misreporting of endowment spending, improper valuation of donated and deaccessioned art, and incorrect admission revenue recording.
Internal audit documents submitted to and examined by the Los Angeles Times show that the museum has been experiencing financial difficulties for at least six years. These issues include discrepancies in its endowment, questionable reclassifications of funds, and a heavy dependence on funds withdrawn from the endowment. Currently, the museum’s $17 million endowment is only sufficient to cover a $10.5 million annual budget, creating a precarious financial situation for an institution of its size.
Although the audit’s notes indicate that it is “highly unlikely” the funds were stolen, they highlight poor or confusing accounting practices within the museum, which created the illusion of healthier finances than were actually present. By 2021, the longtime external auditors had resigned, raising further concerns.
In a statement to The Desert Sun, Board Chair Craig Hartzman defended the museum’s financial oversight, saying reviews have been “thorough and deliberate” and guided by independent experts. He added that the board has been consistently briefed and is “close to completing the final item” from a 2021 review. But Hartzman did not directly address the recent audit’s findings or the wave of trustee resignations that have left the board below its legal minimum.
“As 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,” Hartzman said in a statement.
The leadership crisis started in April
In April, Executive Director/CEO Adam Lerner announced his resignation after four years, reportedly while negotiating a three-year contract renewal, followed by several trustees. Chief Curator Christine Vendredi was named Interim CEO following Lerner’s departure, with the Board of Trustees tasked with conducting a national search for the position. In September, Vendredi was named as the new CEO, but former trustee Patsy Marino told the Los Angeles Times in a Nov. 10 article that she resigned following “inappropriate interference and attempts to influence the process” by the museum’s executive committee, individual trustees, and unidentified museum staff and donors.
Kevin Comer, a former trustee, resigned on Nov. 6 after following his lawyer’s advice. In his resignation letter to the other trustees, he urged them to hire a law firm and a forensic accounting firm to review the museum’s finances. The museum is currently facing a governance deadlock. With only 19 trustees, it is unable to vote on adding new members or making essential decisions legally.
Despite the turmoil, Hartzman insists the museum is committed to transparency and its cultural mission, and will continue to publish its financial statements and tax returns on its website.
“Above all, the museum remains focused on advancing its mission through inspiring exhibitions, education programs, and community engagement. This season’s slate is shaping up to be our best ever. We are grateful to our staff, volunteers, donors, members, the City of Palm Springs and community partners who support the museum and help ensure that Palm Springs Art Museum remains a vital and trusted cultural resource for the region,” Hartzman said in a statement.
Brian Blueskye covers arts and entertainment for the Desert Sun. He can be reached at brian.blueskye@desertsun.com.