Former BSO conductor David Zinman joined locked out musicians on the picket line at the Meyerhoff Monday morning. (Jerry Jackson/Baltimore Sun video)
The long-awaited Baltimore Symphony Orchestra audit report was finally released to the public and, yes, it contained foreboding language about the future of the symphony orchestra (“The BSO should have been transparent about its financial crisis all along,” July 17). In as much as this language serves current BSO management’s message so well, one might ask why management had to be pressured to release the report. There are a number of reasons management likely preferred that the audit report not become public.
First of all, in spite of the auditors’ expression of “substantial doubt” about the BSO’s future, the opinion is unqualified, i.e., “clean.” There was no “going concern” exception taken in the report — and the auditors confirmed that their opinion was not “modified” by “going concern” considerations. The observation about the BSO’s future is gratuitous, but it does not alter the unqualified nature of the opinion.
Second of all, as in prior years, the BSO and the endowment trust do not have separate financial statements. Their financial positions, activities, and cash flows are presented within consolidated financial statements for a reporting entity called “Baltimore Symphony Orchestra, Inc. and Affiliates.” While the endowment trust was separated from the BSO in 2006, accounting rules require that they be combined within a single entity.
And how is that single entity doing? In fact, it is doing quite well. Its financial statements reveal that as of August 31, 2018, the consolidated entities had combined net assets of about $81 million, an increase of $1.3 million from the combined net assets of about $79.8 million as of August 31, 2017. Further, the prior year’s combined net assets of $79.8 million represented an increase of about $2.4 million over the combined net assets of $77.4 million as of August 31, 2016. Thus, over the past two reported fiscal years, the consolidated net assets grew by $3.7 million.
Yes, the BSO is starved for cash, but that’s always been by design. For a decade, the endowment trust’s annual draw provision has been far more restrictive than Maryland law permits, and other trust agreement provisions could be relied upon to authorize more support for the BSO. Unfortunately, while the consolidated entity continues to grow, more support for the BSO isn’t consistent with the endowment trust board’s vision.
Greater support from the endowment trust combined with a serious effort to increase revenues would save the BSO. Sadly, those in charge prefer to support their recently reported vision of a “successor” organization. The BSO’s problems aren’t simply financial, they’re managerial. No wonder BSO and endowment trust management would have preferred that the latest audit report remain in their board rooms.