A new city audit released this week raises thorny questions about management of the Long Beach Museum of Art, including what it calls the improper spending of $1.6 million in restricted funds earmarked to pay off bonds for the museum's $6.5-million expansion.
A second portion of the audit, due next month, is expected to document that some works of art are missing from the 3,000-piece collection of the city-owned museum just east of downtown Long Beach.
Two works by Russian artist Alexej Jawlensky, part of the museum's most valuable collection, are missing, museum executive director Ron Nelson said Wednesday. The abstract portraits, part of the museum's Wichner Collection, were together appraised at $150,000 in 1999 but are likely worth at least $200,000 to $300,000 apiece today. They appear to have gone missing after a 2000 tour to Paris, Nelson said.
The museum director said he could not provide a total number of pieces that were missing, adding, "It's a very small amount" of the museum's total collection. Also unaccounted for are an empty picture frame and posters. "I'm not minimizing it, but they don't hold the value we're looking at" with the Jawlenskys, Nelson said.
The former executive director, Harold B. Nelson (no relation to the current director) was pushed out of his position in late 2006, after 17 1/2 years on the job. Knut Thune, the museum's finance director, was terminated earlier.
A complete inventory of museum pieces will be completed in July, said City Auditor Laura L. Doud, who began her audit in 2007 after the current museum management contacted the city with concerns about funds to pay off city bonds.
The financial portion of the audit has found that museum managers improperly spent $1,588,000 in restricted money to finance day-to-day expenses. That money was supposed to help pay off $3,060,000 in city bonds by the September 2009 due date; only $388,000 is left in that account, the audit states.
The museum has failed to raise enough money for the repayment, and it inappropriately spent capital campaign money earmarked for that payment on daily business operations, it states. Museum managers, moreover, have no formal plans in place to obtain those funds in time to meet the 2009 deadline, it says.
Doud's office turned up more bad financial news during its audit of museum records: "While conducting field work, we became aware of serious issues, such as misappropriation of assets, lack of oversight of internal controls and conflict of interest that we believe contributed to the existing condition of the Capital Campaign," the audit states.
