Music Yukon in debt to government

Music Yukon isn't singing about the $56,000 it owes the territory. A government-ordered financial review of the organization has uncovered years of financial mismanagement.

Music Yukon isn’t singing about the $56,000 it owes the territory.

A government-ordered financial review of the organization has uncovered years of financial mismanagement.

But the debt really only became apparent in October when the organization was sitting down to review applications for the Cultural Industry Training Fund it administers.

The fund, which doles out government money to artists and professionals to hone their skills, was put under the control of Music Yukon in 2004 so the nonprofit could take advantage of the 15 per cent administration fee.

But when it was time to pay last year’s round of cultural training applicants there was no money in the bank.

Music Yukon had already drained those funds and re-directed them to other areas of the organization.

The nonprofit didn’t have the money to pay the applicants and neither did the Department of Tourism and Culture.

The Department of Education eventually picked up the outstanding tab and promptly sought a five-year financial review of the organization.

The organization’s financial woes aren’t new.

When Steve Gedrose stepped into the position of executive director last fall, he realized Music Yukon’s accounts were wonky.

Past director Mark Smith had been mismanaging funds and the board of directors hadn’t noticed.

The board has long been driven by the executive director and not the board, said Gedrose.

“There was no one there overseeing the day-to-day stuff,” he said.

“I think the board should have been more accountable.

“I can’t think of anybody with a lot of financial expertise on the board or these things would have been questioned more closely.”

But the funds didn’t end up lining Smith’s pockets, Gedrose asserts.

“If that was the case, there would be criminal charges and all kinds of other things that haven’t evolved,” said Gedrose.

The money was put into Music Yukon to fund projects and staff time for the organization.

The organization may have racked up debt, but the government played a role in the equation too, he said.

He’s puzzled why the government would continue funding Music Yukon if there were noticeable financial problems.

“How could this keep going on when there’s final reporting going on each year and new agreements entered into?” he said.

“(The government) must have perceived everything was fine.”

The organization has been struggling to stay in the black for the better part of a decade, said board president Grant Simpson.

Music Yukon has never been able to fully support itself because of the funding arrangement it has with the government.

The Yukon government gives money to the resource centre on a project-funding basis. It requires the organization to match the funding that comes in, sometimes up to 50 per cent.

The resource centre doesn’t have the capability to raise those kinds of profits, said Simpson.

“We’re a service-based organization for artists.”

Music Yukon receives money from other outside funders like FACTOR (The Foundation Assisting Canadian Talent on Recordings), but it isn’t enough, he said.

A loose funding arrangement with the government also allowed Smith to draw down the cultural training account.

Music Yukon receives a total of about $300,000 in funding each year.

The organization gets $50,000 from the Film and Sound Commission for the resource centre and staffing and $75,000 from Tourism and Culture to run the On Yukon Time project. They were also handed an additional $75,000 for the Cultural Industry Training Fund of which they were to keep only 15 per cent. Other funding came from FACTOR and small project funding.

But the money would come into the organization all in one lump sum from the Film and Sound Commission and, after that, it was hard to track, said Simpson.

It is the first thing the board is setting out to correct, he said.

In the meantime, Tourism and Culture has stopped funding Music Yukon’s cultural training fund.

The Film and Sound Commission has also frozen the organization’s funding until another review of the organization wraps up this fall.

That has left Gedrose pulling money from other sources for his paycheque.

“I get paid when it comes around,” he said. “Right now I’m behind.”

Rumours circulated earlier this year that the Film and Sound Commission was thinking of absorbing the resource centre because of its financial problems.

Simpson denied that, saying both groups have an amicable relationship.

The board has met with the government three times in the last two years because of its finances, said Simpson.

Each time, the board has requested core funding to sustain it.

“We’ve had trouble trying to resolve our finances over the last two years,” he said.

“Now we need to find more sustainable sources of funding.”

Contact Vivian Belik at

vivianb@yukon-news.com

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