The Woodruff Arts Center reported today that it is a victim of fraud, saying that a former staff member stole $1,438,000 over the course of five years.
The theft came to light early in November, after the resignation of the unnamed employee, described as a middle manager in a department not related to finance, who had left of his own accord in October. A staff member noted irregularities in the individual’s invoices and brought them to the attention of Virginia Hepner, the arts center’s president and chief executive officer.
Hepner, who took over at the Woodruff four months ago after a long career in banking and corporate finance, launched an internal investigation, which uncovered the fraud. She said the perpetrator has admitted guilt and that the arts center has turned the case over to the U.S. attorney’s office. No other Woodruff employees are believed to have been involved.
Hepner said she has launched a thorough analysis of all the center’s processes and controls to ensure that best practices are in place.
“We took immediate steps to bring in an independent financial expert to ensure the integrity of our finances,” she said at a morning news conference. “We are focusing on every role and system that touches financial matters, and have already begun making process and personnel changes.”
Also speaking Tuesday morning, Woodruff board Chairman Larry Gellerstedt III gave assurances that the incident does not threaten the financial stability of the organization, which has $100 million in revenue. “I’m more concerned about it affecting our credibility with our supporters,” he said. “We take the stewardship of this important community asset seriously, and we are trying to be fully transparent.”
The Woodruff Arts Center has just opened a $9.2 million corporate fund-raising campaign, its largest ever.
COMMENTS
If the stealing of 1.4 million was not noticed, I can not imagine what else is not being noticed. Please don’t entertain justification or excuses. The damage is done. …and yes, your reputation is damaged to those of us that support your organization with our hard-earned money. That money could have generated 10 times that in revenue for the arts in Atlanta. Disgraceful.
I thought maybe all that cash went to the Museum Of Modern Art, Ny, for rental on one of their shows.
Just think, the $1.4+ millions embezzled is more than half of the yearly hit taken by the ASO musicians! If I were the WAC, I certainly would change auditors and see whether there can be a lawsuit against the present ones for either incompetence or lack of due diligence.
Finally, it would be good, if unexpected, if Mr. Joseph Bankoff, the WAC president under whom the stealing occurred could explain to potential donors how such a theft could have occurred and why WAC’s internal auditor, if any, was sound asleep on the job… and how that much money could disappear with his being completely ignorant of its flight. Did he look at cash flows?
The WAC highly paid presidency is not a sinecure, but one for which EXPERIENCED executives, preferably ex-CEOs- should be recruited….not ones who have had no major executive experience., much less have never run an organization the size of WAC.