Austin City Audit Report Highlights Changes in Cultural Arts Funding and Calls for Structural Reforms

Austin City Audit Report Reveals Changes in Cultural Arts Funding

Austin has seen ongoing changes in the way its cultural arts funding is managed according to a recent audit by the City Auditor. The report highlights a turbulent state of affairs concerning the funding for arts programs, creating an ongoing discussion about the management of grants and support for local artists and organizations.

Key Findings from the Audit

The audit was requested by a group of City Council members, aiming to address six core questions about the city’s arts funding. These questions included where the funds are sourced from, how they are allocated, and how other cities manage their arts and culture functions. One significant finding was the impact of the Hotel Occupancy Tax (HOT) on funding these programs. Traditionally, grants from the Cultural Arts Division have relied on funds generated through HOT, but a shift occurred during the pandemic.

In 2021, Austin injected $11.3 million in funds from the CARES Act into its cultural programs, primarily targeting non-profits and workers in the creative sector. The following year, the American Rescue Plan Act provided an additional $12 million. This federal support allowed the city to make a significant change in how it assessed grant awards, moving from relying on projected HOT revenues to actual collections from prior years. This shift brought greater stability and predictability to the funding process.

Administrative Expenses and Data Collection Issues

The report also noted that administrative expenses related to these programs varied between 4.9 percent and 8.4 percent of total expenditures. Furthermore, third-party administration accounted for an additional 4.5 percent of spending. However, concerns were raised about the quality of data collected from grant applicants, particularly regarding tracking equity and inclusion efforts in the arts.

Since 2018, funding for artists and local organizations has sparked heated debate amid rising applications and decreased funding for some long-term recipients. This led to a restructuring of the evaluation process for grant applicants, establishing three new programs: Nexus, Elevate, and Thrive. These programs focused on prioritizing historically marginalized groups and adjusted their requirements to be more inclusive.

Calls for a Stand-Alone Arts Department

Another significant aspect of the audit was the ongoing discussion about creating a stand-alone Department of Arts, Culture, and Creativity. This idea has been on the table since at least 2008, tied to the CreateAustin cultural planning process. Despite several discussions regarding the feasibility of a separate department, no concrete actions have been taken. EDD staff mentioned that no explicit directive had been given for such a department, despite previous inquiries about separating arts and culture from the Economic Development Department (EDD) not yielding positive responses.

Next Steps Remain Unclear

The audit was initiated by Mayor Pro Tem Leslie Pool along with several council members. While it provides an in-depth look into the funding processes, the report does not include any recommendations or next steps for the staff or the Council. In recent months, Austin has announced $21 million in grants targeting musicians and artists through the Nexus, Thrive, and Elevate programs, in addition to the Live Music Fund. However, it is crucial to note that the audit did not cover music-related grant programs.

As Austin continues to navigate its funding structure for cultural arts, the city’s management of these grants remains a crucial topic. Stakeholders and citizens alike are now looking to City Council for guidance on how to move forward, especially for historically marginalized groups seeking support in the local arts scene. The discussions surrounding equity, funding stability, and structural changes will likely persist as more data becomes available and the city’s priorities evolve.