Why Agarwal cut out

March 28, 2018
Dear All,
Sub: Notice for Resignation

I have concluded that I cannot be effective in my job and have decided to give this notice for resignation. I have written a detailed Memo to PNB and provided hundreds of pages of documentation in support of my reasons for doing so. These reports lay out very vividly many requests that I have made over last two years, which have largely not been addressed. Out of respect and privacy, I am providing a shorter version only, for Pacifica Wider Governance. However I have not marked PNB Memo as “Confidential” and any one can request the full copy from any PNB Member. A full copy along with the attachments will also be available at the National Office in HR records.

Briefly, following are the primary reasons for my resignation:

a. There are extremely hostile working conditions and excessive workload and demands on my time. I have documented this in my successive CFO Reports for last one year.

b. As I have reported several times, our Audits, both for Financial Statements and Retirement Plans are seriously delinquent since 2016. We are able to complete our audits in approximately 500-600 days from the Year closing. I have requested adequate resources, both at the Stations and National Office, but PNB has failed to take any action. Stations have not made Central Services payments of over $600,000 in last two years. So, National Office cannot make any hiring decisions in the absence of regular cash flow. We are in a perpetual cycle of delay and default and spend excessive time in seeking extensions. Attached is a list of Due Dates and Audit Delinquencies.

c. We are seriously delinquent in our Retirement Plan matters and have not paid the contributions since FY 2015. We are critically behind in our compliance reporting and will attract heavy penalties. Few months back, I had resigned as Plan Trustee as I cannot take personal responsibility for such failures. PNB has failed to mandate the stations to set aside money to pay the outstanding dues. In the absence of a qualified Human Resources Manager, it is very difficult for me to deal with such complex matters.

d. I and some other officers had met the CA Attorney General on Dec. 11, 2017 to express our concerns regarding PNB dysfunction and its inability to act in its best interest. A full copy of the filing is available at the National office. Lack of direction and decision making has resulted in continued deterioration in financial health of the organization so that it is finding itself teetering on the edges of bankruptcy. I and Bill Crosier, former IED, had put together a Financial Stabilization and Recovery plan on the directives of CA AG in March, 2017. However, there is no support or initiative for its implementation.

e. Recent PNB action in approving a $3.7 million loan has put me in an impossible position. The loan mandates extensive accounting and financial reporting requirements which cannot be met in any foreseeable period of time. We do not produce Balance Sheets monthly, so cannot track / report our liabilities on a current basis. We generate Balance Sheets only at the time of audit which is running about 500 days late. Under any loans, it is almost mandatory to produce current audit reports in a reasonable time. We cannot comply with this requirement. There are other documented delinquencies like non-compliance and non-payment of Retirement contributions which puts us in direct breach of loan covenants. I have repeatedly informed PNB of my serious concerns, but it has had no effect in its decision making. It is unconscionable for me to wait for a few months and then report default when it is clear that we will not comply at the outset. Our accounting and reporting is so deficient that, at the present rate of progress, it will take years to come close to meeting the demands. This is ONLY IF, extraordinary resources are devoted for improving the situation, which I have not seen happening in last two years.

f. CFO / National Office is ineffective in making improvements in accounting or strengthening internal controls. Two stations do not have Business Managers and cannot maintain their records completely or accurately. Other stations are struggling with shortage in resources so that they cannot keep up with their regular demands. There is no active support or interest from Local Station Directors to take an active part in helping the situation, where deficiencies are highest. Instead, there is resistance and challenge in making any changes and demanding accountability.

g. Most of the decisions for solving our financial crisis have been led by a few Directors. CFO has very little or no role. No spreadsheet analysis has been done how the loan and interest will be paid off or how other critical payments will be made There does not seem to be any other option, but for selling assets, but that is not favored by the Directors. So, it puts me at great odds with those who are driving these decisions, and make working conditions quite stifling. These decisions are also at odds with General Legal Counsel and Auditors who all have recommended development of a comprehensive debt repayment plan and restructuring and reorganization.

h. For Last 5 years, our Revenues are on a declining trend or barely stabilized, but our losses have been mounting. We have accumulated deficits of over $4 million. No measures have been taken to improve working capital at stations which are struggling to pay their bills. This is not a sustainable position. CFO is restricted from playing an active role because of local station politics.

In summary, I am not seeing any path going forward, for me, as CFO to provide the leadership and direction to the Foundation in financial matters.

My departure should not be a surprise to many. I have expressed my concerns and inability to function for last few months. Yet, notwithstanding my personal disappointments, I will try my best to ensure a smooth transition. My last day of work at Pacifica will be Friday, May 4, 2018.

However, I do reserve the right to cut short my notice period if the hostilities increase or working conditions become unbearable.

Thanks for your time.

Sam Agarwal

Chief Financial Officer
Pacifica Foundation
1925 Martin Luther King Jr. Way
Berkeley, CA 94704-1037
Bus Cell: 612-205-6658
Work: 510-849-2590 x 208
sagarwal@pacifica.org

Attachments:
Due Dates and Audit Delinquencies

Copy:
Regalia & Associates, Auditors
Audit Committee
National Finance Committee
All Local Station Boards, 
General Managers, Business Managers all stations