Appendix B NEA FY2009 Performance Accountability Report.pdf

PERFORMANCE & ACCOUNTABILITY REPORT

FISCAL YEAR 2009

Submitted to the Congress, the Office of Management and Budget, the Department of the Treasury, and the Government Accountability Office

November 2009

BLANK PAGE

NATIONAL ENDOWMENT FOR THE ARTS

www.arts.gov

Performance & Accountability Report for Fiscal Year 2009

November 2009

TABLE OF CONTENTS

A Message from the Chairman

I. Management’s Discussion and Analysis

Mission and Organizational Structure

Arts Endowment Status

Performance Goal Highlights: Trends and Actions

Analysis of Financial Statements

Systems, Controls, and Legal Compliance

Future Effects of Existing Events and Conditions

Organization Chart

Summary of Programmatic Goals and Outcomes

II. Management Assurances

Overall Internal Control

Internal Control over Financial Reporting

Tables 1 and 2

III. Performance and Impact

Agency-Wide Program Accomplishments

Achieving Agency Performance Goals

Access to Artistic Excellence

Learning in the Arts for Children and Youth

Partnerships for the Arts

Leadership Initiatives

Research and Analysis

Performance Reports

IV. Financial Information

A Message from the Director of Finance

Financial Statements and Related Auditor’s Report

Management’s Comments on Auditor’s Report

V. Other Accompanying Information

Inspector General’s Summary of Top Management Challenges

Chairman’s Response to Inspector General’s Summary

V Fiscal Year2009 Performanceand Accountability ReportN A T I O N A T

E N D O W M E I . I T - A Messagefrom the Chairman TOR THE ARTS

I ampleasedto presentthe National Endowment for the Arts' Fiscal Year 2009 Performance and Accountability Reporr. This reportsummarizestheAgency'sperformanceand accomplishments financially,andoperationally duringthepastyear. * programmatically, -

Missio$and Onqanizational Overview

TheNational Endowment for the Arts is a publicagencydedicatedto supportingexcellencein the arts, both new and established; bringingthe arts to all Americans; andprovidingleadership in artseducation. Established by Congressin 1965 as an independentagency of theFederal government,theArts Endowment supportsartof indisputable artisticmeritand broad public reach in all 50States,theDistrictof Columbia, and special jurisdictions,reachingrural areas, innercities, metropolitan areas,andmilitary installations - bothhereat home.-andoverseas.

Weare committed to providingtheAmericanpeoplewith access to the best of their artistic legacyanddo so throughachievementof three clear and unambiguous goals:

excellence;preserveourculturalheritage;andprovideaccessto the arts for all Americans.

youth, -excellencein thearts- bothnewandestablished bringing the artsto all Americans, and providingleadershipin artseducation.

We carry out our activities primarilywith fundsappropriatedby theCongressto theArts Endowment,but also with fundsdonated from theprivatesector and transfers from other Federalagencies.Wepursueourgoals primarily throughgrantmaking,but also through our leadership,convening, researclq communicationand dissemination, andpartnershipactivities.

All of these are discussed elsewherein this report.

PerformanceGo4ls. Obiectives. andResults

This Performance andAccountabilityReportdemonstrates achieved by the the successes National Endowment for the Arts through the followingstrategies.

advancearts education.

andproductivity, Overthelastseveralyears,the National Endowment for theArts has reinforced its historic commitmentto excellence. A vast arrayof Agencyprogramsandinitiativesareproviding

Americanswith opportunities to experience thebest of the arts. These include:

Arts Journalism Institules; the Poetry OutLoud: National Recitation Contest;and Operation Homecoming: Writing the Wartime Experience; as well ascontinuedsupport for an ongoingShakespeareprogram,Shakespearefor a NewGeneration.

informationworkshops,held in communities throughouttheNation;an online newsletter;

and our user-friendly Website.

Departmentof Transportation (DOT)to providetheAgencywith its first Officeof FederalFinancial Management-compliant financialsystem;the introduction of new servicesmadepossibleby increasedapplicationof technology, such as the requirement that all grantapplicationsbe submitted electronically;and the creation of an Agency intranet,which includes tools such as meeting roomscheduling,Agency calendars, and electronicforms.

DatpBeli+biliw

The financial andperformancedatacontainedin this report are,to the bestof ourknowledge, completeandreliable. During thecourseof our FY 2009 audit, the auditorsidentifiedone materialweaknessrelatedto assignment of administrativecoststo program goals; the Agency concurredwith andimmediatelyactedonthe auditor's recommendation, whichresolvedthe weakness.In addition,one significant deficiency, related to accounting for advances to certain grantees,was identified andwill beresolvedby the middle of FY 2010.

e%w Rocco Landesman Chairman

November 16,2009

Fiscal Year 2009

Performance and Accountability Report

~ Management’s Discussion and Analysis ~

Mission and Organizational Structure

The National Endowment for the Arts is the Federal agency dedicated to supporting excellence in the arts – both new and established – bringing the arts to all Americans, and providing leadership in arts education. The Arts Endowment’s successes are achieved through the following strategies.

¾ Serving as a national voice and leader for excellence in the arts.

¾ Awarding thousands of competitive grants every year to encourage artistic excellence and advance arts education.

¾ Serving the American people by creating model programs of indisputable artistic merit and broad national reach.

¾ Ensuring complete geographic coverage of our programs.

¾ Developing and promoting effective models for arts education.

¾ Providing focused leadership and careful management to improve Agency performance and productivity.

The Arts Endowment supports art of indisputable merit and broad public reach in all 50 States, the District of Columbia, and special jurisdictions, reaching rural areas, inner cities, metropolitan areas, and military bases. We are committed to providing the American people with access to the best of their artistic legacy.

An independent Federal agency, the Arts Endowment was established by Congress in 1965 and is lead by a Chairman – appointed by the President and confirmed by the United States Senate – and advised by the National Council on the Arts. Fourteen private citizens are appointed by the President and confirmed by the Senate; six ex officio members are Members of Congress appointed by Senate and House leadership.

The Arts Endowment is structured around several major programmatic and administrative Divisions headed by three Deputy Chairmen, a Chief Information Officer (CIO), and several other office heads – all of whom report to a Senior Deputy Chairman, the Agency’s Chief Operating Officer. The Senior Deputy Chairman reports to the Chairman, who also has a support staff and several office directors reporting directly to him. The major program Division, Grants and Awards, organized primarily around artistic disciplines, is chiefly responsible for handling the review of grant applications. An organizational chart can be found at the end of this section. In FY 2009, the Agency operated with a staffing level of approximately 163 full time equivalents.

National Endowment for the Arts – FY 2009 Performance & Accountability Report

Management’s Discussion and Analysis

Arts Endowment Status

Critical to the Agency’s success is the attention focused on leadership and careful management. We believe that the Arts Endowment has been quite successful in this effort;

the following selected examples provide evidence.

1. Improved Grants Management

Interagency Efforts. The Arts Endowment continues to participate in interagency work groups and specially formed teams to assist with government-wide streamlining efforts.

The Agency’s Grants & Contracts Officer serves on the multi-agency Grants Policy Committee (GPC), which is the governing board for all Federal grants streamlining activities (formerly under P.L. 106-107) and the CIO serves on the multi-agency Grants Executive Board, which focuses on Grants.gov and the goals of the Grants Management Line of Business initiative. The G&C Officer has been participating in interagency efforts to establish a Grants management series, competencies, and training for Federal grants management personnel. She and the Senior Grants Specialist attended focus group sessions and have helped develop and review material for OPM and the GPC.

Recovery Act. The Arts Endowment worked with other agencies to respond to issues related to the Recovery Act. For example, we were a sounding board for the review and discussion of policies, Section 1512 reporting requirements, and State cost allocation recovery. The Recovery Act provided numerous opportunities and challenges for us; for example:

• A new review process was implemented for the Recovery Act, and it has suggested new ways of improving our existing review process; additional evaluation will take place during FY 2010

• Specific tools were developed to review data from Recovery act grantees against data in our system; parameters were developed to highlight outliers which helped us hone in on immediate data issues and work with grantees to clarify their reporting.

Other Internal Efforts. We continue to simplify our application requirements. Where possible, we have replaced hard copy application support items with electronic versions. Mirroring government-wide efforts, we have made many of our Agency-specific application forms "generic" so that they can be used across funding opportunities; we implement the use of new standard Federal forms as they are adopted;

and we developed the “File Viewer” tool, which houses all electronic grant application submissions, allowing access by multiple Agency staff and reducing the need to distribute hard files. Additional tools have been created by the Agency’s Information & Technology Management (ITM) Division that help improve grants management:

Grants Management System (GMS) Utilities – has several functions, including allowing discipline staff to:

• Upload spreadsheet information (following a standard template) which imports hundreds of data elements for each individual GMS record.

Previously, NEA discipline specialists had to go into every record and undertake individual data entry for numerous fields.

• Request grant numbers. This program ensures that grant numbers are generated more efficiently.

• Run a variety of reports, and produce labels, rejection letters, and cover letters, among other things. Previously, each of these required requests to ITM and a single person had to process every request. Now discipline staff for every program area can take care of these themselves.

GMS Address Update Program – allows Agency Grants staff to confirm Congressional data concurrently with updating the grants constituent database.

Previously, two separate programs were required, or the Grants staff had to request updates from ITM.

GMS Duplicate Record Removal Program – cleans up duplicate records for the same constituent. The user can select the most relevant one, merge the two records to include the correct information, and delete the duplicate as appropriate. This saves at least 15 minutes of work for each record.

Improved Grantee Compliance. Our efforts to help grantees improve their accountability and understanding of Federal grants include:

¾ The Arts Endowment’s OIG has increased its financial management and compliance evaluations and limited scope audits of grantees by focusing on metropolitan areas where they can coordinate visits with several grantees during a fixed period of time. During FY 2009, 13 evaluations and audits in six States were conducted.

¾ The Grants & Contracts Office continues to provide one-on-one assistance in all areas of grants compliance. In FY 2009, an additional level of effort was required to meet and manage the requirements of the Recovery Act. A new, part-time grants specialist was hired to help guide the implementation and monitoring of the Recovery Act program’s requirements. In addition, a staff person was reassigned to the Grants & Contracts office in July, 2009, and four other staff persons were delegated to work on the Recovery Act program.

¾ The NEA Web site helps applicants become more self-sufficient regarding Federal grants management through resources such as Grant-At-A-Glance, where grantees can access information about their current and past grants to help them manage their awards. A downloadable and fillable Section 504 self-assessment workbook is available on our Web site. This Program Evaluation Workbook is designed to assist grant recipients in evaluating the current state of accessibility of their programs and activities to visitors and employees with disabilities. The workbook is intended to assist organizations in their efforts to:

(a) comply with the Endowment's regulations implementing Section 504 of the Rehabilitation Act of 1973, as amended, including the preparation of a self-evaluation of all programs, activities, policies and practices to determine areas of noncompliance, and (b) better understand the relationship between 504 and the Americans with Disabilities Act (ADA).

2. Effective Outreach

Grants Workshops. There is a great demand for funding from the Arts Endowment and, as a result, the grant process is extremely competitive. The Agency is committed to broad public and geographic outreach. By offering grants workshops, often hosted by Members of Congress, the Arts Endowment provides public service and important information to small and mid-size nonprofit organizations throughout the country. By providing general technical assistance to potential applicants and grantees at community, State, and national workshops and conferences, the Arts Endowment ensures that underserved areas have knowledge of funding opportunities available to them. Since the inception of the program in 2002, more than 6,000 people have attended 80-some workshops conducted in 25 States and Puerto Rico.

Leadership Initiatives. Planning for and effective delivery of the Agency’s leadership initiatives requires extensive interaction with arts organizations, school systems, and underserved communities in all 50 States.

International Efforts. The Chairman of the Arts Endowment is called upon by the U.S.

Department of State, Bureau of Educational and Cultural Affairs, to represent the U.S.

with cultural officials of other countries.

3. Strategic Management of Human Capital

We have established human capital (HC) strategies that enable us to carry out the Agency’s Strategic Plan. We manage our HC programs consistent with applicable internal controls and merit-based principles – confirmed by the 2004-2005 Human Resource Management Delegated Examining oversight review conducted by the Office of Personnel Management (OPM). And we build our budgets and programs consistent with our available HC resources.

We conduct assessments on an ongoing basis to ensure that our staffing level and competency mix are sufficient to operate effectively and achieve our mission. During this past year, as a result of this assessment process, we made the following changes:

¾ Placed the Office of Research and Analysis and the Office of General Counsel under the direction of the Senior Deputy Chairman, ¾ Eliminated the Development Office, while maintaining the function at a reduced level of activity.

We sustain a high-performing workforce as evidenced by our capacity to manage our demanding application and grant workloads without commensurate increases in resources. Training is critical to this effort, particularly as employees retire and new staff arrive; we make available annual leadership training to improve and enhance performance, and to serve as a key element of succession planning1.

4. Expanded E-Gov

The National Endowment for the Arts has been an active partner in Grants.gov from its inception. We are pleased to report that we post electronic application packages for 100% of our discretionary and mandatory funding opportunities. FY 2009 was the second year for which electronic application via Grants.gov was required of all applicants, both organizations and individuals.

The National Endowment for the Arts worked with applicants to heighten awareness and acceptance of Grants.gov; encouraged them to register with Grants.gov; and assisted their transition to using Grants.gov through customized instructions, workshops, and technical assistance.

The Agency also continues working internally to revise business practices to accommodate electronic applications. NEA staff can now access, review, and print electronic application materials via their desktop PCs. In an ongoing pilot effort, we are making electronic application materials available to some NEA panelists so that they have the option of using “portable” versions (instead of bulky notebooks) that can be easily taken anywhere – while on travel, for example – to study in advance of panel meetings. In addition, we have begun a comprehensive review of alternatives for increasing the use of technology in our application review process.

In line with the government-wide Grants Management Line of Business (GMLoB) initiative, we received approval from OMB to address our need for a new grants management system to replace our decades-old and severely limited system with one developed and maintained by the National Endowment for the Humanities (NEH). The preliminary work began in FY 2008, and we expect to begin using the NEH system by the end of 2010.

We are also working to ensure compliance with other applicable Administration initiatives such as those required by the Federal Funding Accountability and

1 The average years of Federal service for Agency staff is currently 14.5. At the end of FY 2009, 21.4% of Agency staff were eligible for optional retirement.

Transparency Act, which calls for a publicly-accessible and searchable database of all Federal grants and contracts.

5. Improved Financial Management

With the conversion of our legacy financial system to the Oracle-based fully-compliant financial system referenced above, we continue to experience significant improvements in reliability and timeliness of financial information.

6. Integration of Budget and Performance

We prepare our budget requests as performance budgets, with performance data integrated throughout. This integration ensures that Agency goals, programs, and budget categories are aligned with and mirror one another. For example, Agency general goals and annual performance goals are one and the same. We have developed program outcomes and indicators to assess achievements in relation to plans. Indicators are generally statistical in nature. We also are using indicators to determine areas of adjustment or emphasis in our budget request, where appropriate.

Performance Goal Highlights: Trends and Actions

The National Endowment for the Arts is committed to serving the American people through three clear and unambiguous goals:

¾ Access to Artistic Excellence – by supporting projects that encourage and support artistic excellence, preserve our cultural heritage, and provide access to the arts for all Americans.

¾ Learning in the Arts – by supporting projects that advance arts education for children and youth.

¾ Partnerships for the Arts – by developing and maintaining partnerships that support excellence in the arts – both new and established – bring the arts to all Americans, and provide leadership in arts education.

For each of the above performance goals, we have identified several outcomes that we intend to achieve, and we have established performance indicators for each outcome – all of which tie directly back to our mission statement. Since FY 2009 has just ended, we cannot yet report on final accomplishments related to our grantmaking during that year. As we regularly explain in our annual performance reports, actual performance data from each fiscal year is not available until final reports on funded projects have been received. We have established a threshold of 90 percent of such reports as a level that allows us to make reliable assessments of actual performance. This threshold is usually reached within approximately two years after the end of the fiscal year in which the awards were made (e.g., by the end of FY 2009, we had received 93% of the FY 2007 final reports). These final reports include statistical data tied to our performance indicators that establish the degree to which we are accomplishing our objectives.

In each year’s performance plan, we provide estimates of what will be accomplished as a result of our funding. For example, with FY 2009 funding, we estimate that 40-45 million individuals will directly benefit from projects whose primary purpose is to make art widely available to the public. Other estimates of Agency-wide accomplishments for the more than 2,400 grants and cooperative agreements awarded that year (excluding almost 700 grants awarded through the American Recovery and Reinvestment Act of 2009) include:

¾ More than 100 million individuals benefiting from Agency programs (exclusive of television and radio broadcast audiences), including 10 million children and youth.

¾ A combined audience of hundreds of millions receiving opportunities to benefit from Agency programs that support national and regional broadcast performances on radio and television, both single and recurring programs.

¾ 100 percent of Congressional districts receiving at least one direct grant.

¾ Nearly 4,000 communities participating in Agency-sponsored, discretionary projects – many benefiting from projects such as touring and outreach that take place in communities beyond that of the grant recipient.

¾ More than 2,000 communities participating in projects funded by a combination of Federal funds and State Arts Agency and Regional Arts Organization funds.

¾ 18,000 community organizations partnering with grantees on Arts Endowment-supported projects.

¾ Arts Endowment awards generating $600 million or more in matching support; in our direct grant-making categories alone, this translates into a ratio of matching to Federal funds that far exceeds the required one-to-one match.

¾ Arts Endowment awards helping to make possible 40,000 concerts, readings, and performances; 5,000 exhibitions (including visual and media arts); and 8,000 artist residencies in schools and other locations.

¾ Internationally, 70 U.S. professional arts organizations and 350 artists providing performances, exhibits, and other arts activities in 30 countries.

The grantees’ final reports provide the information that allows us to report what we have actually accomplished across the country with our programmatic activities. We have found the actual results to be quite consistent with our projections, and periodic reviews of the grantee reporting process have confirmed the accuracy and relevance of our performance data. Thus, we believe that the performance data we receive (which are reported in our annual performance reports) indicate that our goals for these programs are being met, and the critiques we receive from the panelists who convene to review grant applications and discuss program policies confirm that our programs are effective.

A significant factor in our projected and actual performance is that, beyond establishing eligibility criteria, we have no control over how many applications we receive each year, or in what category. Nonetheless, our performance projections over the past several years have proved to be consistent with actual performance as reported by our grantees, providing us with confidence that our projections are realistic and our programs effective.

We can also confidently assert the efficiency of our programs as we have continued to do more with modest increases in our resources.

Analysis of Financial Statements

Underlying the Agency’s programmatic achievements is our commitment to organizational excellence and sound financial management. During this year’s audit, one material weakness was identified (the first since FY 2003), concerning the need to assign administrative costs to program goals. We concurred with the auditors’ recommendation and immediately developed a cost accounting methodology to address the issue, resulting in an immediate resolution of the weakness. The auditors also identified one significant deficiency related to the need to characterize certain grant disbursements as advances rather than reimbursements. Again, we responded immediately and committed to a course of action that will result in complete resolution of the deficiency by the middle of FY 2010.

The Arts Endowment’s principal financial statements have been prepared to report the financial position and results of operations of the Agency, pursuant to the requirements of 31 U.S.C. 3515 (b). While the statements have been prepared from the books and records of the Arts Endowment in accordance with generally accepted accounting principles (GAAP) for Federal entities and the formats prescribed by the Office of Management and Budget, the statements are in addition to the financial reports used to monitor and control budgetary resources, which are prepared from the same books and records. These statements should be read with the realization that they are for a component of the U.S.

Government, a sovereign entity.

The Arts Endowment receives an annual appropriation of “no-year” funds from Congress, and has been granted authority to receive donations and invest in interest-bearing accounts.

Accounts are maintained for restricted as well as unrestricted funding, and the same guidelines are used to account for both appropriated and non-appropriated funds. The Arts Endowment’s property, plant, and equipment are recorded at cost and are depreciated according to a written asset capitalization policy.

Systems, Controls, and Legal Compliance

The National Endowment for the Arts is cognizant of the importance of establishing and maintaining adequate controls over its programs and administrative functions.

Management continues to evaluate and modify existing controls – and establish new ones as appropriate – to ensure that we are able to provide reasonable assurance that we are accountable for our resources. We also recognize the importance of using technology to enhance effectiveness and efficiency, as well as to ensure an adequate degree of internal control and compliance with applicable laws and regulations.

Future Effects of Existing Events and Conditions

In previous years, we reported on the challenges presented by our reliance on an outdated grants management system (GMS). During FY 2008 we took decisive action to address this. With the approval of OMB, we began the process of establishing a strategic partnership with the National Endowment for the Humanities, through which we will migrate our outdated GMS to their GMS – a modern, flexible grants management system developed and maintained by the NEH. We expect to see major improvements in our internal grants management and panel management processes as a result of this partnership;

our grant applicants, grantees, and panelists will also find that doing business with the NEA will be easier and more flexible. Preliminary work is well underway, and we expect to begin using the NEH GMS by the end of 2010.

National Endowment for the Arts Approved October 2009 Organization Chart

Chairman

Gov ernment Affairs Inspector General Public Affairs

General Counsel Guidelines and Panel OperationsCiv il Rights/EEO Research & Analysis

Senior Deputy Chairman

Chief Information Officer Deputy Chairman Grants & Aw ards

Deputy Chairman Management & Budget

Deputy Chairman States, Regions and Local Arts Agencies

Access to Artistic Ex cellence

Arts Education

Administrativ e Services

Budget

Finance

Grants & Contracts

Human Resources

State and Regional

Challenge America/Local Arts Agencies

AccessAbility

NEA Strategic Plan FY 2006-2011 Summary of Programmatic Goals and Outcomes

Goals Access to

Artistic Excellence Learning in the Arts Partnerships for the Arts

To encourage and support artistic excellence; preserve our cultural heritage; and provide access to the arts for all Americans.

To advance arts education for children and youth.

To develop and maintain partnerships that support excellence in the arts – both new and established – bring the arts to all Americans, and provide leadership in arts education.

Outcomes *

1. Artists and arts organizations have opportunities to create, interpret, present, and perform artistic work.

1. Children and youth demonstrate skills, knowledge, and/or understanding of the arts, consistent with national, State, or local arts education standards.

1. Activities supported through partnerships with state arts agencies and regional arts organizations make the arts and arts education widely available.

2. Audiences throughout the 2. Teachers, artists, and others 2. Activities supported through Nation have opportunities to demonstrate knowledge and skills partnerships with other public experience a wide range of art necessary to engage children and and private sector organizations forms and activities. youth in arts learning, consistent with national, State, or local arts education standards.

make the arts and arts education widely available.

3. The arts contribute to the strengthening of communities.

3. National, State, and local entities demonstrate a commitment to arts learning for children and youth, consistent with national, State, or local arts education standards.

4. Artistic works and cultural traditions are preserved.

5. Organizations enhance their ability to realize their artistic and public service goals.

* The outcomes refer to the intended results of Agency-funded grant projects and activities with arts organizations, arts service organizations, educational institutions, units of government, individuals, and other public and private sector organizations involved in arts activities.

It/ Fiscal Year 2009 Performanceand Accoantability RepoftN A T I O N A L

E ND O W M E N T

FOR THE ARTS

- ManagementAssurances

Overall Internal Control The National Endowment for the Arts' management is responsible for establishingand maintainingeffective internal controlandfinancial management systemsthatmeetthe objectivesof the FederalManagers'FinancialIntegrity Act (FMFIA). The Arts Endowmentconductedits assessment of internalcontrolover the of the effectiveness effectivenessandefficiencyof operations and compliance with applicable laws and regulationsin accordancewith OMB Circular A-l23,Mcnwgement's Responsibilityfor InternalControl. Basedon the results of this evaluation, the Arts Endowment can providereasonableassurancethatits internal controlover the effectivenessand efficiency of operationsand compliance with applicablelawsandregulationsasof September 30, 2009wasoperating effectively andno material weaknesseswerefound in the design or operation of the internal controls.

Internal .ControloverFinancial Reoortine TheNational Endowment for theArts conductedits assessment ofof the effectiveness internalcontroloverfinancial reporting, which includes safeguardingof assets and compliancewith applicable laws andregulations,in accordance withOMB CircularsA 123,Management's Reryonsibilityfor Internal Control, andA-136, Financial Reporting Requiremenfs.Basedon the resultsof thisevaluation and that of our independent auditors,onematerialweaknessand one significant defrciency were identified in the Agency's internal control over financial reporting as of September 30, 2009. The former was immediately resolved;the latter will be by the middleof FY 2010. (SeeTables1 and 2 on the following page).Otherthantheseexceptions,theAgency'sinternalcontrols wereoperating effectively, andno other material weaknesses werefoundin the design or operation of the internal controls over financial reporting.

Table 1.

of FinancialStatement Audit

AuditOpinion Unqualified Restatementof FY 2008Statementof Net CostData I Yes

MaterialWealnesses Beginning New Resolved Consolidated Ending Balance Balance

CostAccountingon Statement of Net Cost g g Total Materi al l(e akne sse s 0 I I 0 0

Table 2.

of {.ssurances

Effectivenessof Intemal Control over X'inancialRenortins G'MX'IA t 2) Statement of Assurance Unqualified

Material Weaknesses Beginning New Resolved Consolidated Reassessed Ending Balance Balance

Cost Accounting on Statement of Net Cost g V Total Material Wealcnesses 0 t I 0 0 0 f,ffectivenessof Internal Control over Operations (FMX'IA g 2) Statement of Assurance Unqualified

MaterialWeaknesses Begiming New Resolved Consolidated Reassessed Ending Balance Balance

N/A Total Materi al lile akne sse s 0 0 0 0 0 0

Conformance with financial managementsystem rcquirements GMFIA $ 4) Statement of Assurance Systems conform

Non-Conformances Beginning New Resolved Consolidated Reassessed Ending Balance Balance

N/A To ta I non-conform an ce s 0 0 0 0 0 0

Compliance with X'ederal Financial Manasement Imorovement Act fi'X'MIA) Agency Auditor

Overall Substantial Compliance Yes I Yes

1. SvstemRequirements Yes

2. AccountineStandards Yes

3. USSGL at TransactionLevel Yes

Chairman November16.20A9 t6

Fiscal Year 2009

Performance and Accountability Report

~ Performance and Impact ~

In this section, we provide documentation of the impact of the Agency’s programs, projects, initiatives, and activities. We present this information in five groupings.

Agency-Wide Program Accomplishments – Cumulative information on the impact of Agency activities, projects, and initiatives.

Achieving Agency Performance Goals – Information on the impact of Agency activities, projects, and initiatives by Agency goal, including specific project examples.

Leadership Initiatives – Information on the impact of the Agency’s leadership initiatives, projects that cut across all Agency goals.

Research and Analysis – Summary information on Agency research activities intended to inform the American public, opinion makers, and the arts field.

GPRA Performance Reports – Quantitative reports for fiscal years 2006 – 2009.

Performance and Impact

Agency-Wide Program Accomplishments

The Agency’s funding of programs, projects, and initiatives resulted in the development and delivery of broad services to the American public. Based on activity to date (excluding awards made through the American Recovery and Reinvestment Act of 2009) and information from Agency awardees for FY 2009, we can report and anticipate the following:

¾ Approximately 2,400 awards were made in communities in all 50 States and six special jurisdictions.

¾ More than 100 million individuals will benefit from Agency programs (exclusive of television and radio broadcast audiences) including 10 million children and youth.

¾ A combined audience of hundreds of millions will benefit from Agency programs that support national and regional broadcast performances on radio and television, both single and recurring programs.

¾ 100 percent of Congressional districts received at least one direct grant.

¾ Nearly 4,000 communities will participate in Agency-sponsored, discretionary projects – many benefiting from projects such as touring and outreach that take place in communities beyond that of the grant recipient.

¾ More than 2,000 communities will participate in projects funded by a combination of Federal funds and State Arts Agency and Regional Arts Organization funds.

¾ 18,000 community organizations will partner with grantees on Arts Endowment-supported projects.

¾ Arts Endowment awards will generate $600 million or more in matching support; in our direct grant-making categories alone, this translates into a ratio of matching to Federal funds of greater than 10:1, far exceeding the required match.

¾ Arts Endowment awards will help make possible nearly 40,000 concerts, readings, and performances; 5,000 exhibitions (including visual and media arts); and 8,000 artist residencies in schools and other locations.

¾ Internationally, 70 U.S. professional arts organizations and 350 artists will provide performances, exhibits, and other arts activities in 30 countries.

Achieving Agency Performance Goals

The achievement of the Agency’s programmatic accomplishments occurs through three programmatic goals: Access to Artistic Excellence, Learning in the Arts, and Partnerships through the Arts, as follows.

Access to Artistic Excellence

Through Access to Artistic Excellence, the Arts Endowment encourages and supports artistic excellence, preserves our cultural heritage, and provides access to the arts for all Americans. Nearly 83% of the Agency’s FY 2009 Direct Endowment Grant funds were devoted to this effort, reflecting the high priority afforded to ensuring access to the arts for all Americans. The following table highlights accomplishments made possible with this funding (excluding funds awarded through the American Recovery and Reinvestment Act of 2009).

Access to Artistic Excellence Selected Performance Results – FY 2006-2009

Fiscal Year

Total Non-

Broadcast Audience

Children/ Youth

Concerts/ Readings/

Performances Exhibitions Artist

Residencies

Current 73 m 12 m 51 k 4.3 k 5.7 k

Current 60 m 5.8 m 37 k 4.8 k 6.4 k

Current 88 m 7.6 m 33.8 k 2.7 k 5.6 k

Projected 95 m 8.8 m 35.7 k 4.4 k 6 k

[Numbers are rounded. k=thousand; m=million.]

The cumulative accomplishments reflected in this table result from the 2,000 or more direct grants and cooperative agreements awarded under this goal each year. Examples of specific programs, awards, and their direct impact are presented below according to:

Grants for Arts Projects, Arts on Radio and Television, Save America’s Treasures, International Activities, and innovative Leadership Initiatives.

Grants for Arts Projects: Access to Artistic Excellence examples from FY 2009:

The Great Explorations Children’s Museum in St. Petersburg, Florida was awarded a $10,000 consortium grant to support the First Impressions Community Outreach program, in collaboration with Very Special Arts of Florida. The project provides free arts programming for the general public as well as Pinellas County elementary school students. Hands-on arts education and juried art exhibitions are presented in the First Impressions Gallery; rotating exhibitions feature work by professional artists, artists with disabilities, and schoolchildren. An extension of the

First Impressions Gallery, the Art Mobile, will visit approximately 80 elementary schools reaching more than 33,000 children. Artwork selection and artistic design of the Art Mobile interior and outer façade will be assisted by the First Impressions advisory board. Very Special Arts will ensure inclusive programming and accessible displays in both the gallery and the Art Mobile.

Pittsburgh Symphony Society, in Pennsylvania, was awarded a grant of $35,000 to support the Composer of the Year program, an artist residency with composer John Adams. The orchestra, with guest violinist Leila Josefowicz, and Adams conducting, will perform the Pittsburgh premiere of his work for electric violin and orchestra, The Dharma at Big Sur. The programming also will include excerpts from the composer’s operas Nixon in China and Doctor Atomic. Adams will host a reading session and symposium for young composers, as well as visit several local universities. The project is expected to serve approximately 10,000 audience members and 1,500 youth.

Milwaukee Repertory Theater, Inc., in Wisconsin, was awarded a grant of $30,000 to support a production of Anton Chekhov’s The Cherry Orchard. The project will feature the theater’s resident acting company and will be directed by Ben Barnes, former artistic director of Ireland’s Abbey Theatre. Set in 1904 on the edge of the Russian Revolution, Chekhov’s final play is a bittersweet and haunting comedy about a rapidly changing world and way of life on the brink of destruction. The production will be accompanied by study guides for students and school groups, as well as “Rep in Depth” free audience discussions which will offer dramaturgical information on the show. The project is expected to reach an audience of more than 17,000.

In addition to activities noted above, through our Arts on Radio and Television funding area the Arts Endowment supports nationally broadcast performances of quality arts programs on radio and television that reach, through both single and recurring programs, a combined audience in the hundreds of millions annually. Here is one example of recent awards:

Minnesota Public Radio, Inc. (aka American Public Media), in St. Paul, was awarded a $200,000 grant to support the production, acquisition, and national radio broadcast of classical music programming. In 2009-10, programs such as Performance Today, SymphonyCast, Pipedreams, and St. Paul Sunday (to be renamed), will reach as many as four million listeners each week. Hosted by Fred Child, Performance Today is a weekday, two-hour classical music series presenting performances from around the world, taped live and in concert and blended with commentary, interviews, profiles, and music news. It reaches as many as one million listeners each week on 246 public radio stations. SymphonyCast, a weekly two-hour program, brings audiences full performances by American and international orchestras and is carried by 120 stations. Pipedreams, hosted and produced by Michael Barone, is a weekly 90-minute program devoted to music for the organ.

Now in its 25th season, it is the only radio series of its kind with significant national distribution (153 stations). St. Paul Sunday features musicians and composers who are brought into the recording studio to perform and discuss their works exclusively for the listening audience. During the 2009-10 season, American Public Media will hire a new host and rename the program. Previously hosted by conductor and composer Bill McGlaughlin, the show presents music ranging from the standard classical repertoire to jazz, and is distributed to 179 stations reaching 313,000 listeners each week. The project will provide more than 700 hours of classical music programming.

Save America’s Treasures grants support preservation and/or conservation of nationally significant intellectual and cultural artifacts and historic structures and sites. Since the start of the program in 1999, the Arts Endowment has been responsible for the review of applications requesting funds for the conservation of nationally significant art works and collections. Save America's Treasures funds are provided to the Arts Endowment from the National Park Service and matched with at least an equal amount of non-Federal funds. The following example highlights the FY 2009 awards:

Miami – Dade County, FL/Vizcaya Museum and Gardens was awarded $300,000 to support conservation of the Vizcaya Museum and Gardens Outdoor Sculpture Collection. A National Historic Landmark estate built between 1914 and 1917, Vizcaya is one of the most complete remaining examples from a period of architecture known as the American Renaissance. The outdoor sculpture collection, an integral part of the estate’s historic importance, features nearly 300 statues, urns, and fountains. The pieces range from a second-century Roman altar to 20th century pieces commissioned for the site. Save America’s Treasures funding will support conservation treatment on pieces damaged by the salt air; stabilization of pieces that have become compromised by the settling earth; and relocation of objects most in jeopardy of damage from storms.

The Arts Endowment supports International Activities to promote the presentation of American arts and artists at international venues and to provide short-term residencies of foreign artists in the United States. In addition, the Arts Endowment has been active in supporting literary exchange programs that provide the work of U.S. writers to foreign audiences and provide opportunities for U.S. readers to experience the work of foreign writers. The Chairman of the National Endowment for the Arts has served on the U.S.

National Commission for the United Nations Educational, Scientific and Cultural Organization (UNESCO) and has served as an expert on American culture at UNESCO at the invitation of the U.S. Ambassador.

Examples of the Agency’s international projects include:

• USArtists International, in partnership with Mid Atlantic Arts Foundation, supports performances of American dance, theater, and music ensembles at international festivals abroad. The new addition of the theater category and expansion to festivals worldwide was made possible through generous support from the Andrew W. Mellon Foundation. In FY 2009, 846 American artists performed in 40 countries over six continents offering audiences abroad a dynamic and diverse representation of the non-profit cultural sector in the United States. These performances provide a balance to the presentations of U.S. popular culture that are widely accessible internationally. In addition, the international festival setting allows artists to interact with colleagues from many nations and is valuable for the creative and professional development of American artists.

• AFI Project:20/20, in partnership with the National Endowment for the Humanities, the Institute of Museum and Library Services, the President’s Committee on the Arts and the Humanities, and the American Film Institute, is an initiative designed to enhance cultural exchange, understanding, and collaboration through the exhibition of films by American and foreign filmmakers at venues in the U.S. and abroad. From 2006-09, 32 filmmakers representing 15 countries have visited 18 countries and 18 U.S. cities. After the screening of U.S.

filmmaker Doug Pray’s film Big Rig in Lithuania in 2008, Mohammed Naqvi, a Pakistani/Canadian filmmaker said, “I now more than ever see the importance of 20/20. It truly is a cultural exchange – and it truly does bring cultural misconceptions about each of us to the forefront and gives us an opportunity to address them.”

Learning in the Arts for Children and Youth

Through Learning in the Arts, the Agency supports projects that help children and youth acquire knowledge, skills, and understanding of the arts in school-based and community-based settings. The following table highlights accomplishments made possible through this funding (excluding funds awarded through the American Recovery and Reinvestment Act of 2009).

Learning in the Arts Selected Performance Results – FY 2006-2009

Fiscal Year Children/

Youth

Concerts/ Readings/

Performances Artist

Residencies

Current .4 m 2 k 3 k

Current .6 m 3 k 3 k

Current .7 m 5 k 3.1 k

Projected .6 m 5 k 2 k

[Numbers are rounded. k=thousand; m=million.]

The accomplishments listed in this table result from the more than 200 direct grants and cooperative agreements awarded under the Learning in the Arts goal each year.

Examples of specific programs, grants, and their direct impact are presented below according to Grants for Arts Projects and innovative Leadership Initiatives.

Grants for Arts Projects: Learning in the Arts examples from FY 2009:

Shakespeare & Company, Inc., in Lenox, Massachusetts, was awarded a $40,000 grant to support Shakespeare in Action, a theater arts residency program. The series of classroom and after-school sessions will focus on a language-based exploration of a Shakespearean play through master classes, rehearsals, text analysis, and student performances. During the nine-week program, students will work with a group of professionally trained artists to learn both the technical and dramatic aspects of theatrical production. Students will study aspects of the theater such as stage combat, Elizabethan dance, set design, and costuming. The program also will provide professional development opportunities for classroom teachers. The residency will culminate in a four-day performance festival at the company’s theater. More than 500 students attending 10 underserved high schools in Massachusetts and New York are expected to participate.

The Shreveport Regional Arts Council in Louisiana was awarded a $30,000 grant to support Arts in Education Residency: From Tragedy to Triumph, The Great Depression and New Deal in North Louisiana. The 11-week residency will engage middle school students studying Louisiana history to experience the creative process from its roots in research to conceptual development and the creation of a new art work. Through images, words, stories, dance, film, music and theatre, students will research and retell the stories of 105 North Louisiana Elders who witnessed the Great Depression/New Deal Era eighty years ago. Four nationally recognized artists will work with students to perform the new work in a variety of venues. The project has the potential to reach approximately 10,000 eighth-graders in 21 parishes.

The Mosaic Youth Theater of Detroit was awarded a grant of $80,000 to support the Youth Ensemble, Intermediate Training Program, and educational outreach programs. Professional actors and teaching artists will provide students with intensive acting, vocal, and technical theater training leading to the creation and performance of an original musical. During a nine-month period, youth will develop their acting, music, and writing skills, followed by pre- and post-test assessment of their learning. Matinees and evening performances of original student productions will be held at the Detroit Institute of Arts and other Detroit venues. The Mosaic Singers will perform their annual Magnificat at the Max concert at the Max M. Fisher Center in Detroit. These performances will be followed by a touring show of short theater and music productions at approximately 15 universities nationwide. As many as 165 youth, ages 12 to 18, are expected to participate in this free program.

Partnerships for the Arts

Through Partnerships for the Arts, the Arts Endowment joins with a substantial network of public, private, and nonprofit agencies and organizations for the purpose of developing and maintaining partnerships that support excellence in the arts, both new and established; bring the arts to all Americans; and provide…