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The Montréal Fine Arts Museum

Essay by   •  December 9, 2017  •  Case Study  •  1,729 Words (7 Pages)  •  1,527 Views

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Simulation 2 (37 marks, 90 minutes)

The Montréal Fine Arts Museum (MFAM) is a non-profit organization that was founded nearly 25 years ago by the Monet brothers, who devoted their entire lives to promoting art. For the past five years, the MFAM has grown nicely due to its Curator’s talent for putting on exhibitions that the public finds very interesting.

As a result of the budget cuts announced by the government this year, grants for the arts were down considerably. The cut is even more significant for private organizations that, like the MFAM, have to raise 65% of their financing requirements through ticket sales in order to be eligible for a grant program.

The Chairman is very happy to announce some excellent news. As of April 1st, the London Museum will lend to MFAM, free of charge and for a period of nine months, its entire dinosaur and prehistoric art collection. This is extremely good news because it will attract the public and generate some much needed cash flow.

It is now February 26 and the Chairman of the Board of Governors, Mr. Monet, has just asked you, CA, the newly hired Controller, for your opinion on various matters concerning the Museum.

There are some concerns about the administration of the MFAM. A fraud was recently discovered involving a purchased painting that was found not to be authentic. This could have a serious impact on the Museum’s reputation and could cause the London Museum to refuse to lend its collection to the MFAM. You meet with a few different people to obtain an understanding of how the museum operates (Exhibit I).

In light of this fraud, Mr. Monet wants you to recommend controls that should be implemented as well as suggesting means for ensuring they are followed. These recommendations will be executed by yourself and Mr. James, a member of the Board of Governors who is also the Controller of a company in the area. The Board of Governors also wants you to raise to their attention any other significant control and operating weaknesses in the management of the Museum.

Furthermore, the MFAM announced publicly that on April 1st it will be launching a new website. The site will allow users to learn more about the permanent collection and current exhibitions as well as allow the public to make donations to the museum online. The Board of Governors has received a proposal from the potential supplier, WebStirs, (Exhibit II) and would like your opinion on it.

Finally, The Board of Governors is aware that the public is still reluctant to use the internet for donations and would like you to recommend measures to be taken to reassure potential donors and encourage them to use this advanced technology.


Exhibit I

Discussions Regarding Museum Operations

Curator, Mr. Picassi:

Mr. Picassi mentioned to you that he’s had some concerns with respect to the Museum’s new buyer, Mr. Vinci, for quite a while. He tells you he recalls a number of conversations with Mr. Vinci concerning the painting from a new “up and coming” artist that he desperately wanted to buy.  

Mr. Vinci said he had lost all the purchase documents for the painting during his last trip to Paris. This was a cause for concern as the painting turned out to be very expensive. In fact, it was the most the Museum had ever paid for work from a new artist. Mr. Picassi also wondered if the painting was genuine since Mr. Vinci had also misplaced the official document proving it was an original. This made the Curator very nervous because the Museum must present proof of authenticity for all new paintings before they are put up for exhibition.

An appraiser has since reviewed the painting’s authenticity and has confirmed that it is a reproduction and not a genuine copy. Two days ago, the buyer was fired and an out-of-court settlement will likely be reached.

Chairman of the Board of Governors, Mr. Monet:

 

Mr. Monet is now worried about the authenticity of all the paintings Mr. Vinci purchased. He was not with the Museum for very long but he did have time to buy quite a few pieces of art. Mr. Monet explains there are no clear procedures for purchasing artwork and purchases are not approved by management or the Curator. He admits that this kind of risk was never even considered by the Board of Governors.

The buyer was therefore the only person responsible for buying new artwork, which he did mainly at auctions he attended personally. A catalogue of the paintings sold by the auction house was reviewed by the buyer a month before the sale. He chose works he thought were interesting for the Museum. The Curator could also make suggestions based on exhibitions he wanted to put on, but the buyer always had the last word.

At auctions, the buyer would bid on the paintings he wanted and if he won, he had to pay by certified cheque or credit card. He could then have them delivered by the auction house or bring them himself, which he always did. He was given an invoice and later on an authenticity certificate to corroborate the payment.

It often required more than a week before the buyer submitted the invoices for the paintings purchased, and nobody ever checked to ensure the Museum did in fact receive them.  

Former Controller, Mr. Vango:

Mr Vango tells you that since October, MFAM adopted a new “donor reward” policy. His assistant, Ms. Rembrant, gives free Museum admission tickets to donors in order to thank them for their donation. She always prints a lot of free tickets in advance so that she can have them when needed – she hates being disorganised. These tickets are excluded from the current numerical sequence. There is no approval process before tickets are given away as Mr Vango trusts Ms. Rembrant completely because she’s worked for the Museum for more than ten years.

Ms. Rembrant also helps a lot with accounting. She removes donations from the donation box at the entrance of the Museum and counts the money. This is very useful as the MFAM is short staffed and the donation’s box usually contains sizeable amounts by the time it is emptied. After counting the money, she inputs the amount in the system and makes the bank deposit.

In addition, Ms. Rembrant is very good at recruiting potential donors. For example, she frequently meets future donors by taking them to lunch or dinner to explain the Museum’s activities. MFAM pays her expenses when she does these activities. Every few weeks she writes down on a sheet the various expenses that she incurred for this purpose and I make out a cheque.

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