The Charlotte Observer

Editorial - January 27, 2006

North Carolina has a superb collection of fine art and a superb director of its Museum of Art in Larry Wheeler. But as a new report from state Auditor Les Merritt points out, it also has a complicated pay system for top employees that raises questions about who runs the museum.

Is it the N.C. Department of Cultural Resources, the cabinet-level agency with statutory responsibility for overseeing the museum? Or is it the private N.C. Museum of Art Foundation, the fund-raising arm for the institution and a key reason the museum is so highly regarded?

The museum would not be what it is today without the foundation's admirable support -- including its willingness to supplement the salaries of Mr. Wheeler and top staff members to keep them in North Carolina. The foundation, created in 1969 by the state, provides nearly two-thirds of the museum's annual budget (now $11 million) and has considerable involvement in the museum's operations. It boosted Mr. Wheeler's 2004-05 state salary of $97,621 by $111,192 and paid him consulting fees of $135,642.

The audit contends the museum violates state law in allowing the foundation to supplement salaries for staffers whose pay is set by state law.

Why is that a problem? Consider how it might affect other state agencies. Who thinks it would be a good idea for a state chamber of commerce foundation to supplement salaries of Department of Commerce officials, for example? Or an environmental foundation to supplement salaries at the Division of Environmental Management? If the legislature decides foundations should supplement some state employees' salaries, it needs to rewrite the law to say so -- and require full disclosure so there's no question about who's being paid by whom, and for what.

"The museum is a state museum that receives funding assistance from a private foundation, yet it operates in many ways as a private museum that receives state funding," the audit asserts. Foundation and museum operations are so integrated "that a hybrid organization now exists."

The Department of Cultural Resources quibbles with the auditor's conclusions and has taken steps to clarify the relationship between the museum and foundation. Good. The auditor's recommendation that the museum be operated as a state agency, under state control, sounds right.