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S.C. Arts Commission Press Releases
South Carolina Arts Commission Response to Legislative Audit Council Review
June 26, 2013
COLUMBIA, S.C. – The South Carolina Arts Commission recently was reviewed by the Legislative Audit Council, which examined several key areas, including administrative costs, staffing levels and compliance with a new proviso requiring 70% of state funds to be spent on grants.
“We are gratified that the Audit Council’s report contains statements and data that support the agency’s strong history of service to the state,” said Executive Director Ken May. “The LAC’s main finding involved the proviso. For FY2011-12, the first year of operation under the proviso, the Arts Commission was on target to meet requirements and had awarded more than 70% of state funds in grants. However, at the end of the fiscal year, a small amount of funds, $21,285, was unspent and returned by grantees. This led to our just missing the 70% mark by 1.1%. For the upcoming year, we have allocated substantially more than 70% of state funds to grant awards to allow for potential under-expenditures.”
The LAC report makes these additional points:
- During the period FY 09-10 to FY 12-13, total administrative expenses for the agency have remained under 20%.
- In compliance with proviso 30.4, programs of the S.C. Arts Commission are grounded in proven research-based strategies.
- The agency has meaningful measures by which to evaluate its programs.
- The staffing level at the Arts Commission is consistent with other state arts agencies regionally and nationally.
- South Carolina receives competitive and formula funding from the National Endowment for the Arts due to the Arts Commission’s strong arts in education programming and work in community development and planning.
Where the LAC has identified deficiencies and recommendations for improvement, the Arts Commission will take immediate actions to make corrections and implement appropriate changes. Some of those corrective actions have already been implemented, including:
- Adjustments to budgeting practices to avoid inadvertent non-compliance with proviso 30.4
- Financial statements detailed by source of funds
- Reinstitution of random audits of grant recipients
For the remaining findings and recommendations, the Arts Commission will incorporate action steps into its strategic plan for achieving the desired outcomes. Specific responses for each recommendation are listed individually below.
The LAC’s full report is available online.
Arts Commission responses to LAC recommendations
1. The South Carolina Arts Commission should spend 70% of appropriated state funds on grants as required by proviso 30.4.
In FY 11-12, the first year of operation under this proviso, the Arts Commission made a good faith effort to comply with the new requirement, awarding more than $1.5 million in grants (from all sources of funds)—more than 70% of state appropriation. However, actual expenditures of state funds for grants fell short of 70% by $21,285 (1.1%), because some grantees did not spend their entire awards. This problem could only be recognized when grantees reported their expenses at the end of the fiscal year, too late for the agency to adjust awards and redistribute funds.
For the current year we have allocated substantially more than 70% of appropriated state funds to grant awards to compensate for potential under-expenditures.
2. The S.C. Arts Commission should publish detailed financial information by the source of funds to assure the public of compliance with funding requirements.
The agency already has revised its annual and quarterly financial reports to provide details of expenditures by source of funds. A summary of the agency's expenditures by source of funds is currently published in the agency’s annual accountability report required of all state agencies and available to the public at http://www.scstatehouse.gov/reports/aar2012/H91.pdf.
3. The S.C. Arts Commission should correlate its performance measures with its statutory mission and duties. These measures should include outcomes as well as quantifiable outputs.
The agency will add sections to its annual accountability report that correlate performances measures with its statutory mission and activities.
4. The S.C. Arts Commission should reinstate the practice of auditing a sample of grant recipients to ensure compliance with agency requirements.
This year the Arts Commission has re-instated its practice of randomized monitoring of reported grant expenditures.
5. The S.C. Arts Commission should request beneficiaries of significant county coordinator or arts discipline expertise give credit to the agency as required of grantees.
The agency will ask beneficiaries of significant county coordinator or arts discipline expertise to give credit to the agency.
6. The S.C. Arts Commission should enforce its requirements that grant recipients give credit for funding on electronic publications and amend its grant contract to include grantee websites, as well as social media sites.
The agency will re-emphasize to grantees the importance of meeting the requirement of giving funding credit in all communications, including websites and social media, and amend the grant contract to reflect this.
7. The S.C. Arts Commission should require grant recipients, where appropriate, to provide a direct return to the people of South Carolina.
We believe strongly that our grantees do provide a direct return to the people of South Carolina on their public investment. We award grants through evaluative processes that establish the capacity of organizations or individuals to generate public value for their communities and our state. The value that our investments produce is more and better quality programs and services, at a more affordable cost, though not necessarily free. Even though most of our grantees are nonprofit organizations, they still function as businesses and must generate sufficient revenues to pay for the services they provide and the operations that support those services. Considering the modest size of many of our grants, we do not think it is reasonable to require that all of our grantees provide free programs or give works of art to the state at no charge.
On another level, however, the state’s investment in the arts is repaid many times over. According to the 2011 economic impact study by Dr. Douglas Woodward, the $9.2 billion in annual economic output and 78,000 jobs supported by South Carolina’s creative industries produce $570 million in sales and income tax revenues for the state each year.
8. The S.C. Arts Commission should require that grant recipients document public outreach activities in their final reports to the agency.
The Arts Commission’s current reporting requirements do ask grantees to document public outreach activities. The agency will explore ways to assist grantees in quantifying the value of that outreach.
9. The S.C. Arts Commission should have agency staff offer artists who are seeking to fund projects through crowd funding sites access to agency electronic resources to reach a larger potential funding audience and require these artists to give the agency credit for successful funding projects in electronic and print media.
The agency will survey South Carolina artists to determine how many are using or considering crowd funding sites to raise funds and then determine the best way to offer promotional assistance to these artists. To be fair, the agency’s efforts to assist artists with promotion of funding projects must include those who are using traditional methods as well as new methods such as crowd funding sites.
The agency will also continue to share marketing and promotional best practices for artists through its websites, social media channels, conferences and workshops, and through its Artists' Ventures Initiative, a program dedicated to improving conditions for S.C. artists by helping them develop the knowledge and skills to build satisfying, sustainable careers.
About the S.C. Arts Commission:
The South Carolina Arts Commission is the state agency charged with creating a thriving arts environment that benefits all South Carolinians, regardless of their location or circumstances. Created by the South Carolina General Assembly in 1967, the Arts Commission works to increase public participation in the arts by providing services, grants and leadership initiatives in three areas: arts education, community arts development and artist development. Headquartered in Columbia, S.C., the Arts Commission is funded by the state of South Carolina, by the federal government through the National Endowment for the Arts and other sources.