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More trouble in Atlanta – Arts Center is milked in $1.4 million scam

Atlanta’s Woodruff Arts Center took players in the symphony orchestra to the cleaners a couple of months back, telling them it couldn’t afford the wages.

One reason for the poverty, it now emerges, it that an employee of the AC was skimming it of $1.438 million in fraudulent invoices over the past five years. It sounds like management weaknesses at several levels. Heads should roll, but will they?

Story here.

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  1. Judging by the final statement by management “We think we have very good people and processes in place now,” they are not looking to take responsibility. If these “very good people” are the same people that allowed this to happen, er… what are they saying ? And their fix is to appoint Auditors ? So hang on, they were collecting and managing upwards of 100 million, without any auditors ? That’s bad for a start. But auditors are an external assurance of their internal controls – and it seems they had very inadequate internal controls. As we have seen in so many cases of business fraud – auditors cannot detect it, ( the latest accusation is HP and Autonomy, where it is suggested the auditors overlooked massive deliberate cooking of the books ), they can just say whether the fraudulent transactions are accounted and whether the accounts add up.
    But maybe it is more of an existentialist statement designed to comfort donors whose money has been mismanaged and stolen, rather than paid to the musicians: “trust us….we think….. therefore we are….. very good people with very good processes”.

  2. Galen Johnson says:

    Time to bring back the guillotine. I mean this in the nicest way possible.

  3. Stephen Carpenter says:

    Seems to me that if you’re paying administrators a salary, and you’ve given them a “task” or “responsibility”, they ought to be able to discharge that responsibility. It’s an issue of oversight on the part of the top eschelon which would include the Chairman of the Board, the General manager and the Business Manager. Besides, one would hope that there is in place an Auditing committee reporting to the Board. It doesn’t matter how big or small an organization is, internal checks and balances are an absolute.
    Anyone in an upper position should want to have this just to make sure there are the right fingerprints on the right papers. Fraudulant invoices can only happen when 2 jobs aren’t being done.
    It would be fun to see how many Board members and upper management made conflict of interest declarations, and just how many can read a balance sheet or took the time to do so.
    I would be more interested in feet moving and doors swinging than heads rolling, but what is really needed is as much of the money back as possible and orchestral sounds in the AC.
    How abysmally awful.

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