In her review of the Museums and art galleries that are supported by the province Auditor General Bonnie Lysyk took aim at the Art Gallery of Ontario, focusing in particular, on the way the gallery issues tax receipts for donations. The AG noted that the Art Gallery of Ontario is responsible for more than one in five tax receipts issued by Revenue Canada by the Canadian Cultural Property Export Review Board –a total of $101 Million. The auditor noted, “Donations certified by CCPERB provide donors with additional tax advantages compared to those that are not certified by CCPERB. Despite the cost to taxpayers of the AGO’s acquisitions, we found that the AGO has not displayed the majority of these donations that it has received in the last five years that were certified by CCPERB. In addition, the AGO has not experienced a significant increase in its attendance as a result of these donations.
Added to the auditor’s concerns, was the fact that some of those tax-deductible donations were made by members of the gallery’s board of directors. The AG noted that there was nothing in the Board Minutes to indicate that (the board members) “declared their conflict of interest or excused themselves during the vote to approve their own donations. For example, we found that one Board member, who donated a collection of artworks to the AGO was also the Chair of the Curatorial Working Committee responsible for approving the AGO’s acquisitions in this collecting area. There was no indication in the committee minutes that the Chair of the committee declared their conflict of interest or excused themselves during the vote.”
Lysyk said the AGO even went to bat with Revenue Canada for board members who donated artworks in order to increase the size of the tax receipt. “For example, in one instance, the AGO appealed a ruling by CCPERB on the value of the donated artwork even though the gallery acknowledged in writing that, based on CCPERB’s rules, it had no basis to do so
The AG also noted that some of the AGO board members had served extremely long terms and that the organization did not have a process for turning over board members. “We found that approximately50% of the AGO’s board members had served for more than 10 years, including nearly 10% who had served more than 30 years and as long as 42 years. Best practices on board governance state that boards that have a majority of long-standing members may intimidate newer members, causing them to hold back new thoughts and ideas. Rotating board members helps ensure that a board maintains its independence from management and helps prevent it from becoming static, which may lead to unhealthy attitudes. This can cause boards to govern out of self-interest rather than in the best interest of the community they serve.”