Museum Associates

“The museum's bylaws establish an executive committee as one of its standing committees elected annually by the board of trustees. The executive committee has the authority to act, between meetings of the board of trustees, on behalf of the board of trustees, subject to certain exceptions, including those set forth in applicable state law. The scope of the committee's authority, including the exceptions thereto, is set forth in the bylaws of the museum, which are published on the museum's website. The committee is comprised of the co-chairs of the board, the chairs of each standing committee of the board and other trustees elected by the board. All members of the committee are voting trustees.”

“During fiscal year end 06/30/16, the organization amended its bylaws. Amendments consist of the following significant changes: -adding "service on committees" as an evaluation criteria to be used by the committee on trustees for re-nomination of trustees to the board (article iv, sections 2 and 14(j)), -clarifying and providing flexibility in the process for scheduling and giving notice of the annual and regular meetings of the board (article iv, sections 8 and 9) -renaming the "development/campaign steering/major gifts committee" the "development committee," (article iv, section 14) -clarification of the process for, and authority to, designate new standing and ad hoc committees, elect committee members and select committee chairs, and in particular the role of the committee on trustees in presenting the slate for committees to the board (article iv, section 14) -clarifying, in line with current practice, who can serve on standing and ad hoc committees, and on any subcommittees: voting trustees; non-trustees who can be full, voting members of certain committees and subcommittees; and non-trustees who can participate on committees in a non-voting capacity because they bring special expertise to the work of such committees. The amendments to the bylaws clarify that all such members and non-voting participants must be nominated by the committee on trustees and approved by the board (article iv, section 14) -reducing the quorum for the executive committee and providing that chair(s) of standing committees serve on the executive committee (article iv, section 14) -changing the section on officers (article v) to reflect our current structure (e.g., co-chairs of the board; which offices are mandatory and which are not, including the office of president/coo, etc.). -adding language clarifying the current (best) practice: that the chief financial officer, while reporting directly or indirectly to the director/ceo, will have direct access to report to the chair(s) of the audit and finance committees (article v, section 10).”

“The form 990 is reviewed by outside tax accountants and reviewed and approved by the audit committee of the board of trustees. Once approved by the audit committee, the audit committee reports to the full board of trustees and the return is made available to the rest of the board before it is electronically filed.”

“The chairman of the audit committee sends an annual conflict of interest disclosure form to each trustee, and, with the office of general counsel, monitors responses and follows up with trustees to achieve as high a response rate as possible. The office of general counsel reviews these forms and reports significant conflicts to the audit committee, which reviews any specific transactions that might involve a conflict of interest with a trustee. The director of the museum sends officers, key employees, and others conflict of interest forms, which they are asked to complete and return to the general counsel, who reviews such forms for possible conflicts and monitors compliance with lacma's ethics policy including the conflict of interest policies contained in the ethics policy.”

“The compensation of the ceo and director of lacma is determined by the executive committee of the board of trustees, with the parameters established by the employment agreement entered into by lacma and the ceo and director in 2010. The director annually determines the compensation of each of the other officers and key employees. In each case, the compensation is based on (1) the employee's performance during the prior year; (2) the context of lacma's overall operating budget; and (3) comparability data for persons holding similar positions in similar organizations. Such comparability data is generally prepared by senior management, including the chief financial officer and the director of human resources and includes a review of publicly filed forms 990 of other institutions. Once compensation of the ceo is approved by the executive committee, based on the information and comparability data described above, the executive committee's recommendation, as well as the proposed compensation for all other officers and key employees, the underlying data, including the performance reviews and comparability analyses, are presented to the audit committee, to determine whether, in the audit committee's judgment, such proposed compensation is appropriate, fair and reasonable to lacma. The final recommendation of the executive committee and audit committee is reported to the full board of trustees at its next regularly scheduled meeting and submitted to the full board for approval. All members of the audit committee are independent trustees of lacma. Note that lacma does not have a separate "compensation committee;" the audit committee functions as the compensation committee.”

“All governing documents, conflict of interest policy, informational returns and financial statements are available to the public upon request and on the museum's website.”

“Although the county of los angeles is not a "related organization", compensation paid by the county of los angeles to certain officers and employees of the museum listed in part vii and schedule j, and is included in the interest of transparency and full disclosure.”

“Proceeds from sale of securities: lacma has investment accounts and hedge funds with many stock transactions. Due to the large quantity of stock transactions, this information is not included in the return.”

“To serve the public through the collection, conservation, exhibition and interpretation of significant works of art from a broad range of cultures and historical periods, and through translation of these collections into meaningful educational, aesthetic, intellectual and cultural experiences for the widest array of audiences. The los angeles county museum of art (the "museum") is the premier encyclopedic art museum in the western united states. The museum's collection of more than 130,000 artworks from around the world spans the history of art, from ancient to contemporary times, including especially strong collections of asian, latin american, european, and american art. Through its varied collections, the museum is both a resource to and a reflection of the many cultural communities and heritages in southern california and throughout the world. This fiscal year, the museum presented 31 exhibitions and permanent collection installations, acquired 3,105 new works of art, provided programs for 84,592 school children. Total attendance at the museum was 1,407,405.”

“The decrease in contributions from fiscal year end 06/30/15 to fiscal year end 06/30/16 is attributable to the fact that lacma completed its momentum campaign in fiscal year end 06/30/15. A large multiple-year corporate gift was also recognized in fiscal year end 06/30/15.”

“While revenue less expenses for line 19 reads as a deficit of $25,800,428, the museum's cash flows were actually considerably better than this, since this number reflects $12,964,789 of bond interest and fees, which were more than covered by cash payments on outstanding gift pledges recognized as revenue in other years, and $8,675,718 of depreciation expense and bond amortization costs which are non-cash accounting charges. It also reflects $7,740,969 of architectural and other consultant expenses for the planning stage of a new museum facility, for which funds had been provided to the museum but not recognized as revenue in this fiscal year. Adjusting for these items, line 19 would show a surplus of $3,311,048.”

“Security: program service expenses 6,240,082. Management and general expenses 5,045. Fundraising expenses 2,578. Total expenses 6,247,705. Contractor: program service expenses 1,980,845. Management and general expenses 883,131. Fundraising expenses 360. Total expenses 2,864,336. Consultant: program service expenses 251,334. Management and general expenses 203,037. Fundraising expenses 103,383. Total expenses 557,754. Conservation: program service expenses 227,309. Management and general expenses 0. Fundraising expenses 0. Total expenses 227,309. Performers: program service expenses 201,460. Management and general expenses 0. Fundraising expenses 0. Total expenses 201,460. All other fees for service: program service expenses 1,059,298. Management and general expenses 172,310. Fundraising expenses 192,603. Total expenses 1,424,211.”

“Misc. Service fees exceed $200,000.”

“On this year's form 990, an amount for "revenue bond trust accounts" from the museum's audited financials is included on line 2. This item had been reported on line 15 in prior years. In the prior year, the publicly trades securities line included other securities.”

“The increase in other liabilities is principally tied to an unrealized drop in the value of an interest rate swap. This swap will self liquidate over the duration of museum debt and therefore does not represent an immediate non-discretionary claim on museum resources.”

“Unrealized gains (losses) on interest rate swap -31,627,600.”

“The organization has an audit committee that assumes responsibility for the oversight of the audit. The museum periodically changes audit firms or rotates partners within our contracted firm.”