After audit, Rochester Art Center moves to shore up finances

ROCHESTER – The Rochester Art Center outsourced its bookkeeping to a local accountant after an audit released in January raised serious questions about its ability to survive, its interim director said last week.

That move was one of several changes, including the layoff of five staff members, the art center's leaders made in recent weeks in an effort to restore the center's financial health.

"It has been tough around here," interim director Lee Koch told members at the center's annual meeting. "These changes that we've made are not changes that we wanted to make."

The art center struggled last year with a number of firings and resignations as its financial condition worsened. Director Megan Johnston was fired in January, just as the overdue audit was released. Rising utility and insurance costs also hurt the facility, which last year saw more than $900,000 in revenue from earnings, contributions and support from the Rochester city government, according to unaudited numbers shared at the annual meeting.

Diane Lund, a local certified public accountant hired to examine the center's finances, told board members and others attending the meeting that the nonprofit art center didn't employ the kind of financial controls she would have expected for an institution of its size.

Incoming board chairwoman Tracy Austin said in an interview that board members didn't have the financial information they needed earlier this year to understand what was happening.

Austin praised the former staff member who handled the center's finances, but said she was glad the accounting was now handled by a local professional.

"I don't think anything that happened was purposeful … not once have we seen any indication of any stealing. It's not been anything like that," she said.

The art center, started by a local arts patrons 71 years ago, moved in 2004 to a new $8 million building overlooking the South Fork Zumbro River.

Its problems come as Rochester makes a citywide push for excellence under a 20-year Destination Medical Center plan crafted by the Mayo Clinic. Though the center is not central to the expansion, it is seen as a critical piece in the city's plans for cultural growth and riverfront development.

Urging the board to find more members, Mayo neurosurgeon and Art Center member Burton Onofrio told others at the annual meeting that the Mayo expansion "without an arts center is a laugh."

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