NEW ORLEANS -- The state legislative auditor has released an independent audit of Irvin Mayfield’s New Orleans Jazz Orchestra, the first public review of the orchestra’s finances since WWL-TV exposed $1.03 million in payments that the Grammy-winning trumpeter and his business partner directed to their orchestra from another charity they led at the time.
The NOJO audit, performed by an independent accounting firm, found material weaknesses and significant deficiencies in the nonprofit's accounting -- including wide use of a NOJO debit card without supporting documentation, poor record keeping for revenue from tour groups and patrons at a bar NOJO runs and hundreds of thousands of dollars in payments to Mayfield without a written agreement for his services.
The audit comes as the New Orleans Public Library Foundation continues to seek recovery of the money Mayfield and partner Ronald Markham transferred between 2012 and 2014. They changed the Library Foundation’s articles of incorporation to expand its mission beyond simply supporting the city’s public library system, passed resolutions granting themselves special powers to make unilateral financial decisions and immediately began sending money to the NOJO, which paid them each six-figure annual salaries.
The money – given to the Library Foundation by donors to support the libraries – instead went to help build a $10 million NOJO headquarters, jazz club, bar and community space called the People’s Health New Orleans Jazz Market. Markham stood by the use of the money, saying it would provide much-needed library-style services in Central City and would offer access to some of the city library’s jazz collection.
NOJO’s board is led by Ron Forman, the head of the Audubon Institute and city Audubon Commission, and Forman promised last May to pay the entire amount back. But discussion of a formal agreement to pay the money back last summer never materialized. And recently, NOJO appeared to balk, insisting that its own legal review determined the money had been properly spent.
The audit released Monday by the legislative auditor finds a number of deficiencies in NOJO’s internal financial controls, including the fact that the non-profit orchestra has been operating without a formal agreement with its founder, Mayfield, for his services as artistic director or for those he provides through his private, for-profit production company.
Mayfield has recorded a salary of between $100,000 and $148,000 a year as NOJO’s artistic director and Markham has made $100,000 a year plus benefits as the orchestra’s executive director, according to tax records. In addition, NOJO has paid Mayfield’s publishing company as much as $109,000 a year for its concert productions and other work.
Combined, Mayfield and his production company were paid $210,000 by NOJO in the year ending June 30, 2015, the audit said, all without anything in writing. The audit calls that a significant deficiency, along with some other accounting issues, and NOJO management responded by promising to fix them.
This is the second year NOJO had to report a full audit to the legislative auditor because the orchestra received capital outlay funds for the Jazz Market project. The Legislature decided to cut off further funding last year as a result of the WWL-TV reports on the redirected library donations and a federal criminal investigation. But last year’s audit did not go into as much detail and did not lay out specific financial weaknesses and deficiencies.
The audit also says NOJO got $315,000 from board members and their related parties in the 2014-15 fiscal year, which would account for the rest of the money transferred from the Library Foundation since the last audit, and then some.
When WWL-TV first exposed the payments in May 2015, tax records showed at least $863,000 in payments from the Library Foundation to the Jazz Orchestra through the end of 2013. It wasn’t until the new leadership of the Library Foundation conducted their own legal and accounting review that another $167,000 in payments were identified from the Mayfield- and Markham-led Library Foundation to the Mayfield- and Markham-led Jazz Orchestra.