Academy Retains Accounting Firm Despite Oscars Fiasco

On Tuesday, Oscars producer Michael De Luca and presenter Warren Beatty lunched together, and the Academy board met to dissect the foul-up at the 2017 ceremony as well as discuss future safeguards.
The scene onstage during the best picture announcement at the 89th Academy Awards

Despite the best picture fiasco during last month's 89th Oscars, the Academy of Motion Picture Arts and Sciences is retaining the services of accounting firm PwC for the 90th ceremony, the Academy's board of governors decided Tuesday night. But new safeguards will be introduced to avoid a repeat at next year's show.

On Tuesday evening, a majority of the Academy's 54-person board of governors — including Cheryl Boone Isaacs, who is in the final months of her presidency — gathered in the seventh floor boardroom of the organization's Beverly Hills headquarters, with others teleconferencing in, for the board's first in-person meeting since Oscar night, following a telephone conference call earlier in the month. It lasted far longer than the average gathering of its sort: some six hours.

Not surprisingly, the main topic of conversation was the Academy's relationship with PwC, the accounting firm that the Academy has retained to oversee its awards voting since 1934, and more recently to handle its taxes and board of governors voting as well. PwC's U.S. chairman Tim Ryan addressed the board for a portion of the meeting, again apologizing for the "human error" of Brian Cullinan and Martha Ruiz, the PwC "balloting leaders" who handed off the wrong envelope and failed to correct the mistake in a timely manner, respectively.

In an email to Academy members Wednesday morning, Boone Isaacs summed up the discussions that the Academy has been having with PwC since Oscar night. "Heading into our 84th year working with PwC, a partnership that is important to the Academy, we've been unsparing in our assessment that the mistake made by representatives of the firm was unacceptable." She went on to say that the Academy has been reviewing all aspects of its relationship with PwC, and after PwC presented revised protocols and controls, "the board has decided to continue working with PwC."

Not all board members felt an apology was sufficient, with some growing heated about the indefensible nature of the blunder that has caused their organization so much embarrassment. Academy CEO Dawn Hudson informed the board that she had become aware, before the 2017 show, that Cullinan had used his smartphone and social media while working on past Oscars ceremonies, and had explicitly instructed him not to do so this year; he disobeyed her, ostensibly causing him to be distracted while performing his duties near the end of the ceremony.

It also was revealed that Cullinan, a Matt Damon look-alike who clearly relished the media spotlight since becoming a "balloting leader" in 2014, had thrown a party the night before the Oscars and frequently boasted about knowing the winners — a far cry from the buttoned-up behavior that the Academy had come to expect from its accountants.

Under the new protocols, PwC's Ryan will take on a greater oversight role; PwC partner Rick Rosas, who was responsible for handing out the winning envelopes from 2002 through 2013, will return to that job; and another PwC employee, to be named in coming months, will join him. In addition, a third balloting leader privy to the results will be seated in the control room to ensure a more rapid response to mistakes in the future; the accountants will take part in the rehearsals; and all accountants will have to hand over their electronic devices before going anywhere near the Oscars stage.

Moving forward, the Academy will regularly review PwC's procedures and protocols to ensure that something like the La La Land/Moonlight debacle never occurs again.

Earlier on Tuesday, in a sign that others involved in the infamous moment are beginning to move on with their lives, The Hollywood Reporter spotted Michael De Luca, who produced the telecast with Jennifer Todd, with Warren Beatty, who presented the evening's final award with Faye Dunaway, at the Beverly Hills Hotel's Polo Lounge. The two appeared to be on good terms as they left the restaurant together.

Boone Isaacs also noted in her email to members that progress is being made in the construction of the new Academy Museum, scheduled to open in 2019. The first phase of construction, which included renovating the Wilshire May Company building and creating new underground space, is complete, she said, and the final phase, which will focus on the existing May Co. building and the Renzo Piano-designed sphere that will house a 1,000-seat theater, is beginning. At the meeting, Tom Hanks, who sits on the board and co-chairs the museum's capital campaign, presented a spoken tour of the space. 

March 29, 12:10 p.m.: Updated to include Boone Isaacs' message to Academy members.

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