Donna Arduin, a prominent state budget management and tax reform expert who was an early figure in the Dunleavy Administration, has uncovered possible fraud at the Kennedy Center for the Performing Arts.

The Kennedy Center is under scrutiny after she found internal documents that revealed a pattern of deficit spending and accounting practices that could prompt legal action. The revelations, first reported by The Daily Wire, point to alleged fiscal mismanagement during the tenure of recently departed president Debra Rutter -- mismanagement that current leadership now describes as "criminal."

Kennedy Center President Richard Grenell informed the board of directors this week that the organization uncovered $26 million in "phantom revenue" embedded in its fiscal year 2025 budget. "It's criminal," Grenell said, to The Daily Wire, adding that the findings would be referred to the U.S. Attorney's Office for investigation.

The allegations center on claims that Rutter and her leadership team fabricated revenue to balance the budget, misleading the board and jeopardizing the institution's financial integrity. Rutter has denied the accusations, telling The Washington Post that the board approved every annual budget her team submitted.

However, Kennedy Center Chief Financial Officer Arduin, who joined the institution earlier this year, disputed Rutter's defense in a letter obtained by The Daily Wire. Arduin, a high-profile budget expert with national experience, pointed out that audit processes and budgeting are on entirely different timelines and that audits do not validate budgets retroactively.

"Budgets and audits are on vastly different timetables and audits do not review the budgeting process," Arduin wrote to Grenell. "Audits are released up to a half year after the conclusion of the fiscal year, whereas budgets are approved well in advance of the fiscal year."

Arduin has a long record of strong fiscal leadership, having served as budget director in several states, including Florida under Gov. Jeb Bush, was well as New York under Gov. George Pataki, and California under Gov. Arnold Schwarzenegger. In Alaska, Arduin briefly served as Gov. Mike Dunleavy's budget director in 2019, where her cost-cutting proposals triggered leftists and the mainstream media. Because the Legislature did not follow her recommendations for drastic budget reductions, Alaska now faces the fiscal crisis that she predicted it would encounter. Legislators take more and more of Alaskans' Permanent Fund dividends and try to push taxes onto Alaskans.

At the Kennedy Center, Arduin concluded that the organization's fiscal year 2025 budget was deliberately veiled with $26 million in non-existent revenue. "The Board believed that they were in good faith passing a balanced budget," she wrote.

In March, Arduin informed her fellow senior executives the Kennedy Center had "no cash to pay our bills."

Beyond the fictitious revenue she unearthed, Arduin also detailed a concerning reclassification of donor-restricted funds. According to her letter, the Kennedy Center's leadership under Rutter renamed a $54 million debt reserve, originally designated for retiring a bank loan, as a "sustainability fund." The name change allegedly created the illusion of newly raised funding and allowed the reserve to be used to cover operational deficits.