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State, Not Hispanic Foundation, Made Errors

It is easy to be misled by the front-page article about a private auditor’s review of fresco expenditures by the National Hispanic Cultural Center Foundation, a private nonprofit corporation. The article screams out “wrongdoing” by the foundation in the demand that $147,000 must be repaid to the state. It implies foundation records were incomplete by citing “missing purchase records,” and hints at an intentional misuse of state funds by the foundation and a “lack of governmental oversight.”

The foundation contracted with the Department of Cultural Affairs to administer appropriations for the fresco project after presenting the secretary with a memorandum of understanding detailing intended use of the funds, including such items as grand opening events, educational materials and art books. All funds spent by the foundation were approved by the Departments of Cultural Affairs and Finance. All were for the benefit of the fresco project.

The review identified a lack of record keeping and oversight at the Department of Cultural Affairs and the absence of signed purchase agreements in Department of Cultural Affairs files. It was foundation staff who provided the auditor with a full set of documents, including the memorandum of understanding and the actual purchase agreements which resulted in the review being properly conducted.

Look at the independent auditor’s report. No funds from this appropriation were spent on administrative costs. No money is just plain missing. The $147,000 to be returned had already been spent for the benefit of the fresco project; the $138,000 returned earlier was unspent. Foundation staff acted in good faith and followed the contract as instructed by the state. The technicalities of state law were not well understood by the Secretary of Cultural Affairs and that went unmonitored by the Department of Finance.

One of the oddities of the purchase agreement signed by the foundation is a provision that permits the state to demand a return of the funds even if the foundation spent them in full compliance with the agreement and for the benefit of the fresco project. Of course the foundation will cooperate, but there is an obvious problem created by a demand that already-spent funds be returned.

Here’s the bottom line: The completion of the fresco by artist Frederico Vigil marked a historic event in the U.S. art world. The work depicts hallmark events in the history of the Spanish-speaking world, including the settlement of New Mexico. It calls to mind the great works of Mexican fresco artists such as Orozco and Ribera and of course the great Renaissance frescos in Italy and throughout Western Europe. The Legislature wisely and generously funded the fresco project.

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The center is a state-owned institution that conducts Hispanic arts and culture programs. In the last four years the foundation has been able to provide over $2 million in non-governmental support to center programs. This is the result of the diligent efforts of Clara Apodaca, foundation president and CEO, and her committed staff, and through the hard work of our board members.

We face many challenges going forward. This is the most difficult budget climate that the foundation and the center have encountered in recent years. The center’s state funding pays only for its staff. The return of money to the state will hamper the foundation’s ability to fund center programs in the very near term. As in the past, we will rely on private donations by those who appreciate the high quality of center programs. We are confident that the cultural dividend for New Mexicans and visitors from around the world will be worth the private investment.

As for the bluster in the state’s press release of “how public funds should never be spent” and “improperly spent funds by the Foundation,” one can only speculate about the motives of Department of Finance and Administration Secretary Richard May. The lead of the state’s press release is correct regarding “serious financial errors by the previous administration.” That’s the headline.

Peter Sanchez is chairman of the National Hispanic Cultural Center Foundation Board of Trustees. Janice Paster is vice chairman. This piece has been approved by the members of the Board of Trustees at the foundation.

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