Mayor Brandon Scott’s office called Thursday for an “independent forensic audit” of the Baltimore Office of Promotion and the Arts, and pledged to withhold for now a requested cash infusion of $1.8 million — casting doubt on the future of the besieged event-planning agency.

“The picture presented by BOPA at this afternoon’s board meeting is deeply troubling and raises more questions than it answers,” a spokesman for the mayor wrote in a prepared statement. “The city will not be directing any supplemental funds to the organization until the audit is complete.”

While city officials pledged to continue working with BOPA, “there will be serious conversations about the long-term path forward,” the statement said.

BOPA is a quasi-governmental agency charged with mounting such public city celebrations as Artscape, the New Year’s Eve fireworks, farmers markets — and the Baltimore Book Festival, which is scheduled to celebrate its 25th anniversary Sept. 27-29.

Despite the current financial crisis, the Book Festival will be held as planned, according to BOPA’s newly appointed CEO Rachel Graham, who started the job in March.

“The Book Festival is moving forward and we are committed to providing funds for it,” Graham said, “even if it does put us in the space of having to make up a little bit of lost ground.”

Despite the city’s decision to withhold the requested $1.8 million in emergency funds, Graham said that BOPA will be able to meet its payroll obligations, thanks to an unrelated pot of city money — a quarterly budget allocation of $682,500 that the agency received this week.

During an emergency meeting on Thursday, Graham said she and board chairman Andrew Chavez found out only recently that BOPA has been running annual deficits since at least the 2018-19 fiscal year.

The organization hired Marcum LLP, an accounting and advisory firm, to review BOPA’s financial statements and to project monthly balances for the remainder of 2024.

The accounting firm made several troubling discoveries: BOPA had been shifting money from its reserve account for several years to pay its bills — funds that were never restored to its rainy-day account. In addition, the financial firm projections for the remainder of 2024 concluded that BOPA would likely run monthly deficits ranging from $314,000 to $651,000.

Graham said she first began to suspect that something was wrong in May, when her staff told her that there had been no reconciliation of accounts since June 2023, following the departure of former CFO Brian Wentz.

“It’s hard to have an actual budget if we don’t know what we spent last year,” she said. “It’s hard to know what you don’t know.”

Graham was asked during the meeting why, given the organization’s financial troubles, she did not cancel the 2024 Artscape, the city’s marquee annual event.

She said that BOPA had already made commitments to several major vendors. Scrapping Artscape, she said, could have worsened the organization’s financial situation by putting it into a position to be sued for breach of contract.

“The reality is that we would still have been in a deficit,” Graham said. “If we had canceled Artscape, we would be exactly where we are right now.”

During the past two years, BOPA has been roiled by one high-profile scandal after another, from the cancellation of the 2023 Martin Luther King Jr. Day parade to a misguided attempt to trademark the “Artscape” name.

Graham added that the well-publicized controversies made it much more difficult for her development team to raise money.

“The very real reality it that is has made it very very difficult to fundraise,” she said. “We been told that the instability of the past three years has cooled off the interest in supporting” Artscape or any other public city event.

Chavez said that the full extent of BOPA’s financial woes won’t be known for several weeks.

“Our financial position is becoming clearer, but it’s still not 100% clear,” he said. “Our directive from the city is to overturn the rocks, find the monsters, and chart a way forward.”

The board will meet next on Wednesday to discuss what that “way forward” might look like.

Chavez and Graham said it could include giving up its lease at its fancy new headquarters, where it is currently paying rent of more than $4,000 a month. In addition, Chavez said, no cost-saving option is off the table at the moment. He wouldn’t rule out reducing the size of BOPA’s 22-person staff.

“We’re looking to maximize efficiency,” Chavez said. “I can’t really comment about whether that will lead to layoffs.”

The mayor’s statement hinted that the city might consider defunding the arts agency, an outcome it has threatened in the past. Such a decision would effectively put BOPA out of business.

In June, the Board of Estimates approved a one-year contract that keeps the agency on a short, tight leash. The contract also included a provision that would allow the city to terminate its contract with as little as 30 days’ notice.

Graham said that negotiations with the city already have begun on a potential contract for the 2025-26 fiscal year. She said she hopes that the current financial strain will not cause the demise of the organization.

“I believe BOPA is needed,” she said. “It is a necessary entity. I can’t imagine Baltimore functioning without BOPA.”