Woodruff Arts Center leaders disclose $1.438 million fraud by ex-employee
By Maria Saporta
A former employee at the Woodruff Arts Center is thought to defrauded the cultural institution out of $1.438 million over the past five years through false invoices.
The leadership of WAC disclosed Tuesday morning that it has been conducting a internal investigation with outside forensic accounting experts over the past three weeks to determine the extent of the fraud.
The case has been turned over to the U.S. Attorney’s Office.
“It’s appalling that this has happened,” said Virginia Hepner, who has been CEO of the Woodruff Arts Center since July 1. “We take our stewardship and responsibility very seriously.”
Larry Gellerstedt III, chairman of the Woodruff Arts Center board and CEO of Cousins Properties, said that it was critical for the organization to be fully transparent on what had happened.
“There’s no way around the business of what’s happened (over the past five years),” Gellerstedt said. “This is a $100 million a year enterprise. It is a serious amount of money, but it’s not an amount of money that puts the institution or the arts at risk other than our credibility.”
According to Hepner, the former employee was a mid-level manager in the administrative area but was not in the finance area. She did not disclose the person’s name for legal reasons, but she said he had worked for the Center from 2004 to Oct. 31. After he left for unrelated reasons, the Center discovered some suspicious-looking invoices and immediately launched an external investigation.
Since then, the former employee has been interviewed and admitted to the fraudulent scheme, Hepner said.
Meanwhile, Hepner said she and the Center’s board are taking all the necessary steps to make sure this does not happen again.
“We are discovering where we fell down in these responsibilities,” Hepner said. “Everybody is accountable for this.”
Hepner said she has already instituted some changes within the organization and that she will continue to have external financial experts involved in reviewing the Center’s operations and its payables area.
“I’m satisfied we have the right people on it,” she said.
Gellerstedt said he was particularly pleased that Hepner was at the helm given her 25-year career in banking.
“We are very fortunate to have her skill set in general, but specifically in banking and corporate finance,” Gellerstedt said. Her acumen in this area is a skill set” that will help in the implementation of “new processes and procedures to try to prevent this from happening again.”
Gellerstedt went on to say that the Center’s shareholders are all the hundreds and thousands of people who give to the institution and are patrons of the arts.
“The Woodruff Arts Center is a community asset,” Gellerstedt said. “We are accountable and we want to be fully transparent to the public.”