Audit critical of MOSI accounting, financial management

MOSI CEO Wit Ostrenko, set to retire next year, is called a “big thinker” but a poor financial steward.

MOSI CEO Wit Ostrenko, set to retire next year, is called a “big thinker” but a poor financial steward.

TAMPA — The Museum of Science and Industry is in financial decline, according to a consultant's report, and needs to overhaul an accounting system that is based more on "wishful thinking" than reality.

Longtime CEO Wit Ostrenko has done a great job, though, says the report, which will be presented today to Hillsborough County commissioners.

That is the dichotomy apparent in the report, which Hillsborough officials ordered in February to analyze operations at the financially struggling museum, which operates rent-free on county property on E Fowler Avenue. County officials grew concerned when MOSI management asked the county for a $250,000 loan in 2013 when the museum still owed $250,000 from a 2012 loan.

Museum Management Consultants, which was paid $40,000 for the report, examined five years of financial documents, toured the museum and conducted 34 confidential interviews with MOSI staff, its board members and county staff. The consultants also compared MOSI's finances and operations to a group of similar museums.

The 41-page report opens with one paragraph lauding Ostrenko as a "big thinker who made things happen." Much of the rest details problems like negative cash flow, misleading financial statements and underwhelming fundraising efforts. The temporary closure of MOSI's cafe in March after state inspectors witnessed roach and rodent activity was not an anomaly, one person told consultants, but a sign of "general neglect systemic throughout MOSI."

Several board members complained about MOSI's accounting reports, which they said obscure financial performances of big, expensive exhibits like "Sea Monsters Revealed."

"Financials are presented in the best possible light instead of creating an accurate picture," consultants wrote.

MOSI, which operates on a roughly $10.5 million annual budget, lost about $360,000 in 2013, according to the report. While several people told consultants MOSI was "addicted to blockbusters" like the $1 million "Sea Monsters" exhibit, financial statements didn't show those exhibits lost money.

"Sea Monsters" earned the museum $96,000, but consultants did report that number with skepticism, noting MOSI didn't account for salaries of full-time employees who worked on the exhibits.

MOSI's employee expenses (Ostrenko makes $200,000, according to 2012 IRS filings) are in line with industry standards, the consultants found, but its fundraising is not. MOSI covers about 5 percent of its costs through donations, compared to a 29 percent average at similar museums.

The report makes 33 recommendations, including that MOSI reform its accounting practices and expand fundraising efforts. Ostrenko, who announced in April he will retire in December 2015, declined an interview request Tuesday. MOSI spokeswoman Shannon Herbon issued a statement.

"We are at a crossroads and are grateful to the county and Museum Management Consultants for highlighting best practices," Herbon wrote. "We are committed to working with Hillsborough County, the MOSI Board of Directors, and our community … to address each of the recommendations made in the report."

County Commission Chairman Mark Sharpe, a member of MOSI's board, said the report highlighted things that need to change.

"I'm very excited about the direction moving forward," Sharpe said. "Wit took the museum and brought it to a nationally recognized level. … There were some areas that lapsed. Now it's time to turn it over to a new team."

Contact Will Hobson at whobson@tampabay.com or (813) 226-3400. Follow @TheWillHobson.

Audit critical of MOSI accounting, financial management 07/15/14 [Last modified: Tuesday, July 15, 2014 10:57pm]

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