Scott Sisco, interim director of the Department of Cultural Affairs, rejected criticisms Tuesday of his Arts Council and Museums Division levied by legislative auditors.
He told the legislative audit subcommittee, headed by Assemblywoman Sheila Leslie, D-Reno, that while he may agree with the audit recommendations, he objects to the underlying criticisms of his agency.
"It's the stated findings behind it we object to, not the recommendations," he said.
Auditors charged he mishandled money dedicated to the artist services and Arts in Education programs by taking money from three different budget categories to fund that program without permission for the transfers.
Sisco said that was simply done to make sure all the accounts benefiting from the program contributed to its cost.
"It was never the intention that collaborative projects and initiatives would not be paid for out of multiple categories," he said in his formal response to auditors.
Leslie, however, said it violates the rules.
"If you don't want to tie yourself to specific categories, prepare your budget differently," she said.
In another case, the Arts Council spent $37,487 from the sale of special license plates to support children's art education without going through a competitive bid process. Sisco said it made no sense to go through the extensive grants process since only one statewide organization - Very Special Arts - qualifies for the money.
"But there's no opportunity for another agency to say, 'I qualify,'" she said.
Auditors also criticized the Division of Museums and History, saying legislative funding has increased 81 percent over the past decade while self-generated funding from sales, entry fees and other sources has declined 5 percent. In addition, they said the number of visitors to Nevada's seven state-operated museums has declined 15 percent to 185,000 over that period.
They blamed disorganized planning and marketing efforts, saying the division doesn't have a clear strategy for drawing visitors.
Sisco said he was "disheartened" that auditors ignored the work the agency has done over the past seven years to keep those museums open even though "probably few other state agencies are as tightly funded."
"Most of our funding is directed at keeping the doors open," he said because of flat budgeting in the face of rising costs and increased expenses from opening two new facilities since the late 1990s, "what little discretionary funding a museum has is bit by bit drained away."
"While I'm very sympathetic to underfunding, the focus of this committee is how you're spending the money we do give you," Leslie said.
Sisco said his biggest complaint wasn't directly about the recommendations themselves which call for a more comprehensive approach to strategic planning, better accounting and budgeting of privately raised money, and work to improve internal controls, policies and procedures.
He said his complaint was the statements within those audit documents charging that those policies, procedures and internal controls were inadequate and that planning was disjointed and ineffective.
Because of that objection, he said Cultural Affairs would reject several of the audit findings.
In other business, the audit subcommittee gave the University and Community College System of Nevada another three months to meet recommendations for improving its process for handling capital construction projects, contracting and bidding procedures.
System legal counsel Danny Klaich told the committee there were two critical turnovers in the system staff and "we dropped the ball on this."
The system's construction and bidding procedures were criticized - especially by a contractor who charged he was cut out of energy retrofit contracts by a no-bid system. Auditors recommended a variety of changes to make the contracting process more open and competitive.
Klaich said none of those changes has been completed.
Leslie said lawmakers have no choice but to accept that admission but that they would expect a much more positive answer at the panel's May meeting.
-- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.