City of Fresno takes over arts grants following $1.5 million embezzlement ‘crisis’
The City of Fresno is taking over the distribution of Measure P arts and culture grant funds after $1.5 million of taxpayer funds went missing from its nonprofit contractor, the Fresno Arts Council, due to alleged embezzlement.
“The Mayor and members of the City Council are appalled by the lack of safeguards put in place by the Fresno Arts Council, which ultimately allowed this embezzlement to occur,” city officials said in a statement Tuesday.
On Friday evening, the Fresno Arts Council said in a statement that it was “the victim of unauthorized financial transactions resulting in the loss of agency funds.” The employee, who remains unnamed, is no longer with the Fresno Arts Council.
According to the Fresno Arts Council, the city, local law enforcement and agency partners were made aware of the incident last week, which the nonprofit called a “personnel issue that is currently under investigation.”
The Fresno Arts Council did not respond to a request for comment.
The Fresno Police Department confirmed on Monday that it opened a criminal investigation into the embezzlement and that it would be working with the FBI on the case. The City of Fresno is also conducting a forensic financial investigation of the Arts Council.
“We’re going to move as fast as we can, because I know you all are in limbo,” Fresno City Manager Georgeanne White told grantees at an emergency meeting Monday hosted by Dulce Upfront, community multimedia arts organization. At least 70 people attended the meeting.
City officials confirmed that the stolen $1.5 million came from $5.7 million of Measure P funds paid on Oct. 1, 2024 to the Fresno Arts Council. The nonprofit organization had been contracted by the city to administer Measure P arts and culture grants.
The Arts Council distributed the vast majority of that money, “but had a shortage of funds as a result of the embezzlement,” the city said.
It’s not immediately clear how many organizations are still owed money. But White said Monday evening that 33 organizations are still awaiting grant payment from the last grant cycle.
White indicated Monday that the total amount of missing funds could be higher.
“I don’t think anybody can say that affirmatively until there’s a full investigation and accounting done,” she said.
In 2023, the city entered into a five-year administrative services agreement with Fresno Arts Council to manage public grants set aside by Measure P, the 2018 sale tax that raises money for parks and arts in Fresno. Twelve percent of the 30-year, 3/8-cent sales tax’s revenue is set aside for competitive grants for arts and cultural programming, administered by the Fresno Arts Council.
The first payout, in 2024, totaled $9.5 million and was awarded to 112 arts and culture organizations and projects in the city.
It’s not immediately clear if other programs administered by Fresno Arts Council have been impacted by the alleged embezzlement. The 47-year-old nonprofit runs several other arts and culture programs, including the 559 Mural Project, ArtHop, the City of Fresno Poet Laureate and Arts The Rural Arts Access Fund, supported in part by the National Endowment for the Arts.
The city said it will pursue “every available avenue to recover these hard-earned taxpayer funds up to and to include litigation.”
City delayed Measure P funding to Fresno Arts Council
White said the city withheld the most recent payment of $6.6 million to Fresno Arts Council due to insufficient financial reporting.
Normally, the city gives Arts Council the money in October to manage and distribute annual arts and culture grants, White said. But as of February, the city still hadn’t paid the organization due to insufficient documentation.
The nonprofit failed to provide certain records such as bank statements and check ledgers, White said. And the information that was provided was months late and so disorganized that city staff took another month to sort through everything, she said.
“My staff referred to it as a data dump,” she said.
White confirmed Monday that the city of Fresno sent a letter to the Arts Council terminating its contract to distribute Measure P funds effective Feb. 20. The Arts Council was also directed to return any unspent Measure P funds, records and documentation related to the grant program and contract.
The city will take over the distribution of an estimated $6.2 million in funds that were awarded to 134 recipients in 2025.
“I manage by crisis at City Hall because there’s a million of them a day. So this is the crisis, and crises moved up on the list of priorities,” White said.
Several grantees had questions on how to move forward with funding timelines, reporting requirements and fingerprint processes for certain projects working with children.
White estimated it would take at least a month to make the transition and start distributing funds to artists. First, the city needed copies of each contract with each art organization grantee in order to distribute the funds.
Meanwhile, many in the arts and culture community had been raising alarms about Fresno Arts Council’s grant-making process for months. Some attendees wondered why the city didn’t have more oversight of the process, especially in light of the public criticism about transparency issues.
“A lot of us sitting here today are like, would have been great to correct this back in October,” Kiel Lopez-Schmidt, a social justice advocate and community developer, said at Monday’s meeting.
Others questioned why the city allowed the Arts Council to move forward with this year’s grant-making cycle if there were already concerns about their reporting and the funds hadn’t yet been released from the city.
“My head’s f---ing spinning right now,” said Omé Lopez, owner of Dulce Upfront. “I’m so angry right now.”
White said the city chose to withhold the money to pressure the organization for more transparency and was working to modify the terms of the scope of work in light of the criticisms. “But we also recognize with nonprofits it’s common that it may take a little bit more time to get things together. And so, we were pushing,” she said.
Fresno City Councilmember Miguel Arias said Monday that some of the grants that have yet to be awarded might be trimmed down due to the lost revenue, but the city hopes to make whole all the organizations who are still owed money.
Any awardees who have yet to be fully compensated can call the city at 559-621-2999 or send an email to ExpandedArts@fresno.gov. Grantees are asked to include the agreement they had entered into with the Fresno Arts Council and any other relevant information.
This story was originally published February 10, 2026 at 4:56 PM with the headline "City of Fresno takes over arts grants following $1.5 million embezzlement ‘crisis’."
