Nonprofit’s spending on SF public art school under scrutiny

The San Francisco Board of Education found itself backed into a corner this week when it allowed a nonprofit to continue hiring artists to teach at Ruth Asawa School of the Arts, despite transparency concerns over the organization’s spending.

The arts education school is one of the most prestigious campuses in the San Francisco Unified School District, boasting an audition process for admission. It is also one of only a handful of public schools in San Francisco with a nonprofit wing.

The nonprofit Friends of School of the Arts, which oversees fundraising and staff pay, is in charge of funds brought in during events put on by the school and donations from parents, as well as the background checks, contracts and paychecks of most of the artists who teach at SOTA.

The nonprofit brought in $3.2 million in mixed revenue between 2010 and July 2015, including some $1.1 million in government funding from 2010 to July 2014, according to the most recent tax filings available.

While several school board members were concerned that the financial arrangement is unclear and the transactions lack oversight, the board voted 6-1 on Tuesday to approve another Memorandum of Understanding between the SFUSD and FoSOTA.

The agreement allows the nonprofit to continue paying staff through the Artists-in-Residence program and administer services at the school for an unspecified amount of time. Without the agreement, SOTA would come to a halt at the beginning of the school year since the nonprofit manages the artist contracts.

While the nonprofit has its own governing board with open meetings, the Board of Education does not review its revenues or expenditures. The agendas and meeting materials, like monthly fiscal reports, are also not public record because the board is not subject to the open-meeting rules of the Brown Act.

“It’s honestly just been a mystery for a lot of us,” Commissioner Hydra Mendoza-McDonnell said at the meeting. “It doesn’t feel quite settled to me that the organization is functioning.”

FoSOTA President Angie Doctor denied that the group lacked transparency in an email and said the nonprofit “observes very strict financial controls on how such funds are used.”

“In fact, the school principal approves every single expenditure in writing in advance,” she said. “Rumors to the contrary are simply that: unfounded rumors.”

Brent Stephens, the district’s chief academic officer, tried to assure the board on Tuesday that the nonprofit’s finances were in check and said that district staff began addressing issues of financial transparency with the nonprofit last year.

“There’ve been a number of us, myself included, who have been able to review fiscal reports from the group,” Stephens said. “And we feel confident right now that we’ve got a pretty accurate understanding — an accurate understanding — of both the revenue of the group and the full set of expenses that their group incurs.”

Still, Commissioner Rachel Norton did not share the district’s confidence in the financial arrangement.

“It’s a very insular organization that does not have any clear rules or procedures and they’re not inclusive, particularly, of the larger school community,” Norton said at the meeting.

“There’s no procedures written down,” she added. “There’s no way that people who may have a different point of view know how to participate in this board that is getting a lot of money, that is dealing with a lot of money, that is providing programming for kids at this school.”

From 2010 to 2014, the district reimbursed the nonprofit for some of the hiring costs for about 70 artists a year, according to Doctor. Tax filings show that amounted to more than $1 million.

But starting in the 2014-15 school year, the school district began hiring a small portion of the artists directly and stopped reimbursing the nonprofit as a contractor, Doctor said.

While the district has paid for about 20 artists since then, including $59,895 for two artists this upcoming year, FoSOTA has paid for all of the other artists. The average cost for hiring artists is around $500,000 a year.

Editor’s Note: An earlier version of this story erroneously stated that Ruth Asawa School of the Arts is the only public school in San Francisco with a nonprofit wing.

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