HomeMy WebLinkAboutOIG No. 26-07 Miami Beach Cultural Arts Council Audit Joseph M. Centorino, Inspector General
1
TO: Honorable Mayor and Members of the City Commission FROM: Joseph Centorino, Inspector General DATE: June 10, 2026
PROJECT: Miami Beach Cultural Arts Council Audit OIG No.: 26-07 PERIOD: October 1, 2023, through September 30, 2024
The City of Miami Beach Office of the Inspector General (OIG) conducted an audit of the Miami Beach Cultural Arts Council (CAC), as required by City Code Section 2-64. The purpose of the audit was to assess compliance with selected provisions of Chapter 2, Article Ill, Division 6 of the City Code, titled “Cultural Arts Council.” This included evaluating whether grants were awarded and disbursed in accordance with the Program Guidelines and Eligibility Requirements and other related grant documents during the audit period of October 1, 2023, through September 30, 2024.
BACKGROUND: On March 5, 1997, Ordinance No. 97-3075 was adopted, establishing the Cultural Arts Council
(CAC), which is comprised of eleven members appointed at large by a majority vote of the Mayor and City Commission. Members of the CAC regularly convene once each month to strategize on the organization’s future initiatives. The grant program was initially established in 1998 as a
fundamental element of the Miami Beach Cultural Arts Council's mission, which is dedicated to developing, coordinating, and promoting the visual and performing arts within the City of Miami Beach for the enjoyment, education, cultural enrichment, and benefit of both residents and visitors. Since its inception, the City has allocated approximately $20 million in cultural grants, thereby supporting thousands of performances, exhibits, and other cultural activities in Miami Beach. The staff of the City of Miami Beach Tourism and Culture Department's Cultural Affairs Division, in collaboration with the Cultural Arts Council (CAC), assumes primary responsibility for conducting an annual review of applications submitted to the Cultural Arts Grant Program. This review process ensures that applicants meet the stipulated eligibility criteria and involves making
award recommendations to the City Administration and City Commission. To qualify for the grant program, applicants must be nonprofit 501(c)(3) cultural organizations or
cultural departments within an institution of higher learning (college or university) with tax-exempt status under other subsections of 501(c)(3) that wish to present or produce cultural and artistic events in the City of Miami Beach. These organizations must complete the required Grant
Application and provide the required documentation (e.g., Internal Revenue Service (I.R.S.) Forms 990, organizational charts, etc.) by the established program deadlines.
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
Page 2 of 8
The grant programs consisted of two principal initiatives:
Cultural Anchors for smaller arts institutions physically based in the City of Miami Beach, whose primary mission is year-round artistic and cultural programming that significantly contributes to the City of Miami Beach's cultural life. These organizations include Oolite Arts, The Bass Museum of Art, Jewish Museum of Florida, Miami City Ballet, Miami Design Preservation League, Miami New Drama, New World Symphony, Miami Beach Urban Studios-FIU, Wolfsonian – FIU, Holocaust Memorial Committee, Miami Beach Film Society, Miami Beach Botanical Garden,
Miami Dade Public Library, O Cinema, The Rhythm Foundation, and O, Miami. Cultural Presenters are organizations whose primary mission is to produce and present cultural
and artistic productions in Miami Beach in the following disciplines: film, multi-disciplinary, theater, visual arts, dance, music, and opera. Proposed projects should be for work that is new or has never before been presented in Miami Beach within the Cultural Presenters category. There were
seven subcategories: Music, Film, Dance, Multi-Disciplinary/Visual Arts, Opera, Chorus, and Theater.
The Cultural Arts Council (CAC) program grants are financed through Resort Tax revenues, as the Resort Tax designates 10% of its funds for arts-related initiatives. For the fiscal year (October 1, 2023 – September 30, 2024), a total of $1,047,207 was awarded to 47 applicants following the City Commission's ratification of Resolution No.2023-32851. Recipients of grants, upon the prompt fulfillment of the specified prerequisites, became qualified to receive up to the award amounts designated by the City Commission. Documentation verifying each recipient's compliance was required to be retained within the respective grant files and/or
within the GO Smart software managed by the Cultural Affairs Division.
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
Page 3 of 8
SCOPE, OBJECTIVES, AND METHODOLOGY:
The OIG audit focused upon determining whether the Cultural Arts Council complied with the provisions set forth in Chapter 2, Article 111, Division 6 of the City Code titled "Cultural Arts Council.” The audit also sought to determine whether grants were awarded in accordance with
the "Program Guidelines and Eligibility Requirements." The audit period for reviewing Cultural Arts Council compliance was October 1, 2023, through September 30, 2024. In addition to obtaining a basic understanding of the internal control system and assessing control risk, the OIG Auditor determined that the number of grants awarded during the audit period was 47. The Auditor selected a sample of five cultural anchors and ten cultural presenters and evaluated those cases for compliance with key testing controls. In general, the audit focused on the following objectives:
• To determine whether the Cultural Arts Council complied with the provisions set forth in Chapter 2, Article 111, Division 6 of the City Code titled "Cultural Arts Council."
• To determine whether the applicants selected met the Eligibility Requirements of the grant category for which they applied.
• To determine whether CAC properly reimbursed grantees an amount within the maximum allowed for their organization type, and not to exceed the total amount approved by the Commission.
• To determine whether the grantees complied with the "Final Report" requirements set forth in the Grant Agreement.
• To verify that the awarded grant payments were recorded correctly in "Munis," the City's Financial System.
• To determine whether deficiencies noted in the prior audit have been corrected (Audit Report OIG No. 24-18). The audit methodology included the following:
• Reviewing prior year's work papers, applicable policies and procedures, agreements, and relevant sections of the City Code/Charter and Florida Statutes conducive to completing the audit objectives.
• Gaining an understanding of the processes or departments to be audited and preparing an audit plan.
• Obtaining an understanding of internal controls by reading applicable policies and procedures, interviewing employees, and observing control procedures.
• Assess the effectiveness and weaknesses of internal controls, assess the control risk, and shape the extent of substantive testing.
• Employing the use of analytical review procedures for both planning substantive testing
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
Page 4 of 8
and confirming the reasonableness of audit findings and conclusions.
• Performing substantive testing consistent with the audit objectives above and examining, on a test basis, applicable controls, procedures, transactions, and records.
• Examining, on a test basis, evidence supporting current transactions (as well as events and conditions) to determine if management has taken steps to correct deficiencies disclosed in the prior audit report.
• Performing other procedures as deemed necessary. The CAC and the Cultural Affairs Division established a master plan for the arts and developed and followed guidelines for the approval, review, and funding of qualified not-for-profit organizations. Program files for each grantee were well organized, and supporting documentation
was maintained in the physical files and/or the GO Smart grant management system. The OIG Auditor examined all documentation provided by the Cultural Affairs Division for sufficiency and completeness. For each grant selected for testing, the OIG Auditor also verified the following: 1. All the required grant program activities were performed by the grantees. 2. Final Reports were prepared and submitted to the Cultural Affairs Division.
3. Supporting documentation was received and reviewed by the Cultural Affairs Division prior to the final payment.
RESULTS: Despite many positive attributes and a significant improvement over the prior year's audits, a few
established procedures and internal controls require strengthening based on the following identified deficiencies:
1. Ineligible Expense: The OIG considered a $2,000 expenditure of Grant Funds to be ineligible per program guidelines. 2. Lack of Eligibility Documentation Among Grantees: The eligibility documents submitted by grantees in the application were incomplete in many cases. 3. Grant Management System Date Retention Deficiencies: The application and final report deadlines could not be confirmed in the GO Smart grant management system.
FINDINGS, RECOMMENDATIONS, AND MANAGEMENT RESPONSES
FINDING # 1: Disallowed Costs: Condition: One $2,000 invoice was identified as an ineligible expense. The reimbursed
expenditure to the grantee, Italian Film Festival, Inc. (IFF), listed a charge for “Planning and logistics of XX Cinema Italy 2024” under the name of Claudio Di Persia, the IFF's president.
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
Page 5 of 8
Criteria: Pursuant to the Fiscal Year 23/24 Program Guidelines and Application Instructions for Cultural
Presenters, grant funds for Cultural Presenters may not be used towards administrative salaries or fees, nor to cover indirect or general operating costs related to the operation of the organization. The OIG understands that Mr. Di Persia, in his role as president of the IFF, is expected to plan
and organize the “XX Cinema Italy 2024,” the only event the IFF holds in Miami Beach, and that any payment for such work would be contrary to the above-mentioned conditions of the Program Guidelines.
Cause: The Cultural Affairs Division failed to properly review the grantee’s final report invoice and approved an expenditure that should not have been allowed.
Effect: The Cultural Affairs Division overpaid the grantee by the amount of the disallowed invoice.
Recommendations: The Cultural Affairs Division should establish written procedures for new employees to review and approve payments and to collect any outstanding funds due from the grantee for disallowed
expenses. Tourism and Culture Department Response:
Tourism and Culture Department (TCD) staff contacted Mr. Claudio Di Persia, the IFF’s President, to advise of OIG comments and obtain a response. TCD shared his response with the Office of
Inspector General on February 26, 2026. The response included that 100% of Mr. Di Persia’s paid
time is spent on programmatic and artistic director functions, which include screening and
selecting films, coordinating screenings, introducing films and film guests, and interfacing with actors and directors.
It is worth noting that Film Festivals operate differently than traditional arts organizations, with a
film programmer, such as Mr. Di Persia, operating in a curatorial manner. Programming and
artistic direction are considered an artistic line item versus a traditional administrative role. It is also worth sharing that Cultural Presenters are often smaller, grassroots organizations in which
team members have multiple roles/assignments that include operational, artistic, programmatic
and beyond, whereas Cultural Anchors have dedicated operations staff. This distinction is necessary as Mr. Di Persia’s expense would thus be allowable. Additionally, the recipient had
offered to shift the invoice to reflect the above.
Implementation Date: N/A
FINDING # 2: Lack of Eligibility Documentation Among Grantees
Condition: The OIG Auditor selected 5 of 14 anchors and 10 of 36 cultural presenters to verify whether grantees met the eligibility requirements set forth in the "Program Guidelines and Application Instructions" and complied with the terms of the "Executed Grant Agreement.” During the review,
it was noted that all selected program anchors and presenters were missing certain documentation in accordance with the intent-to-apply/pre-application requirements numbered 1,
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
Page 6 of 8
4, 5, and 6, as explained in the Criteria.
Criteria: Pursuant to the Fiscal Year 23/24 Program Guidelines and Application Instructions for Cultural Anchors, “Intent to Apply / Pre-application requirements,” applicants must upload the following
documents electronically, or the pre-application will not be approved: 1. Organization’s most recent 501 (c) (3) Letter of Determination (tax-exemption status).
2. Registration of nonprofit corporations with the Florida Department of Agriculture and Consumer Services, per the Solicitation of Contributions Act, under Charitable Organizations. 3. IRS Form 990, reflecting the organization’s most recent filing. 4. Current Board Membership with contact information for each member. 5. Current Staff List with brief biographies for each staff member. 6. Most up-to-date Staff Organizational Chart.
Cause: The discrepancies were primarily due to inadequate monitoring and control by Cultural Affairs staff and a lack of staff training.
Effect: The grantee's noncompliance with program guidelines undermines the City's regulations and
exposes the City to legal and reputational risks.
Recommendations:
The Cultural Affairs Division should implement written internal control procedures for the review and approval of application requests. Specifically, management should: 1. Develop and utilize an eligibility review checklist aligned with the specific organizational requirements. 2. Require supervisory review and approval of eligibility documentation. 3. Provide periodic training for staff and grantees regarding the importance of pre-award eligibility documentation requirements. Tourism and Culture Department Response: Prior to FY25, eligibility requirements were completed and checked off via the executive summary.
However, Department staff has since incorporated the intent to apply into the online application,
making all materials available for individual upload on GoSmart’s platform. Additionally, staff members are already trained in ensuring the documents are collected, and staff members conduct
a pre-cycle workshop to ensure grantees are also aware of process and procedures.
Implementation Date: The current recommendations as listed above have already been implemented and are
regularly used.
FINDING # 3: Grant Management System Deficiencies (Date Retention):
Condition: The application and final report deadlines could not be confirmed in the Go Smart grant
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
Page 7 of 8
management system because the system automatically overrode grantees' multiple submission dates. The OIG Auditor was unable to determine the exact submission dates within the grant
application package.
Criteria:
The Fiscal Year 23/24 Program Guidelines and Application Instructions for Cultural Presenters
and Anchors, Intent to Apply and Grant Application Timeline provides as follows: Application Submission Deadlines: Intent to Apply (Pre-Application) and Guidelines Available Online: Monday, January 16, 9:00 am Pre-Application Deadline: Friday, January 27, 5:00 pm
Full Application Available: Wednesday, February 1, 9:00 am Full Application Deadline: Wednesday, February 15, 5:00 pm Staff Review & Response Period: Monday, February 20 - Friday, February 24, 5:00 pm.
Full application Resubmission Deadline (corrections only): Friday, February 24, 5:00 pm.
Cause:
The date validation deficiencies were due to the following: 1. A limitation of the software (GO Smart), which overrode the grantee submission dates. 2. CAC personnel's failure to manually maintain the date history of documents submitted. 3. CAC staff turnover and lack of training on grantees’ application requirements.
Effect: This may result in improper evaluation, award, and disbursement of grant funds, and weaken the transparency, accountability, and integrity of the grant management process.
Recommendations: The Cultural Affairs Division should implement the following measures:
1. Implement automatic system controls and audit trail features to include full grantee application submission dates.
2. Establish a manual process to document the receipt dates for all information received within a particular grantee application. The manual file should also indicate when the full grant application is complete. 3. Require all CAC staff to complete training on grant program guidelines.
Tourism and Culture Department Response: TCD Staff has shared with the OIG office that at present time, automatic system controls are not an offered feature with GoSmart’s system, and therefore it is a system limitation. Staff have also
shared that moving forward, personnel will manually log the submission dates for GoSmart, to be
printed for the file and to be made available for record keeping in the future. It is worth noting that all staff managing grants complete review of guidelines, receive internal training, and additionally
have periodic check-ins with GoSmart’s support team.
Implementation Date: The current recommendations as listed above have already been implemented and are
regularly used.
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
Page 8 of 8
Respectfully submitted,
_____________________________ __________________
Joseph Centorino, Inspector General Date _____________________________ __________________ Norman Blaiotta, Chief Auditor Date cc: Eric Carpenter, City Manager Maria Hernandez, Assistant City Manager
Jason Greene, Chief Financial Officer Francys Vallecillo, Interim Tourism and Culture Department, Director Danielle Bender, Tourism and Culture Department, Cultural Affairs Manager
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beach 1130 Washington Avenue, 6th Floor, Miami Beach, FL 33139 Tel: 305.673.7020 Hotline: 786.897.1111 Email: CItyofMiamiBeachOIG@miamibeachfl.gov
Website: www.mbinspectorgeneral.com
Docusign Envelope ID: 57EBB6B1-1D32-86C3-8356-1383B900703F
6/11/2026 | 3:27 PM EDT
6/11/2026 | 3:38 PM EDT