A four-month look into finances, accounting and safety practices at Virginia Museum of Transportation determined that allegations by former board members were unfounded, directors said last week.
Virginia Museum of Transportation Director Mendy Flynn earlier this year: “We’ve done some things, but there’s a lot more to do,” Flynn said. “We have a few exhibits we’re looking to change up, that would be part of the (state) money.”
Some of the six departed museum board members said they remain skeptical until they can review the report in detail. Those past members, including the former president, resigned during the museum’s annual meeting in June, claiming various issues with the nonprofit’s management and spending.
Gentry Locke Attorneys reviewed dozens of museum documents in search of legal compliance issues, according to a summary letter from the law firm.
Accountants from Winchester-based Yount, Hyde and Barbour consulting were also involved reviewing financial documents, according to the letter written by attorney John Danyluk of Gentry Locke.
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The review was asked for by the museum’s board, which voted to approve it. The cost of the review was not immediately available.
“After thoroughly reviewing all of this documentation, investigators determined that there were no identifiable issues or concerns with respect to VMT’s handling, spending, or accounting of state grant funds,” Danyluk wrote. “Further, VMT’s balance sheet and profit & loss statement, along with the banking documentation to support these financial statements, indicates that VMT is financially healthy.”
The report shows that Virginia Museum of Transportation had spent $175,000 out of a $500,000 state grant as of June 30. Some of the departed board members’ questions revolved around how that money was being spent.
“Investigators determined that the allegations leveled against VMT at the annual meeting were unfounded,” the report said.
Volunteers, staff and board members at Virginia Museum of Transportation do it out of love for their community, said President Tom Cox.
Cox
“We’ve been doing things the right way,” Cox said. “Are we perfect? No. But have we done anything with malice, or engaged in any malfeasance or mismanagement? No.”
Cox said the museum was enduring financial hardship during his initial time as president in the 2000s. He said he has served on other museum boards with similar financial challenges.
“Museums are always hand-to-mouth at times. There’s an ebb and flow to them,” Cox said. “Right now, we’re on the flow. VMT is in a very financially strong position, and as a consequence we’re able to invest money back into the museum and build it up.”
The Virginia Museum of Transportation is described as the state’s “official” transportation museum, but it is not a formally recognized state agency.
In the 2023 fiscal year, the museum generated about $850,000 in revenue, and spent more than $1.5 million, for a net loss of $700,000, according to publicly available financial statements. The museum’s 2024 fiscal report isn’t due until May 2025.
“We get more outside visitors than anybody else, out of town visitors. That gives us an opportunity to put the community’s best foot forward,” Cox said. “We want everybody to be proud of this place, and we want it to be here.”
He said allegations by the former board members came not only as a surprise, but could potentially harm the museum’s chances to gain recognition as an official state agency. Although the museum received funds from the state budget this year, it has not achieved official state agency status from the legislature, nor the recurring funding that would come with that.
Amid some questions about the the Virginia Museum of Transportation’s operations, its current leaders say it’s in good financial shape and new projects are being discussed.
“We’re putting the money into capital improvements, badly needed ones. All types, electrical and so forth,” Cox said. “We’ve got a lot of positive things going. We knew in the back of our minds that nobody was going to find a smoking gun.”
He said the investigation cost the museum money, and added, “we’ve given everything but a cavity search.”
Cox said one positive initiative upcoming for the museum is a new exhibit upstairs, focused on aquatic transportation. He said that exhibit should have a grand opening by the new year.
The resigned museum board members have all been replaced, Cox said. The departed members were part of the crew that managed the museum’s Norfolk and Western 611 steam train, and their abrupt parting caused the cancellation of this year’s excursions event.
Rail fans watch from an overpass and from the trackside as the Norfolk & Western Class J No. 611 steam locomotive inches its way into the yard at Virginia Museum of Transportation on June 2, 2023, in Roanoke.
“I’m not going to prognosticate about their motivations,” Cox said. “Other than, for people who profess to care so much, they certainly didn’t handle themselves in the most professional manner.”
He said the board “absolutely” wants to keep the 611 operating as much as possible, and hopes to return the popular excursions events next fall.
Some of the former members, speaking off the record until they learn more about the review, said they want to see copies of the full report before their concerns are put to rest. They want to know for sure how thorough the investigation was.
The report from the accounting firm said it conducted an “agreed-upon procedures engagement,” rather than “an examination or review engagement, the objective of which would be the expression of an opinion or conclusion.”
“Accordingly, we do not express such an opinion or conclusion,” the report said. “Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.”
The Virginia Museum of Transportation received funding from the state’s new budget. Resignations from the museum’s board generated questions about where it stands. A recent audit released by the museum’s board found no serious issues.
Cox said he hopes the report eases peoples’ concerns, and that former board members can move past their disagreements with the museum.
“Not only has the museum been spending its monies wisely, and in the manner expected, but we’ve also accounted for all of it, and we’ve also obviously kept good records of all of our board minutes, and all of our procedures and protocols have been properly followed,” Cox said. “We’ve done what we were expected to do, and done what we needed to do in order to keep the museum safe and stable.”
