Here, for your information, is another release from Tracy Rosenberg.
Monday, February 2, 2015
No premature signing by Pacifica's auditor
Here, for your information, is another release from Tracy Rosenberg.
Pacifica's Auditor Declines To
Sign 2014 Engagement Letter
Berkeley-As another month ticks by without a completed audit for the fiscal year that ended September 20, 2013, Pacifica's audit committee reported in writing that auditor Armanino LLC had declined to sign an engagement letter for Pacifica's next audit (for the year that ended in September of 2014). The report stated: (you can read the full public version here):
The PNB should be advised that, based on available information, it does not appear feasible to meet the regular March 31 due date for the FY2014 audit for the Corporation for Public Broadcasting. The issue at hand is that this work cannot begin until the FY2013 audit is completed, nor can we even engage Armanino to commit to this work, as approved by the PNB at the December 3 meeting.
The Corporation for Public Broadcasting's block grant programs, Community Service Grants (CSG) and National Program Acquisition Grants (NPPAG) require public radio stations with more than $300,000 in annual revenues to submit audited financial reports (AFRS) by 5 months after the close of the fiscal year, with brief extensions available. Full guidelines can be found here.
Enterprising Pacifica hosts used the organization's failure to file required financial reports as a fundraising pitch, re-arranging reality to accuse the agency of "playing hardball" and "punishing Pacifica" while never mentioning the organization hasn't fulfilled basic requirements to submit audited financial reports all other public radio stations comply with. The on-air whining violates most nonprofit development advice which discourages public statements of anger at funders who have provided millions of dollars in past support . The host went so far as to blame CPB publicly for a union vote underway at the Berkeley unit to increase health insurance copayments from $10 to $20 per doctor visit.
The auditor's decision not to expedite the 2014 audit means almost $2 million dollars in 2014-2015 CPB public funding will be forfeited by the board majority which allowed the entire year to go by without taking corrective action. Pacifica filed annual audits for the 30 previous years. The system failure has also precipitated an investigation by the California Attorney General due to Pacifica's failure to submit the audit to the state by June 30, 2014 as required by the California Nonprofit Integrity Act.
The Attorney General investigation did spur the release of the first income statements in six months from Pacifica's National Office, actually they spurred the release of two different income statements, one released to Pacifica's finance committee on Tuesday Janary 27th and another one released to the full board on Thursday January 29th. In the interval between Tuesday's financial statement and Thursday's financial statement, the financial position, primarily at Berkeley's KPFA, worsened by almost a quarter million dollars. No explanation was provided for why $215,000 in new expenses were suddenly found at KPFA in two days that had not been recorded in the previous four months since the fiscal year ended on 9-30-2014.
The overall financial position was pretty much unchanged from the previous year except for a few significant markers: 1) the end of the 2007-2012 Democracy Now contract ending the $650,000 a year expense for the program to Pacifica's national office 2) savings of $800,000 a year in payroll at WBAI from the July 2013 layoffs carried out by former ED Summer Reese, which left NY station WBAI showing the smallest annual operating loss of the network's five stations at $-36,000, followed by KPFT at $-51,000, KPFK at -$285,000 and WPFW at -$393,000.
The largest operating loss of the five stations was at Berkeley's KPFA, the home station of IED Wilkinson and PNB treasurer Brian Edwards-Tiekert which posted a 2014 operating deficit of $-491,00, the highest for the station in five years. The operating deficit sprung up in the last quarter of the year (July to September of 2014) where despite claims of surpassing fund drive goals, the station came up short by almost a quarter million dollars in listener support payments, meaning a huge amount of booked pledges seem not to have been paid following the May and July/August fund drives. During that period of time, the station made a controversial AM change, bringing in a syndicated program from LA to wipe the AM strip of locally generated programming on the premise of increasing income. However, the advertised jump in "pledges" didn't pan out in real life as listener support funds came up way short in the 4th quarter by hundreds of thousands of dollars, netting at $401,000 although the number should have been around $662,000 using the station's regular pledge fulfillment rate.
Pacifica's wait-wait-hurry up process to fill the vacant executive director position ground to a halt after the outgoing board convened an 8 hour phone call on a Sunday to interview candidates and then hurriedly voted less than a week before the end of their terms. The process had already been described as corrupt. No hire has been announced and rumors are flying that the board majority's choice declined to take the job. The second consecutive blown-up ED hire process poses questions about the board majority's sincerity about finding qualified leadership as despite spending no less than 20 of the last 24 months in executive search mode, the board continues to allow the organization to be lead by a retired clerical worker who describes herself as unqualified for the job after orchestrating the removal of the previous executive director.
In New York, WBAI continues in an apparently endless (now 6+ months) negotiation to secure accomodations for its transmitter and escape a crushingly high contract at the Empire State Building, now costing over half a million dollars a year. At WBAI's local station board meeting, GM Reimers disclosed that he and CFO Salvador were the current negotating team and that an attorney who was assisting had been sidelined and was just consulting. The negotiations appear to be somewhat problematic as Reimer's last financial statements showed that WBAI paid $163K to Empire in October and November of 2014, or half the entire the gross receipts of their month long fall fund drive. Asked for paper back-up about the status of the negotiations, Reimers apparently responded "trust me" to his local board. WBAI has a standing offer from competing transmitter site 4 Times Square to relocate for $14,000 a month rent, a savings of at least $25,000 month, but has been scared to leave Empire in fear of being sued for the $3 million dollars+ remaining on the lease signed by a Siegel/Brazon-faction dominated Pacifica National Board in 2006.