P.E.I. Council of the Arts finances in crisis
CBC News | Posted: October 30, 2015 2:30 PM | Last Updated: October 30, 2015
First external accounting review in years reveals problems
The P.E.I. Council of the Arts has been caught up in what it's calling a fight for its life over the last few months, CBC News has learned.
With hindsight we realized we should have had closer scrutiny. - Jody Racicot
Acting board chair Jody Racicot told CBC News that as recently as the spring the board believed the council's finances were in good shape.
But a government official flagged that proper procedures for receiving provincial funding hadn't been followed for years. Since 2010 the council hadn't had an independent accountant review its books.
The external review revealed serious financial concerns.
"With hindsight we realized we should have had closer scrutiny on the situation," said Racicot, who's only been acting chair for 10 months.
"But, yeah, hindsight is 20-20."
Executive director laid off
Racicot said the situation got worse when instalments of this year's provincial funding of $315,000 were stopped while government waited for the external review.
We had to find some savings somewhere. - Jody Racicot
Last week the organization held its first AGM in four years, and Racicot told members the entire focus of the organization had become getting their heads above water.
Racicot said the council was staving off bill collectors and wondering how it was going to meet its obligation to give grants to artists. The situation improved somewhat when this year's provincial funding resumed, said Racicot, but that still wasn't enough.
"We reached a place where we realized we were overstretched financially and we had to find some savings somewhere," he said.
"What was decided was that the best way to move forward was to go with a single administrator instead of the two administrators that we had, and so our executive director unfortunately was laid off because of financial constraints."
The executive director's salary was between $60,000 and $70,000.
Grants to artists cut
That cut allowed the council to award just under $36,000 in grants to 13 artists last month, but that's half the amount promised to artists in the council's financial statements presented at the AGM.
We got a lot of good will. - Jody Racicot
Racicot said there will not be a second round of grants to artists this year, but members at the AGM were understanding.
"We got a lot of good will that we actually did complete a grant round, although we were in … a fight for our lives at the time," he said.
The council will also be working to re-establish its charitable tax status, which was revoked last month by the Canada Revenue Agency for not meeting filing requirements under the Income Tax Act. Racicot said he expects the group's charitable status to be restored soon.
Racicot said the group is up to $20,000 in the red, but he remains hopeful.
"There are a lot of questions to answer from the past but I think it looks pretty good for us going forward," he said.
Racicot believes the council will be close to breaking even by year end, March 31.