(FOX40.COM) — An audit of Capital Public Radio’s finances has led to several changes in oversight at the media outlet and concern over its future.
In early fall, Sacramento State, which holds the FCC license for the radio station, got more involved in the outlet’s operations following the audit’s findings.
The audit, conducted by the California State University Chancellor’s office, was requested by former university President Robert S. Nelsen in 2022 after the university’s financial team discovered discrepancies in its financial statements.
Here are the major points about the station’s financial and management troubles.
The audit detailed several occasions of inadequate financial practices, such as a failure to make payments on a multimillion-dollar loan, improper record keeping related to the reporting of vehicles’ values when determining fundraising amounts, and taking out loans that were not approved by the station’s board.
At the same time, the station management was moving forward with major projects, including a relocation to a downtown Sacramento office space, the opening of a venue in the same area, and a costly project associated with one of the station’s radio towers.
CapRadio, as a non-profit, can’t file for bankruptcy, leaving Sacramento State, which administers the station as an auxiliary, responsible for its debt.
As part of its connection to the university, the station needed to have educational opportunities for students, but these were found to have not been continued after the pandemic.
CapRadio lays off staff, cancels programs
In September, CapRadio announced it laid off 12% of its staff and canceled four music programs, citing financial issues.
The layoffs affected employees at the Sacramento-based station and at North State Public Radio, and included some longtime and part-time employees.
In addition to the layoffs, CapRadio said it gave three other employees a final employment date.
CapRadio faces insolvency; New university oversight
Sacramento State Chief Financial Officer Jonathan Bowman was appointed by university President Luke Wood to be the administrator in charge of CapRadio.
The appointment happened after an analysis by the university found that the radio station may not have financial resources by January 2024.
According to the university, Bowman is credited with identifying inconsistencies in CapRadio’s finances in 2021 that led to Sacramento State requesting an audit.
CapRadio hires new GM, Sacramento State opposes hire
Following the appointment of Sac State’s CFO, CapRadio board members voted to hire a new general manager, a move that was opposed by the university, which said in a statement that it would not fund the position.
According to the university, the new hire is coming at a cost of nearly half a million dollars per year.
The move was also opposed by a student board member and the university’s student body president, who asked for the station’s board of directors to resign.
“With serious issues of accountability, financial processes and controls, and fiscal instability highlighted in the CSU audit, the board still decided to move forward with the hiring, despite the university’s request to not do so,” Sacramento State said.
Board members resign
Following the opposition of the new general manager hire, 14 board members resigned on October 4, including the board chair and officers, according to CapRadio.
In the resignation letter, board members said the university failed “to inform and engage with the board in a good faith effort to resolve CapRadio’s financial issues.”
CapRadio said Wood accepted the resignations and responded to the letter by saying “Thank you for your service and dedication to public broadcasting. The university looks forward to working to ensure a stable future for Capital Public Radio.”