U.S.—MUSEUM OF CONTEMPORARY ART (MOCA) ORDERED TO REVAMP BUDGET PRACTICES; TRUSTEES TO RECEIVE FIDUCIARY TRAINING

The Los Angeles Times reported that the California Attorney General’s office determined that the Museum of Contemporary Art skirted state law for years, on its way to financial meltdown in late 2008, and ordered the museum to hire a consultant to help improve its financial management.  The attorney general also required MOCA board members to receive special training in their fiduciary duties.  The findings and “required corrective actions” were included in a two-page letter to MOCA last November.  The Attorney General”s office provided it to The Times after repeated inquiries.  Overspending and investment losses drained MOCA’s investment portfolio from a peak of $38.2 million in mid-2000 to $5 million in December 2008.  It has rebounded to $14.2 million as of March 31, museum officials said, fueled largely by fresh donations.  Belinda Johns, senior assistant attorney general for charitable trusts, concluded that “unreasonably enthusiastic expectations” by museum management led to overspending and that the board apparently was not informed in time to act when budget deficits loomed.  Johns also found that MOCA did not follow the law when it paid general expenses from endowment funds that were restricted for specific uses.

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