SHREVEPORT, LA (KSLA) - Sci-Port: Louisiana's Science Center is strained financially.
And that has auditors doubting the hands-on museum's ability to continue under its current circumstances.
The science center's annual audit also alleges that Sci-Port incorrectly used money given by donors.
Despite auditor's concerns, Sci-Ports leaders maintain the center will remain open.
"Sci-Port always needs more money, but we are not going to close," said Ann Fumarolo, the venue's president and CEO.
Sci-Port, the only science center of its kind in the ArkLaTex, has been open in a 67,000-square-foot building on Shreveport's riverfront since 1998.
It's reputation for having kid-friendly events and interactive exhibits draws families and student field trips alike.
"We come here every year. This is about the fifth or sixth year, and the kids really enjoy it," said teacher Betsy Campbell, who recently brought her students from Lindale, Texas.
"It is local enough that we can drive within the school day and come to a place that has so much science."
But even with all the school groups passing through, the science center has ended most of its fiscal years the past decade in the red.
2016 was no different.
Fumarolo wants everyone to know that the venue, despite the financial issues auditors recently highlighted, is not going anywhere.
"Unless something catastrophic happens, we will be open."
The auditors' report is based on the science center's finances from June 2015 to June 2016 and a follow-up check in February 2017.
They found that Sci-Port's current liabilities exceed its current assets by $677,442 for the fiscal year 2016 and by $422,961 for fiscal year 2015.
"Those factors create an uncertainty about Sci-Port's ability to continue as a going concern," auditors wrote.
They circled back to check on the financial statements through Feb. 10, 2017, and discovered the center is in even more debt than at the end of fiscal year 2016.
"The going concern means that basically the entity can't operate indefinitely," explained Dare Johnson, who chairs Sci-Port's Board of Directors.
However, he said, the going concern conclusion can be misleading.
"It also has accrued expenses like vacations and employee leave, those are things you are not going to pay out within the next year. So, like I said, it is misleading on that."
In order to get back to a 1:1 ratio, meaning the center has enough money to pay all its bills, it needs $677,442.
In a letter to the editor in The Times, Johnson wrote that their losses are overstated without accounting for "depreciation of assets."
Similarly, Fumarolo wrote an open letter to the public on Sci-Port's website saying the losses were "overstated by the media, who did not account for depreciation of our assets when reporting our financial picture."
An accountant familiar with Sci-Port's finances crunched the numbers and found by accounting for depreciation of assets, Sci-Port's finances still show a profit loss of $47,195.
"Sci-Port is a nonprofit organization; and nobody expects it to actually have profits every year," Johnson said in response.
Additionally, auditors found that the science center was not using donated money correctly.
When a donor gives cash to Sci-Port, it's called "donor-imposed restricted cash" and the science center is only allowed to use the money for what the donors wanted the donation to be used for, like specific programs.
Sci-Port must maintain sufficient cash balances to comply with donor-imposed restrictions. However, auditors found that wasn't the case for 2016.
This means those restricted funds were not used for the intended purposes, breaking the agreements they signed with the donors.
"If I was a donor, I wouldn't be happy," Fumarolo said. "We are not saying that it is something that is OK, but we are saying it is being corrected."
She admits the decision to use donor-restricted cash was both intentional and an oversight.
"We had a lot going on. I am not a finance manager. You have to rely a lot on what your finance manager tells you and doing, and those kind of things. It really was just a very unfortunate mistake."
We asked Mike Sledge, who was Sci-Port's finance manager at the time, for comment.
He alleges that improper use of donor-restricted funds is nothing new for Sci-Port.
And Sledge issued the following statement:
Sci-Port's leaders declined to comment when asked to respond to Sledge's statement.
Fumarolo did say this is the first time this issue has popped up in an audit.
"I have been audited for 25 years, this is the first time. It is unfortunate that it happened."
With auditors' grim financial outlook for the science center, how will Sci-Port survive?
"When you are in a bad economy, it's hard to drive a science center when there isn't a lot of money and you need the money for operating," Johnson said.
Regardless, both he and Fumarolo insist that Sci-Port is in no danger of closing.
"What a huge thing to lose in this community, so nobody wants Sci-Port to close. Nobody."
Sci-Port has since put a small budget together this year and cut salaries.
According to Fumarolo, they didn't replace several part-time employees and laid off the following:
- programs director
- membership director
- programs manager
- visitor services manager
On top of that, Sci-Port officials hope the new children's museum "The Power of Play," or Pop, will be the venue's saving grace.
Sci-Port's website indicates that POP, which is geared for children age 8 or younger, opened November 2016.
The 10,000-square-foot, hands-on museum allows guests to experience a kid-size version of Shreveport-Bossier City.
"We were one of those science centers that believed we needed a new model. That's why we opened POP," Fumarolo said.
"When we were looking at dollars coming in from admissions this year, through December, we were down in our admission dollars, because there wasn't anything new or exciting."
However, she said, they've seen a spike in admissions since POP opened.
"In four months, we made up all of the dollars that we were down and are now ahead."
Fumarolo believes POP is part of their answer to get to a 1:1 ratio.
"Had we not had the issues that we had this year, our ratio would have been much better.
"Obviously, it's going to take us another three years to get back to the 1:1."
The audit shows admissions generated $466,000 in 2016.
Fumarolo believes POP will bring in an extra $250,000 in admissions a year.
But will POP hold the attention of the community for three years?
"Pop will be sustainable for three years. People love the POP," she said.
Sci-Port leaders also hope the aquarium opening down the street this fall will attract more people to the museum.
This isn't the first audit where auditors questioned the science center's ability to keep their doors open.
The question also arose during the center's 2014 fiscal year.