Friday, July 17, 2009

dillner in shreveport: common errors,
bad judgement, or both?

during eric dillner's tenure as managing/artistic director of shreveport opera a significant portion of restricted endowment was transferred to the general operating account, a year-end audit shows.

the company's FY 2007 audit includes a letter of management suggesting four areas of noncompliance:
1. The Shreveport Opera Guild (an integral part of the Shreveport Opera), with the exception of the Boutique de Noel checking account, did not maintain a complete and accurate set of accounting records.

2. The Shreveport Opera did not file its audited financial statements within the time frame required by State Law.

3. The Shreveport Opera did not record minutes for meetings of the Board of Directors for the year ended June 30, 2007.

4. The Opera transferred $30,000 from an account restricted for endowment to the general operation account for operating purposes. There was no documentation to support the calculation of the amount of the distribution or that the distribution was made in accordance with the terms of the investment policy. No minutes were provided to indicate this transfer has been approved by the board of directors.
these may not be significant errors, but they could raise questions as to the effectiveness of the organization's internal controls.

let's focus on #4: the opera transferred $30,000 from an account restricted for endowment to the general operation account for operating purposes. shreveport opera management's response at the time: "we concur with the finding." no further explanation was given.

shifting funds like this may not be an uncommon, depending on the endowment's investment policy. and $30,000 could be a rather small amount compared to the organization as a whole. however, the audit shows the total of shreveport's restricted endowments as $216,941, suggesting its original total was $246, 941. this means over 12% of the restricted endowment was shifted into the general coffer.

also notice the statement "no minutes were provided to indicate this transfer has been approved by the board of directors." why not? see #3: no minutes were taken for shreveport board of director meetings.

thus, what could be a fairly major and possibly controversial financial decision, made without a board's approval or even knowledge, could also have been something completely routine that appears suspect because of sloppiness and poor record keeping.

sound familiar?

(also, the following year's audit – FY 2008 – would normally include "corrective action taken on prior year findings." while the online version of shreveport's FY 2008 audit lists a "corrective action" page in it's table of contents, the page itself is missing.


  1. Wow, either case should make one question is Eric up to task of running the Skylight, even without all his new added jobs. I still wonder has the board questioned (or going to) present employees and the ones that were let go. This should give them a better understanding of the chain of events that lead up to the firings ( the time table of events, if meetings were held to find further savings,what was said to whom by whom, etc...)
    When they have the whole picture, then and only then can the board take the steps to restore the Skylight and start to gain back the trust of all in involved.

  2. It's hard to believe the board, or certain members of the board (Hefty, Miller) could care so little about the Skylight that they would be willing to entrust it to this man who clearly was not the dynamic fund-raiser he was touted to be in Shreveport. And if Herman the Horse is any indication, there is absolutely no chance that Eric Dillner has ANY artistic vision. Now, on the outside, all I can do is sit-by and watch it implode. Very sad. Very sloppy.

  3. Jamie, I think Hefty and Miller care but that that their egos will not let say they were wrong and had the wool pulled over their eyes and take the correct step to try and fix this.

  4. As a former administrator of a non-profit school (in my much younger days) I'm appalled that someone would attempt to mismanage restricted funds the way Dillner evidently did.

    At the very least one needs to be intelligent enough to initiate interaction with the board if the organization's financial situation becomes so dire as to require restricted funds use for general operating expenses.

    Not doing so can yield dire consequences for the organization (penalties, etc.).

    Evidently he didn't know how to cover his tracks, either.

    All I can say is "YIKES!"

  5. And to think I was fired for less than these things he did (or rather didn't do) in Shreveport. Wow. I am just in utter dismay right now. I'd say with all that has come out in the last several hours, it's time to really hit them where it hurts. And please don't take me saying 'hit' as a threat. Jeesh.

  6. Didn't SOT say they were $200,000 short for next season? Coincidentally, that's about 12% of Skylight's endowment, the amount Eric transferred from Shreveport's endowment to cover costs. I guess SOT's financial controls were too tight for him to pull that move again.

    At least I hope so.

  7. "the quiet before the storm?" ...boy, did you call that one.

  8. Check your recent Milwaukee history. This is exactly what happened at the Milwaukee Public Museum. And the Director was out in the blink of an eye.


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