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.these may not be significant errors, but they could raise questions as to the effectiveness of the organization's internal controls.
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.
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.
(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.