A university is just a group of buildings gathered around a library. ~Shelby Foote

Monday, December 05, 2005

Sad Days for MPM

I have very fond memories of the Milwaukee Public Museum. School fieldtrips from my hometown of Kaukauna (about 100 miles North of Milwaukee) were an annual event from 5th to 8th grade and I looked forward to those trips. Not just because it meant a day off of school, but also because the museum was fun to go to-- dinosaurs, igloos (fake), life-size recreations of Milwaukee streets in the 19th century, and Native American (then, Indian) artifacts and "dioramas" galore. Wonderful museum. The look, the feel, heck, even the smell of the place are things I remember from my youth.

We've taken our kids their twice, and the impact on them has been similar-- there is simply so much cool stuff to see there. Which is why the current financial mess... no, mess is not a strong enough word... the current financial cesspit that MPM finds itself in is quite depressing to me. I've been to the MPM far more times than I've been to the Milwaukee Art Museum, despite the latters beautiful new Calatrava addition for the simple reason that while I find art to be interesting and diverting, I find history, science, and culture to be fascinating and completely engrossing.

If anyone ever wonders why independent oversight of public agencies is a vital and significant safeguard, let what is happening at MPM be Exhibit A. Accounting tricks, nepotism, and perhaps even fraud, occurred for years at the MPM, and nobody realized it until the entire financial stability of the Museum was ready to crumble. The situation is so bad, the Museum is considering selling some of its holdings and collections, a nearly unheard of prospect for a public museum of any sort.

Aye carumba. I hope that the Milwaukee D.A. prosecutes the chief figures in this sad debacle to the fullest extent possible... but then knowing E. Michael McCann, most likely there will be a slap on the wrist at most. Sigh. Hopefully the MPM will come out this fiasco as strong, or stronger, so that many future generations of kids can experience the same wonder and joy I did on those fieldtrips.
Thanks for the link to the Audit Report. It was quite interesting. For those not interested in reading the report here are just a couple of the "Tricks" used by the CFO to hide the financial condition of the museum:
-he would drastically overstate the amount of wages paid to set up an exhibit thereby writing off those wages over the life of the exhibit (35 years) rather than expensing them in the current year. This is a trick used by companies all the time - if you want your financials to look good, capitalize costs. If you want them to look bad, expense costs. If you want the financials to look good for the bank and bad for the IRS use 2 different accounting methods.
-these next ones are hardly accounting tricks-they are simply Lies. He would simply make up bogus #s to explain what funds were used for. For example he stated $500,000 was used to pay down debt, when in fact no such payment was made.
-He stated that the fund suffered a market loss of $300,000 when in fact it showed a gain of $200,000. I'm sure this was to cover for previous tricks.
-another lie was to state that $750,000 was still on hand, but was transferred to a separate cash account-no such account existed.

My questions to him would be:
What was your exit strategy? You can't hide it forever - eventually it will collapse like a pyramid scheme.
Why? Was it just to keep your job?

On a side note I think the image of accountants is changing from the dweeb with the pocket protector to the bad-ass don't "F" with me or I'll take your retirement account dude (with a pocket protector).
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