Board members overseeing the half-completed American Indian Cultural Center and Museum frequently selected the most expensive plans even as funding lagged, but there is no evidence of financial wrongdoing, said the state auditor.
“The board chose the most expensive of six proposals presented by its architect,” State Auditor Gary Jones said in a prepared statement. “They decided to build a $169 million facility when only $5 million in funding had been secured. Throughout the years, although additional funding was not forthcoming, the board maintained its commitment to the most expensive plan.”
The audit of the Native American Cultural and Educational Authority, released Wednesday, details how the costs of the still-unfinished museum have ballooned out of control since the state agency's inception in 1994.
“The project has existed in some form for eighteen years, during which time more than $97 million in state funding has been used for its purpose,” the audit found.
The state has provided $71 million for the building and more than $26 million to the agency for operations and debt payment, according to the audit.
Another $80 million is still needed to complete the project, said Blake Wade, executive director of the authority. That would bring the overall price of the project, including federal, state and private funds, to $170 million.
He said the audit, despite the criticism of past decisions, is an important step in acquiring both private and public support to complete the very visible museum just off Interstate 40 on Eastern Avenue.
“Overall, I'm very delighted that we have finally gotten through this state audit,” Wade said. “To realize that we had no financial wrongdoing … is very pleasing to me personally and professionally.”
And Wade said it was pleasing to the private donors who have committed $40 million to complete the project, contingent on a $40 million match by state government.
“The donors are assured their money is being accounted for,” he said. “We have one more chance to get this match from the state. I'm very optimistic.”
Wade said if lawmakers approve funding for the project by the last half of the next session — April or May — the museum can still be completed by the ambitious December 2014 goal.
“I will never ask for another dollar,” he said.
The audit was requested by Gov. Mary Fallin after pressure from lawmakers opposed to giving more state money to the stalled project.
A news release from Fallin's office said the governor was still supportive of the project Wednesday and that a half-built facility on prime property was a wasted opportunity.
“There are many factors that have led to these outcomes and the delays in the project's completion have in turn wasted taxpayer resources due to increased materials costs, as well as delaying the generation of revenue,” the emailed statement said. “However, with the addition of new leadership last year, Governor Fallin feels the NACEA has begun to correct many of the issues addressed in the audit.”
Not convinced is longtime opponent of the project, Sen. Patrick Anderson, R-Enid, who led opposition in the Senate last year to a proposed $40 million bond issue to fund the project. The proposal was defeated by a single vote in the Senate, making it the third time additional funding for the museum has been rejected.
Anderson said the report vindicates critics of further debt financing for the project.
“This project is the epitome of government waste and demonstrates how easy it is for government officials to spend other people's money without regard to cost,” Anderson said in a prepared statement. “The leadership of this project has failed miserably and their failure certainly does not deserve to be rewarded with additional state funding.”
‘World class' facility
In August 2004 the agency board — composed of six voting appointed members and five nonvoting ex officio members — approved a $136.1 million “Vision Plan” for the project over an $85.3 million “Preferred Plan.”
At the time the board had less than 25 percent of the funding secured needed to implement the Vision Plan.
“The use of public funds for the project should have warranted a more responsible view of expenditures, one in which the Board supplies its contractors with a set budget and asks what options are available within that budget,” according to the audit.
Instead the board adopted a policy of creating a “world class” facility, which became synonymous with the most expensive, the audit found.
Wade said he cannot fault the board for selecting the visionary plan.
“That was what their mandate was,” Wade said. “That was what they were supposed to do. I would rather have a world-class facility.”
By building things to Smithsonian Museum standards, Wade said, the museum someday will be able to attract Smithsonian exhibits and other traveling exhibits that have strict standards for climate control and other variables.
Among the costs criticized by the audit was $18.7 million paid to consultants from 2003 to 2012, including architecture firms, project managers, geotechnical consultants, attorneys, design developers and institutional planning services.
The large number of contractors was necessary, Auditor Gary Jones said, because of the inexperience of the board and staff members.
“They seemed to want to hire the most expensive consultants overall,” he said.
The state audit lays out a number of recommendations and options for the state agency.
The recommendations are that the state agency:
• Develop a comprehensive budget that is readily available to stakeholders.
• Enhance legislative oversight by making it an independent agency directly accountable to lawmakers.
• Modify board membership to provide more qualified members and reinstate the voting rights of ex officio members of the board.
• Ensure there are different board members overseeing the state agency than are overseeing a nonprofit operating in conjunction with the state to avoid conflicting with open meetings laws and the appearance of impropriety.
• Develop a realistic business operating plan.