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Video: “The Art and Design of Howard Smith” at the Palm Springs Art Museum<\/p>\n
Preview “The Art and Design of Howard Smith” at the Palm Springs Art Museum<\/p>\n
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.<\/p>\n
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.<\/p>\n
To further complicate matters, on Nov. 18, an article published by the Los Angeles Times<\/a> 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.<\/p>\n 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issues include discrepancies in its endowment, questionable reclassifications of funds, and a heavy dependence on funds withdrawn from the endowment.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.<\/p>\n 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.<\/p>\n In a statement to The Desert Sun, Board Chair Craig Hartzman defended the museum\u2019s financial oversight, saying reviews have been \u201cthorough and deliberate\u201d and guided by independent experts. He added that the board has been consistently briefed and is \u201cclose to completing the final item\u201d from a 2021 review. But Hartzman did not directly address the recent audit\u2019s findings or the wave of trustee resignations that have left the board below its legal minimum.<\/p>\n “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.<\/p>\n The leadership crisis started in April<\/p>\n In April, Executive Director\/CEO Adam Lerner announced his resignation after four years<\/a>, 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<\/a>, but former trustee\u00a0Patsy Marino told the Los Angeles Times in a Nov. 10 article<\/a> that she resigned following \u201cinappropriate interference and attempts to influence the process\u201d by the museum’s executive committee, individual trustees, and unidentified museum staff and donors.<\/p>\n 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.<\/p>\n