Audit of the Massachusetts Cultural Council Overview of Audited Entity

This section describes the makeup and responsibilities of the Massachusetts Cultural Council

Overview

The Massachusetts Cultural Council (MCC) was created by Section 15 of Chapter 653 of the Acts of 1989. This act added Section 52 to Chapter 10 of the Massachusetts General Laws, establishing MCC within the Office of the State Treasurer (OST), but not making MCC subject to OST’s control.

According to its website,

The Mass Cultural Council is a state agency that promotes excellence, inclusion, education, and diversity in the arts, humanities, and sciences, fosters a rich cultural life for all Massachusetts residents, and contributes to the vitality of our communities and economy.

The Council pursues this mission through a wide range of grants, initiatives, and advocacy for artists, communities, organizations, and schools.

MCC is governed by the Massachusetts Cultural Council Board, which consists of 19 members appointed by the Governor (there were 18 members and 1 vacancy as of June 30, 2021). Board members serve three-year terms with staggered appointment dates to avoid all 19 members having the same term expiration date. The Governor chooses a chair and vice chair from the board members. By majority vote, the board approves an annual program of grants to offer and an annual budget. An executive director, who is appointed by the board, manages MCC’s daily activities.

As of March 31, 2021, MCC had approximately 32 full-time employees. Its office is at 10 St. James Avenue in Boston. In fiscal year 2020, MCC received an appropriation of $18,180,000, received $9,713,228 from donations and grants, and expended $20,516,542. In fiscal year 2021, MCC received an appropriation of $18,180,000, received $19,738,444 from donations and grants, and expended $32,914,373.

Surveys

According to MCC management, during the last two weeks of March 2020, MCC management and staff members met to discuss their concerns about the effect of the 2019 coronavirus (COVID-19) pandemic on individuals working in the arts; at Massachusetts cultural nonprofit organizations (NPOs), which are Internal Revenue Service (IRS) 501(c)(3) organizations¹ that dedicate all profits to enhancing art programs in the community; or at local town cultural councils. MCC was concerned about how cultural NPOs and scheduled performances for individual artists and independent teaching artists, humanists, or scientists² were affected by the COVID-19 pandemic.

In late March 2020, MCC conducted the first of five surveys that asked individuals working in the arts and at cultural NPOs about the financial effect the COVID-19 pandemic had on them. On April 7, 2020, based on the first survey, MCC’s board approved the first grants and created guidelines for its fiscal year 2020 COVID-19 Relief Fund for Individual Artists, which was funded by MCC’s appropriation, of $1,000 grants to artists. That month, MCC sent a second survey to individual artists and cultural NPOs. In June 2020, MCC conducted a third survey that was available only to cultural NPOs. In October 2020, MCC conducted a fourth survey of individual artists and cultural NPOs. In January 2021, MCC conducted a fifth survey of only individual artists. On January 7, 2021, MCC’s board approved a second round of grants ($1,500 for individual artists).

The tables below detail the results of the five surveys MCC sent to individual artists and cultural NPOs.

Survey Responses from Individual Artists

Dates of Surveys	Number of Respondents	Total Loss of Revenue	Canceled Performances and Closed Schools of Dance, Music, and Art
March 2020	595	$2,885,222	5,047
April 2020	2,345	$16,527,749	38,219
October 2020	2,423	$20,138,858	39,693
January 2021	2,951	$30,403,616	67,986

 

Survey Responses from Cultural NPOs

Dates of Surveys	Number of Respondents	Total Loss of Revenue	Jobs Affected by Layoffs, Furloughs, and Reduction of Hours
March 2020	566	$55,748,138	8,221
April 2020	700	$264,799,746	15,381
June 2020	392	$424,866,284	17,020
October 2020	898	$483,519,270	30,616

 

COVID-19 Relief Fund for Individual Artists Grants

On April 7, 2020, according to the meeting minutes of MCC’s board, the board approved a fiscal year 2020 COVID-19 Relief Fund for Individual Artists grant program (with grants totaling $272,000) for individuals who were negatively affected by the COVID-19 pandemic. Under this relief fund, MCC offered $1,000 grants to 272 individuals. MCC allocated $225,000 from its annual appropriation, and the New England Foundation for the Arts (NEFA) committed an additional $47,000.

MCC disbursed grants to 271 of the 1,872 applicants:³ $224,000 from its appropriation and $47,000 from the NEFA funding. See Appendix A for the fiscal year 2020 COVID-19 Relief Fund for Individual Artists grant guidelines.

Individuals could apply using the MCC website. Since there were more than 1,800 applicants, MCC selected the 272 grant recipients by using a random number generator to assign a number randomly to each applicant. MCC sorted the applicants by region, based on their locations in the state, and sorted the numbers from lowest to highest. MCC selected applicants from each of the six regions, starting with the lowest random numbers, and disbursed the funding based on the percentage of applications received from each region:

Applications per Region

Region	Number of Applications	Percentage
Greater Boston	640	34%
Central	166	9%
Metrowest	107	6%
Northeast	210	11%
Southeast	359	19%
Western	390	21%
Total	1,872	100%

 

In addition, on May 19, 2020, the Gary Knisely and Varian (GKV) Foundation donated $30,000 to MCC for grant awards to individual theater professionals living in Berkshire County. According to the GKV Foundation’s website, the foundation supports “individual development and related community impact through the use of a range of artistic media such as the visual arts, music, and dance.”

MCC disbursed the fiscal year 2020 GKV Foundation donation in $1,000 grants to 30 individual theater professionals who met the criteria for the fiscal year 2020 COVID-19 Relief Fund for Individual Artists grant and lived in Berkshire County. See Appendix B for the GKV Foundation grant guidelines.

MCC’s management approved $1,500 fiscal year 2021 COVID-19 Relief Fund for Individual Artists grants to individuals on January 7, 2021. MCC allocated approximately $1,801,000 from its annual appropriation for these grants.

MCC started processing fiscal year 2021 COVID-19 Relief Fund for Individual Artists disbursements on April 21, 2021. As of June 30, 2021, it had issued grants of $1,500 each (for a total of $1,155,000) to 770 individuals who had not previously received grants from the fiscal year 2020 COVID-19 Relief Fund for Individual Artists or GKV Foundation grants, and it was still processing 11 disbursements. Individuals could apply using the MCC website. See Appendix C for the fiscal year 2021 COVID-19 Relief Fund for Individual Artists grant guidelines.

Cultural Organization Economic Recovery Program

In October 2020, as part of Governor Baker’s economic recovery plan, MCC received $10,000,000 to address the needs of Massachusetts cultural NPOs that were negatively affected by the COVID-19 pandemic. Under this plan, the state Executive Office for Administration and Finance initiated an interdepartmental service agreement (ISA) with MCC. The ISA partnered MCC with the state Executive Office of Housing and Economic Development (EOHED) to issue grants to selected cultural NPOs using the aforesaid $10,000,000. MCC was responsible for creating grant guidelines, developing the grant application, processing grantee documentation, scoring and evaluating applications and supporting documentation, submitting prospective grantees’ applications to EOHED, contacting approved grantees, and processing payments in the Massachusetts Management Accounting and Reporting System (MMARS). EOHED was responsible for reviewing and approving the final grantee list. The ISA stated that $2,000,000 was to be allocated to cultural NPOs with no more than 25 employees and the remaining $8,000,000 was to be allocated to cultural NPOs of any size.

These grants were to be used for general operations, employee payroll and benefit costs, mortgage interest, rent, utilities, and interest on other debt obligations, according to the ISA. The awarded grants ranged from $1,000 to $100,000; they equaled either the cost of three months of documented operating expenses or a total of $100,000, whichever was lower. Cultural NPOs applied using the MCC website and uploaded the required grant application documentation. During the application process, MCC used a scoring system that awarded points based on how applicants answered each question. The applicants were scored using Pearl, a repository software program that can score and rank information, and then ranked in relationship to need: the highest scores indicated the highest need. Grants were awarded to cultural NPOs with the highest scores until funding was exhausted. MCC’s management stated that they reviewed documentation and started processing payments in December 2020. See Appendix D for Cultural Organization Economic Recovery Program grant guidelines.

MCC’s Software

MCC uses Go Smart, a grant management program designed for arts administrators,⁴ on its website. This software allows administrators to design online grant applications. It enables individuals or cultural NPOs using MCC’s website to apply online for grants, upload required documents, and receive confirmation emails from MCC. In addition, MCC can use Go Smart to generate grant application reports and a list of all grant applications.

MCC exports the list of all grant applications from Go Smart to Excel and uploads the applications to Pearl. Pearl imports Excel reports; scores and ranks applicants based on how they answer application questions; sorts application data; and then exports Excel reports using the sorted application data, which MCC employees can use as working lists. Based on these lists, employees who are assigned to the grants review applications to ensure that the necessary documentation has been uploaded and supports applicants’ requested amounts.

Payments are made to each individual and cultural NPO through MMARS once MCC receives from the applicant a signed contract, completed electronic fund transfer forms, and a completed IRS Request for Taxpayer Identification Number and Certification.

Office of the Comptroller of the Commonwealth’s “COVID-19 Pandemic Response Internal Controls Guidan

On September 30, 2020, the Office of the Comptroller of the Commonwealth provided guidance for state agencies in response to the COVID-19 pandemic. The guidance helped state agencies that were experiencing significant changes identify their goals, objectives, and risks associated with the COVID-19 pandemic. Objectives included telework, return-to-work plans, changes to business processes, and safety protocols for staff members and visitors.

Cybersecurity Awareness Training

According to MCC’s Employee Handbook FY2020,

The Mass Cultural Council follows the Enterprise Information Security Policies and Standards established by the [Executive Office of Technology Services and Security, or EOTSS] Enterprise Security Office.

EOTSS has established policies and procedures that apply to all Commonwealth agencies. Information Security Risk Management Standard IS.010 requires that all new and existing Commonwealth personnel be trained annually on cybersecurity awareness. Section 6.2 of the document states that the objective of information security training is to “educate users on their responsibility to help protect the confidentiality, availability and integrity of the Commonwealth’s information assets.”

1.    IRS 501(c)(3) organizations are public, charitable, tax-exempt organizations.

2.    The fiscal year 2020 COVID-19 Relief Fund for Individual Artists grant guidelines define individual teaching artists, humanists, or scientists as individuals “who [promote] education in the arts, humanities, or interpretive sciences to people of any age, who typically [work] in schools or other educational settings.”

3.    One applicant, after being chosen to receive funds, did not provide MCC with a signed contract.

4.    Art administrators operate programs whose missions are in the arts, such as cultural organizations, theaters, museums, symphonies, and ballet companies. Their other responsibilities may include managing budgets, receiving and disbursing grants, raising funds, and promoting events.

Date published:	June 16, 2022