 |
YELLOW SHEET Office of the State Auditor of Missouri |
June 2, 2003
Report No. 2003-47
The following areas of concern were noted in our audit of the Missouri State Council on the Arts.
The Missouri State Council on the Arts (MAC) has experienced significant reductions in their funding over the last two years and expects to have more reductions in the future.� In fiscal year 2002, MAC spent $1,378,878 (21 percent) less than fiscal year 2001.� To continue funding its programs to the extent possible, MAC should ensure all monies are used prudently and wisely.
The Missouri Cultural Trust Fund (Trust Fund) is funded by nonresident professional athletes and entertainers state income taxes transferred from the state's General Revenue Fund, as authorized by state law.� The amount transferred into the Trust Fund decreased in fiscal year 2002, and in fiscal year 2003, the state budget does not include any transfers into this fund.�� In addition, interest earned has decreased.� The proposed fiscal year 2004 budget includes no additional transfers to this fund and includes increased appropriations from this fund.� As a result, it is imperative for MAC to strictly monitor the use of this money.
One program funded by the Trust Fund is the Capital Incentive Program in which monies are set aside to match equivalent private endowment funds raised by the arts organizations.� Grant payments of five percent of the set aside amount are then made to the organization each year.� The grant payout rate of five percent is not a reflection of the earnings on the Trust Fund.� The contracts with the arts organizations state that the interest or total return earned on the set aside amount will be awarded to the organization. As of December 31, 2002, MAC has earned interest, in total, adequate to cover these payments; however, in 1999 the Council changed the investment strategy of the Trust Fund and began transferring a portion of the balance into the Missouri Investment Trust (MIT).� Since that time, approximately $20 million has been transferred to the MIT and the return on these amounts since inception through December 31, 2002, has been a negative 13.62 percent.� In addition, the State Treasurer's average investment yield was 3.6 percent in fiscal year 2002.
The audit report also includes some other matters related to contract terms, meal allowances, lodging expenses, vehicle usage and mileage claims, upon which the Council should consider and take appropriate corrective action.