Audit: N.O. Jazz Orchestra Improperly Spent State, Local, and Donated Money

An investigative audit into the financial operations of The New Orleans Jazz Orchestra, Inc. (NOJO) found that over nearly seven years the organization improperly spent grant funds and other state, local, and donated money.

NOJO’s records showed that, in addition to revenue from donations, ticket sales, performance fees, and City of New Orleans grants, the organization received money from the State to help build the New Orleans Jazz Market. As a result, it was considered a quasi-public agency. Under Louisiana law, when a quasi-public agency commingles its public and private funds – as NOJO did – all of its funding may be audited.

Investigative auditors found that between June 2009 and February 2016, NOJO employees, including former Artistic Director Irvin Mayfield and former President and Chief Executive Officer Ronald Markham, incurred $179,226 in lodging and entertainment charges that appeared to be personal in nature. The Louisiana Constitution and state law both prohibit the use of public funds for personal benefit.

Auditors also found that NOJO received $1,210,000 in grant funds from the City of New Orleans to create a sculpture garden in Louis Armstrong Park. Although the funds were to be used to pay the artists creating the sculptures, NOJO appeared to have used at least $302,163 to pay operating expenses. Records indicated as well that NOJO used $175,503 of subsequent grant money from the City to pay the artists who created the sculpture garden. By improperly using grant funds for operating expenses and/or expenses associated with other grants, management may have violated state law and NOJO’s grant agreements with the City.

In addition, NOJO received $1,110,000 from the State to pay construction expenses for the Jazz Market. However, records showed NOJO used $885,603 of the money for unauthorized expenses. NOJO also received $1,289,701 in local and donated funds to be used for the Jazz Market, which the organization appeared to have used for other purposes. By using state, local, and donated funds for purposes other than Jazz Market expenses, NOJO management may have violated the Louisiana Constitution, state law, and its cooperative endeavor agreement with the State.