Last year's decision to cancel the Robert Mapplethorpe exhibition has cost the Corcoran Gallery of Art more than just its pride: It is in deep financial trouble, its acting director says.

Solvent before the Mapplethorpe debacle, the Corcoran has since sunk into the red, with a 1990 shortfall for the museum and its school now at $1.2 million. "The money will have to come out of our $2 million unrestricted endowment," says acting director David W. Scott. "We cannot continue another year at this rate. Our backs are against the wall."

Elinor Farquhar, chairman of the Corcoran board of trustees, concedes the institution has suffered damaging losses, but says she is more optimistic than Scott. She says she believes the budget can be balanced by next summer, and says the board is considering replenishing the endowment by selling an adjacent parcel of land on which it has been planning to build an income-producing office building. She called the property, now a parking lot behind the museum at 17th Street and New York Avenue NW, "a prime piece of property worth at least $8- to $10 million."

Donations to the museum fell precipitously after June 1989 when former director Christina Orr-Cahall canceled the Mapplethorpe exhibit in order to distance the Corcoran from the brewing controversy over public funding of potentially offensive art. Artists boycotted the Corcoran, gallery membership fell by 20 percent, and Orr-Cahall was forced to resign.

The Corcoran's finances have never recovered.

This week, the Corcoran Gallery changed its policy on admission fees after 10 years of being open without charge. The gallery now requests $3 for adults and $2 for seniors and students over 18.

"We're not charging admission," says Scott, "but we're strongly requesting it."

The 10-year free-admissions policy had been made possible by a $1 million grant from the Armand Hammer Foundation; the grant expired last July and has not been renewed. "Hammer is now building his own museum," explains Scott. "Up to now, he has been getting his credits from helping other museums; now I think he wants to get it from his own."

"The new policy started Tuesday," says Scott, "and after three days, we're taking in 20 times as much as we got with a mild little appeal in the collection box at the top of the stairs. We just moved the box closer to the front and made the wording a little stronger. Nobody's resenting it, and we've discovered that out-of-town visitors expect to pay."

Scott says no one will be turned away, and that Thursday evenings at the Corcoran are still free, subsidized by Mobil Corp.

The $1.2 million shortfall in the Corcoran's $7.5 million budget was a direct result of the Mapplethorpe cancellation, Scott says, and from difficult decisions he and the board of trustees were forced to make to address administrative problems revealed in its wake.

"We were solidly in the black as of June 1989, as our annual report proudly announced at the time," says Scott. "It was only after the cancellation that the bottom dropped out -- membership, corporate support, everything.

"We lost about 20 percent of our anticipated revenue, and one thing piled on top of another. When we went out to ask individuals, foundations and corporations to support a project, or a program, the general reaction was 'We don't know what's going to happen there: We don't know if it's a sound investment.' They said, 'You need a new director and a new direction.'

"But that didn't work," says Scott. "We got rid of the old director and got a new president. But then they said, 'You have to define your mission and goals and assure us that you'll be there in the future.' There was little I could do. I was a lame duck from the start," says Scott, a retired artist and museum director, who had signed on reluctantly, he says, out of devotion to "a valuable institution that didn't deserve to be choked to death."

The debt was also increased, Scott says, by the board's decision to reduce its size in order to streamline management.

"Mapplethorpe was the catalyst to address this problem of too many uninvolved trustees, but the cut in number from 55 to 34 has cut contributions as well," says Scott. "Several trustees had routinely given $10,000 per year. Many of those who were dropped stopped making their regular contributions, and we lost a considerable amount as a result. He says the number of trustees will be pared to 27 by the end of this year.

"It was ultimately good management, but it hit at exactly the wrong time," says Scott.

(Julie Folger, longtime Corcoran women's committee member and the wife of one of the trustees dropped from the board, questions whether the move was good management. The trustees took the action, she said, "just at the very moment they needed every bit of help they could get.")

Orr-Cahall's golden parachute -- rumored to be in excess of $200,000 -- was more dead weight. Scott would not confirm the amount, but says that "her severance cost dearly when we could least afford it."

Also contributing to the financial losses were expenses for long-overdue building maintenance, Scott says.

"We put $150,000 into stopping all the leaks in this place, so that hit us too. When I first came here, and it rained, there were buckets all over the place -- on the ceiling, on the floors, in the attic. All those acres of glass have now been resealed at the junctures, inside and outside. I no longer have nightmares when it rains.

"We're down to about three or four drips, and in a way, that symbolizes the new Corcoran: It's something we should have addressed years ago, but it's hitting us just when our income is down. ... A year and a half after the tragedy, the Corcoran is doing what it should have done years ago."

But Scott sees positive signs. "Our membership is now coming in 15 percent higher than last year at this time, and I expect that will continue," he says. "We haven't really begun to put on the shows to attract new membership, and we have lots of granting appeals out."

He also says he hopes that a permanent new director will be in place by the end of the year. No final decision on a candidate can come before the board's next meeting on Nov. 19, Scott says, "but I am counting on being replaced by the end of the year." Scott says there is a candidate, but he's not naming names.

"Nobody has said his name above a whisper," he says, adding that the man has been "signed but not sealed."

"I'm confident that when the new director is in place -- hopefully by the end of this year -- there will be another spurt of interest and people will come back. But it's Catch-22: We have to keep alive till then."