The Carolina Theatre of Durham has been celebrating record attendance and revenue—up 42% in the past two years—from $3.5 million to $5 million.
But theater administrators revealed yesterday that because of accounting "errors and omissions," they are actually more than $1 million dollars in debt.
The theater receives an annual $650,000 subsidy from the city of Durham, and City Manager Tom Bonfield is trying to understand the magnitude of the problem.
“And then once we understand that, then we can evaluate the proposal that they put forth about how they can recover over a several year period to pay off creditors and improve the overall performance of the theater," said Bonfield.
Bonfield says The Carolina Theatre is asking the city for a $600,000 cash advance.
“We had been led to believe with that subsidy they were in the black and fairly close to the black and were doing pretty well," said Bonfield. "Now, all of a sudden, we find out what was a $40,000 profit is a million dollar deficit.”
A statement from The Carolina Theatre says the non-profit thought it was operating at a profit. And because of the faulty information, they expanded programming and staff.
Now, President and CEO Bob Nocek said in a statement, "We have reduced overall spending wherever possible, including a reduction in full-time positions from 22 to 18 through attrition, one layoff, and one conversion to part-time."
In a video statement posted on the News & Observer website, Nocek said the public won't see an impact as it corrects the financial error.