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Office of the Auditor General of Ontario Value-for-Money Audit Museums and Galleries: Art Gallery of Ontario Royal Ontario Museum McMichael Canadian Art Collection December 2020 Table of Contents Museums and Galleries 3 Chapter 1 Ministry of Heritage, Sport, Tourism and Culture Industries 6 Chapter 2 Art Gallery of Ontario 17 Chapter 3 Royal Ontario Museum 54 Chapter 4 McMichael Canadian Art Collection 83 ii Ministry of Heritage, Sport, Tourism and Culture Industries Museums and Galleries Overall, we found that all three institutions did 1.0 Overall Summary a good job of safely storing the artworks, objects and artefacts in their collections in line with best practices. All three had sufficient environmental The Ministry of Heritage, Sport, Tourism and controls and kept their storage vaults at the appro- Culture Industries (Ministry) provides funding to priate temperature and humidity levels. All three museums and art galleries to support the culture also offered a variety of education programs to the sector and the Ministry’s overall objective to public related to their collections. improve the quality of life of Ontarians, and pro- However, we found that none of the three mote economic growth. institutions had policies in place to conduct regular In 2019/20, the Ministry provided a total of inventory checks to verify the existence of the $52 million in funding to the Art Gallery of Ontario artworks, objects and artefacts in their collec- (AGO), the Royal Ontario Museum (ROM) and the tions, and none of them routinely estimated the McMichael Canadian Art Collection (McMichael). financial value of their collections to assist them to Each of these organizations is governed by its own evaluate whether they maintained sufficient insur- legislation that establishes its mandated activities. ance coverage. In addition, they could not always Consistent with the traditional role of museums demonstrate that the acquisitions they made were and galleries, these activities include collecting needed to meet their collection objectives. objects and artwork, displaying them, providing We also found that the AGO alone accounted for education programs related to their collections, and $101 million, or 22%, of all income tax certificates generating public interest in their collections and issued by the Canadian Cultural Property Export exhibitions. In 2019/20, these three institutions Review Board (CCPERB) for donations made to had more than 2 million visitors. all Canadian institutions over the last five years. The AGO, ROM and McMichael are accountable Donations certified by CCPERB provide donors with to the Ministry—ROM and McMichael are board- additional tax advantages compared to those that governed provincial agencies, while the AGO is a are not certified—for example, the increase in value transfer payment recipient. The Ministry’s role is of a donated item relative to its purchase price is to inform them of its broad expectations for their normally taxable, but it is not taxable if it is certi- performance, and to oversee that they fulfill their fied by CCPERB. legislative mandates and comply with applicable Despite the cost to taxpayers of the AGO’s acqui- government policies, direction and agreements. sitions, we found that the AGO had not displayed 3 4 the majority of the donated artworks it has received • Chapter 1: Ministry of Heritage, Sport, in the last five years that were certified by CCPERB. Tourism and Culture Industries, contains As well, the AGO has not experienced a significant four recommendations and 8 action items; increase in its attendance. Instead, the AGO’s • Chapter 2: Art Gallery of Ontario, contains attendance has fluctuated from year to year, primar- 19 recommendations and 50 action items; ily based on the strength or weakness of its tempor- • Chapter 3: Royal Ontario Museum, con- ary exhibitions, with overall attendance at the AGO tains 16 recommendations and 31 action decreasing in each of the last two years. items; and While management at the museum and the two • Chapter 4: McMichael Canadian Art Collec- galleries indicated that it is important to have suc- tion, contains 19 recommendations and 34 cessful exhibitions in order to draw attention and action items. attendance to their institutions, we found that none of them had an effective process to demonstrate that they select exhibitions that are most likely to Overall Conclusion be successful. In addition, all three organizations The province appoints Board members and pro- did not assess the cost-effectiveness of their exhib- vides funding to each of the ROM, McMichael itions. They either did not set targets for the profit and the AGO. Our audit concluded that Ministry or loss they expected their exhibitions to achieve, oversight of the ROM, McMichael and, in particular, or had not analyzed the results to identify why they the AGO should be strengthened to confirm that had missed their targets. effective systems and procedures are in place to We also found weaknesses in the Ministry’s meet all key legislative and public policy require- oversight of the museum and galleries. We found ments, as well as encouraging best practices for the that the performance indicators and targets that the operations of the museum and two galleries in a AGO, ROM and McMichael report on to the Min- cost-effective manner. istry do not cover the full range of their significant We found that while the museum and the two activities, limiting the Ministry’s ability to monitor galleries were acquiring artworks, objects and how effectively they deliver on their mandates. artefacts to add to their collections, they could not The Ministry also could not demonstrate why always demonstrate that the acquisitions they made it provided $21 million in annual funding to the were needed to meet their collection objectives to AGO—which is a transfer payment recipient—or justify the costs of these acquisitions to taxpayers, what the Ministry’s specific objectives were in pro- and additionally the AGO did not always acquire viding that funding, beyond generally assisting the artwork in a cost-effective manner. While we found AGO to fulfill its mandate. The ROM and McMichael that the museum and galleries were effective in are entities that are controlled by the province of preserving their collections through maintaining Ontario and receive annual funding based on that appropriate environmental conditions in their relationship. storage facilities, we found that they did not have This consolidated report contains 58 recommen- certain procedures in place to protect their collec- dations, with 123 action items, to address our audit tions from theft. For example, they did not have findings. policies to conduct regular inventory checks, and The observations in this report are organized there were weaknesses in their collection manage- into separate chapters for each of the Ministry, ment systems. While we found that the museum AGO, ROM and McMichael as follows: and galleries were exhibiting artworks, objects and artefacts related to their mandates, none of them had an effective process to demonstrate that they Museums and Galleries 5 selected exhibitions that were most likely to be successful. In addition, we found that they could explore opportunities to share their collections more widely across the province by looking for ways to increase the number of loans of artworks, objects and artefacts to other museums and galler- ies in Ontario. We also concluded that the Ministry, together with the museum and these two galleries, did not sufficiently measure, evaluate and publicly report on the effectiveness of the museum and the galler- ies. We found that the performance indicators and targets they reported to the Ministry did not suf- ficiently address the full range of their activities to provide the Ministry with the information it needs for effective oversight. Chapter 1 Ministry of Heritage, Sport, Tourism and Culture Industries targets that the AGO, ROM and McMichael report 1.0 Summary on to the Ministry do not cover the full range of their significant activities, limiting the Ministry’s ability to monitor how effectively they deliver on The Ministry of Heritage, Sport, Tourism and their mandates. Based on our observations, we Culture Industries (Ministry) provides funding to found a number of areas where the Ministry could museums and art galleries to support the culture request additional performance indicators and tar- sector and the Ministry’s overall objective to gets to improve its monitoring of these institutions’ improve the quality of life of Ontarians, and pro- delivery of their mandates, and to identify areas mote economic growth. where it may need to discuss or work with them In 2019/20, the Ministry provided a total of to require improvements that support continued $52 million in funding to the Art Gallery of Ontario taxpayer funding. (AGO), the Royal Ontario Museum (ROM) and the Regarding the AGO, the Ministry could not McMichael Canadian Art Collection (McMichael). demonstrate why it provides $21 million in annual Each of these organizations is governed by its own funding to the AGO—which is a transfer payment legislation that establishes its mandated activities. recipient—or what the Ministry’s specific objective Consistent with the traditional role of museums was in providing that funding, beyond generally and galleries, these activities include collecting assisting the AGO to fulfill its mandate. We also objects and artwork, displaying them, providing identified weaknesses in the AGO’s Board govern- education programs related to their collections, and ance processes where Board members donated generating public interest in their collections and artworks to the AGO, but there was no evidence exhibitions. In 2019/20, these three institutions that they declared their conflict of interest or had more than 2 million visitors. excused themselves during the vote to approve The AGO, ROM and McMichael are account- their donations. able to the Ministry—the ROM and McMichael are This report contains four recommendations, board-governed provincial agencies, while the AGO with eight action items, to address our audit is a transfer payment recipient.

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