FGO ANNOUNCES MAJOR CORRECTIVE ACTIONS WITH CALIFORNIA ATTORNEY GENERAL FOR ISSUES DATING FROM 2010-2014
FGO has self-reported issues with governance, conflict of interest and accounting irregularities from the period dating 2010-2014
Fresno, California – June 16, 2016
The Fresno Grand Opera Board of Directors announces the Company has self-reported to the California Attorney General significant financial and accounting irregularities and governance and conflict of interest deficiencies from the period 2010-2014. The Company is working closely with the Attorney General’s office to correct the issues, and has implemented proper governance and financial reporting practices to ensure future compliance with best legal and financial practices.
As part of the corrective actions being taken, the Company will amend and re-file its Form 990 tax filings for the period covering 2010-2014 to correct the following issues:
1. Nondisclosure of a business relationship between a for-profit company owned by key employees and the non-profit opera company
2. Nondisclosure of co-mingling of funds between a for-profit company owned by key employees and the non-profit opera company
3. Nondisclosure of a conflict of interest for key employees between a for-profit company and the non-profit opera company
4. Improper accounting practices that misrepresented the financial position of the non-profit opera company
A review of internal financial documents and company records found that FGO has been in a consistent debt position of between $200,000 and $350,000 since 2009. This debt position was materially misrepresented in financial statements and tax filings, and former key employees took steps in early 2014 to close the Company and start a new non-profit organization.
No evidence has been found to suggest the former Board of Directors was aware of the irregularities.
Richard Jennings, President of the Board of Directors, said: “As a community organization that relies on the generosity of patrons and donors, the FGO Board of Directors feels obligated to publicly disclose the issues we’ve discovered and the corrective actions we’re taking with the Attorney General’s office. We are working actively with them to address their concerns, and look forward to moving on to the important work of securing our company’s place in the community.”
Matthew Buckman, General Director of Fresno Grand Opera, said: “It was very disturbing to discover these issues upon my arrival to the Company. While we have significant challenges to overcome, our only goal is to help restore the community’s trust, rebuild the Company and continue providing quality operatic experiences for our community.”
An internal review, completed following a change in executive leadership in December 2014 and board leadership in June 2015, uncovered potential issues that required further examination. A full review was completed with assistance from a Certified Public Accountant and a prominent tax attorney, and the results of that review were turned over to the California Attorney General on the advice of legal counsel.