December 17, 1998 | Read Time: 3 minutes
The Andy Warhol Foundation for the Visual Arts has agreed to adopt new fiscal controls, thereby ending a long-running investigation by the New York Attorney General’s office into alleged wrongdoing.
An agreement announced last week provides that the New York foundation take steps to tighten its financial management and reporting procedures. Specifically, the foundation has consented to:
* Create a three-person audit committee of the board of directors. Two committee members must be new members of the board; the fund says it will appoint those members next spring.
* Hire a chief financial officer, who will report to both the audit committee and the foundation president. The fund hired K. C. Maurer for the job in November.
* Prepare quarterly reports on travel expenses, subject to independent audits, which will be forwarded to the Attorney General’s office for the next five years.
* Conduct internal audits of the foundation’s books for the past three fiscal years.
“Tight financial controls of the foundation’s considerable assets will insure that sufficient checks and balances are in place to provide fiscal accountability,” said Attorney General Dennis C. Vacco, whose office has been investigating allegations of waste and mismanagement for more than a year.
“We welcome the agreement,” said Archibald L. Gillies, the foundation’s president. “It contains positive measures which will be useful.”
Andy Warhol, a leader in the American pop-art movement, died in 1987, leaving thousands of paintings, drawings, prints, and photographs to his foundation, which he established to promote the visual arts. But his estate was enmeshed in controversy from the start, and large legal fees have eroded the foundation’s assets — which are variously estimated to be worth from $100-million to more than $400-million.
Critics have complained that administrative expenses have exceeded the fund’s grant amounts, and say foundation employees enjoy lavish salaries and expenses.
Mr. Gillies said the fund was unlike any other in that its assets are largely in the form of the art of a single artist. The foundation valued the artworks at $81-million at the end of its fiscal year in April; its cash assets now total about $40-million, Mr. Gillies said. Its grants last year totaled $9.5-million.
“We function not only as a foundation but as a museum, a library, and an art gallery,” he said. Of the 20 staff members, he said, 16 are directly involved in the care, exhibition, or sale of the art. “Because of that, our expenses are higher than those of any other foundation I’m aware of, relative to the amount of money we give away.”
The foundation’s salaries fall below the average for grant makers in the New York City metropolitan area, Mr. Gillies said. His own salary is $215,000 a year.
“Foundations should operate as if they were in Macy’s window,” Mr. Gillies declared. “How much money I make, how much the staff makes, where we spend our money — it all should be available for the public to know, because we’re spending tax-exempt dollars. Reporting information to the Attorney General’s office is no problem for me, or for our board.”
