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We have conducted a series of audits of the Smithsonian’s management of the National Museum of African American History and Culture (NMAAHC) building project.
Our audit objectives were to determine whether (1) management’s funding plans align with the timing of projected expenses, and (2) management has a contingency plan should the Smithsonian not receive expected federal appropriations or private donations.
In 2003, Congress established NMAAHC, dedicated to the collection, preservation, research, and exhibition of African American historical and cultural material. The $500 million funding for this construction project will be split evenly between federal appropriations and private donations. The Smithsonian announced that the museum will open to the public in November 2015.
We found that management’s funding plans for the NMAAHC building project did not align with the timing of the project’s funding requirements. However, due to the difficulty in predicting the timing and amounts of both federal appropriations and private donations, management did not expect available funds to align with funding requirements. Therefore, management has planned to borrow funds to meet these requirements until fundraising for this project is completed. As of June 2013, the Smithsonian has received approximately $113 million in private donations and $191 million in federal appropriations for the building project.
We also found that NMAAHC did not use the Smithsonian’s central donor database system for reporting private donations. This resulted in the museum providing Smithsonian management with overstated fundraising amounts that were used to make future funding decisions.
The museum did not use the central system when producing fundraising reports because they found the system to be difficult to use and not robust enough for their needs. Instead, the museum used its own secondary system to manually produce fundraising reports for management. As a result of this process, the Smithsonian was relying on fundraising amounts that were overstated by $922,000 when making management decisions.
To ensure that the NMAAHC project team has accurate information to manage the project’s funding plans and requirements, we made recommendations for NMAAHC management to use fundraising data from the central donor database system when reporting on the status of the NMAAHC building project.
Management concurred with our findings and recommendations and has planned corrective actions to address the recommendations. We will continue to monitor management’s progress towards completion of these recommendations.