Audit Committee Meeting - February 5, 2018

With that eagle eye and extrasensory Pacifica perception, Indigopirate had all ears to yesterday's babbling PNB stream and came up with a suggestion:

Let’s Follow The Money, Shall We?

Sam Agarwal, Pacifica CFO, has for some years complained at length that it’s impossible for him to do his job without more money, and has for those same years complained at length as to how he cannot retain staff, train staff, or hire contractors to perform essential functions.

Yet his most recent response to Pacifica’s National Audit Committee, which was much delayed, states that he paid himself as well as some of his staff from the monies donated to Pacifica last year which were to have been dedicated to paying outside audit expenses.

Whether or not this may have included overtime or performance bonus for what he previously reported as extraordinarily, indeed heroic, efforts to complete long, long overdue audits was not made clear, though it was clear that the allocation of monies was at his sole authorization.

As CFO with no oversight he was of course able to do that, at his sole discretion, and without any reporting or justification – indeed, any characterization as to the allocation of those specially raised dedicated funds was long resisted and obscured, the first questions being raised by last summer.

It came as a shock to the Audit Committee.

He now says that he needs $500,000 to pay for bringing audits and other required reports fully up to date.

He now further says that, by the way, Pacifica needs a minimum of $6,000,000, very quickly.

No unit of Pacifica has submitted even a tentative budget for FY 2018, fully approved budgets having been due by 1 October 2017.

It is reported that there are no balance sheets.

None.

Thus, we are told, no actions of any sort have been taken.

Having had its previous requests for extension to file its FY 2016 audit previously rejected, with a deadline of 14 February looming, and the process having not actually begun, Agarwal has repeated the request for further extension, with the same basis as previous rejected attempts, asking for an extension to 31 May.

All this seems to further reflect a total loss of any financial control, controls, or oversight at Pacifica.

It also raises a question or two as to Agarwal.

                                                             ~ ‘indigopirate'

How do your ears perceive this telephonic to-do?

And here is the latest word from former iED Bill Crosier:

I sent the e-mail below a couple of weeks ago, pointing out how if we're going to avoid bankruptcy this year then we need to focus on increasing revenues and controlling expenses. Since then, I've seen NOTHING from those opposed to loans on how we should do that (get more money so we won't have to file for bankruptcy).

Instead, the PNB has continued to spend zero time on plans to improve our finances. Those opposed to bankruptcy on the PNB seem to be focused solely on making sure that they remain in control of the PNB this year. Should this loans vs bankruptcy litmus test be the only thing that matters when choosing PNB officers and national committee members for 2018?

I don't think so. In fact, as I said a couple of weeks ago (again, see that note below), if we stick with the loan route that the PNB majority seems to want, without making changes in our operations to generate a substantial surplus this year, we're going to be in bankruptcy within a year, whether you want it or not. Those of you who think we should continue to avoid bankruptcy need to help us focus on fixing our finances - not just kicking the can down the road.

KPFK and KPFT have been doing significantly better than they were a year ago, although KPFK has been doing it with very long fund drives - almost as much as WBAI. But these changes are not enough. WBAI continues to run large deficits and they are having even more trouble paying their bills now than they were at this time last year. WPFW is doing a little better than a couple of years ago but needs to do better, too.

The second bigger ($3 to 3.5 million) loan that we are looking for, even in combination with proceeds from selling the building that houses the National Office/Nakapon building, will only provide temporary relief. But it will do that by requiring that we generate additional cash flow later to pay off the loan (even if it's structured to require no payments in the first year). The plans for selling NO/Nakapon also call for putting aside enough funds to lease back the NO space for up to a year and pre-pay rent on a new place for another year, but we'll need additional cash flow (more than we have now) after that to pay rent.

We MUST make operational changes, soon, to increase our cash flow, because we're going to need a lot more of it at least through June 2020 (when the Empire State Bldg tower lease ends) and also to pay off the loan.

We need to develop and actually implement a real plan to improve our finances - not just talk about it. I realize many of you don't want to hear this, but I think we have to do the following, at a minimum:

* Make significant changes at WBAI. It's in the largest city in the country with the best (and most expensive) antenna location there, yet even while paying nothing on its tower lease it can't even raise enough money to pay its other financial obligations. And it has, by far, the largest debt to the rest of Pacifica (at least $4 million) - that's in addition to what is owed (and will be owed) to Empire State Realty Trust.

* Control the increase in expenses (primarily for staff) at KPFA and KPFK, so they don't go the route of some other stations with ever-increasing fund drive days.

If/when we can actually implement (again, not just talk about) a real financial recovery plan that includes the above, I think we can get more major donors, which we really really need. But it's going to continue to be difficult to get them if we can't show that we are serious about getting our finances under control.

When can we work on making the changes needed for Pacifica to survive? Will we continue to spend most of our time and energies fighting with each other? We need to remember our real adversaries - the corporate broadcasters and the crazies in the White House and Congress (and state governments). If they pay any attention to us at all, it's probably to laugh at how work so hard at infighting, instead of working to preserve our mission.

Bill