SARATOGA SPRINGS, N.Y. (AP) – An upstate arts venue faces a state audit following its decision to cancel the summer residency of the New York City Ballet for financial reasons, and its board has decided to reconsider keeping the dance troupe after the 2004 season.

The Saratoga Performing Arts Center board agreed Thursday to spend 30 days considering how it can afford to keep the ballet on its stage in Saratoga Springs, 28 miles north of Albany, for at least one more year.

Peter Martins, the city company’s ballet master-in-chief and a board member, said he was encouraged.

A day earlier, the board received a letter from the state Office of Parks, Recreation and Historic Preservation saying its auditors will examine SPAC contracts, expenditures, licenses and other agreements. The parks agency has the right to inspect SPAC’s books because it is a tenant located inside a state park.

Assemblyman James Tedisco, a Schenectady Republican, told The Daily Gazette the audit is the result of rumors of financial improprieties that followed the SPAC board’s Feb, 12 vote to end its contract with the ballet.

SPAC has nothing to worry about, spokeswoman Helen Edelman said. “Our books are in order.”

SPAC President Herbert Chesbrough said two weeks ago the not-for-profit center could not continue the annual financial loss of about $900,000 from the ballet’s annual three-week residency, and would fill the vacancy with other dance troupes starting in 2005. That caused a public outcry among fans.

Last week Chesbrough sent a letter to Martins, suggesting the ballet’s return in 2007. The ballet has called Saratoga Springs its summer home since the performing arts center opened in 1966.

AP-ES-02-27-04 0831EST