This story is a partnership between the Nashville Banner and the Nashville Scene. The Banner is a nonprofit, nonpartisan news organization focused on civic news. For more information, visit NashvilleBanner.com.
As artists and art organizations continue to plead for an increase to funding for the arts in Nashville, alleged overspending and financial malpractice at Metro Arts could put at risk the meager financial support the arts do get.
Metro Finance Director Kevin Crumbo revealed Monday that $2 million earmarked for Nashville arts organizations are in jeopardy due to the mismanagement of the department budget.
“The simple truth is the commission will not be in a position to make additional grant awards if its financial position is already headed to a deficit,” Crumbo said at a meeting of the newly formed Arts Commission Oversight Committee. “Surplus monies may be needed as part of a corrective action plan to avoid a deficit, and if so, less money will be available for grants.”
Crumbo said he did not yet have a number for the potential deficit, but that the category that seemed most over budget was that of monies paid to consultants and contractors.
“One of the root causes of the internal audit review, the law department investigation and the additional oversight of our finance department are the reports of multiple [Metro Arts] employees who have alleged excess spending over budget, possible violations of procurement and other established financial processes and behaviors at the highest level of management that may violate Metro’s policies governing workplace conduct,” said Crumbo.
He explained that it is still unclear whether consultants and contractors were paid in a way that adheres to Metro’s rules and that he will have more information in the coming weeks. Ongoing audits and investigations by the Metro departments of law, finance and human relations continue.
Crumbo said not only is the second half of operational grant funding at risk, but also the future of Metro Arts funding could be in trouble should the issues not get resolved.
“At this moment I can't see rolling into the next fiscal year with these conditions still existing and trying to tell the taxpayers that we should fund more money for the arts when we can't account for what we’ve actually done in this fiscal year,” Crumbo said.
Surplus Funds Freed Up, Held Up
In January, the first half of $3.8 million in operational grant funding for Nashville arts organizations ranging from micro to large went out. The second half of that funding was on hold until it could be determined whether Metro had a surplus coming out of fiscal year 2023. That $2 million has since been freed, but not yet distributed.
“We were very intentional about wanting surplus funding to go to Metro Arts specifically,” said District 32 Councilmember Joy Styles, who chaired a specially called meeting of the Metro Council’s Public Facilities, Arts and Culture Committee on Monday, after the earlier oversight meeting. “For the funds to be held up … for artists that are waiting to receive them, is unacceptable. … The idea that we punish our creative class for what is going on with us internally after 20 years of not funding this department is just so inappropriate.”
Styles asked Metro Arts director Daniel Singh, who missed the earlier oversight meeting due to illness, to speak to the budget deficit. Singh said he believed staff salary savings would be able to cover what was spent on consulting. But Metro Arts Finance and Operations director Christiana Afotey chimed in to say salary savings are not allowed to be utilized for those expenses.
Metro Arts’ grant distribution formula has been the subject of ongoing controversy over the past year. The core of the problem has been the balance between funding large organizations versus small independent artists with the limited resources available, and one facet of that frustration has come from Singh spending thousands of dollars on outside consultants in order to put together those formulas.
This withholding of funds due to a deficit has increased tensions in a Nashville arts community that is well past its boiling point.
Controversy Over Change in Formula
Issues first arose in July when the Metro Arts Commission voted to adopt a new funding formula that would fund Metro's Thrive program at historic levels. Thrive grants go toward independent artists and small community-led organizations, so the idea was that this structure would bring more equity to a grant process that typically pushed the lion's share of funding toward larger organizations such as the Frist Art Museum and the Tennessee Performing Arts Center.
“My understanding of what happened is that at the July meeting, there were some decisions made where race was taken as an express factor, which we believed is unconstitutional,” Metro legal director Wally Dietz said at the Monday night Metro Council arts committee meeting. He added that he believes there is a legal precedent to back their opinion going back to 1989.
Dietz said Metro Legal recommended ways that Metro Arts could accomplish its goals in a “race neutral” way by considering factors including size of the recipient, ZIP codes and geographic areas that the commission had typically underserved. But the commission voted on a new formula in August that largely returned to the status quo, cutting Thrive funding in half.
“We disagree with the determination that this was race-based,” said Metro Human Relations Commission director Davie Tucker.
The Metro Humans Relations Commission received multiple complaints about the past year’s events: six from artists who were supposed to receive Thrive funding, as well as a complaint about the delay in operational grant funding.
The commission has since been working on a report, to be released March 4, examining allegations of discrimination in Metro Arts. Tucker previewed the study on Monday, reporting that, since 1987, the commission has awarded approximately $61,572,329 to arts organizations in Nashville, and 71 percent of it has gone to organizations with an annual budget of $1 million or more. Tucker argues that the July formula should have been upheld.
As this debate continues on the direction of funding, arts organizations remain frustrated with the lack of answers surrounding when, if ever, they will receive the funding they rely on for their budgets.
“It's hard for me to stand idly by when a group of employees and consultants I can count on less than one hand are making more money from taxpayer dollars than my annual organizational budget," Nashville Shakespeare Festival executive managing director Isabel Tipton-Krispin said Monday evening. “Even though it's their job to explain this to the people they are serving, I still don't know basic information like how much money the Nashville Shakespeare Festival can expect this year or next.”
Tipton-Krispin explained that without this information, she cannot determine how many local artists her organization can hire or how many programs it can put on. And for independent artists, the situation is even more dire.
“I just want to know why there is so much turmoil over giving small amounts of money to poor artists who want to do work,” said Elisheba Mrozik, an artist based in North Nashville. “I don't understand any of this process, and why money is being held up in these billion-dollar cities but y’all throw money at these billion-dollar corporations to build things we don’t even need, [that] we can’t even afford to go to. It just makes no sense to me.”
Disclosure: Kevin Crumbo has donated to the Nashville Banner. Financial supporters play no role in the Banner’s journalism.
