Revised CPB policy could lead to ‘significant’ penalties for noncompliance

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As more local pubcasters fall out of compliance with CPB’s rules for transparency and open meetings, they put themselves at risk of new financial penalties from the corporation’s Inspector General.

Under a policy that took effect early this year, the IG has more flexibility to recommend fines for station grantees that don’t meet CPB’s standards for releasing financial records, for example, or for providing adequate notice of board meetings.

One station — Lakeshore Public Media of northwest Indiana — has already been fined $5,000 because it failed to document announcements of public meetings. Many other stations are vulnerable to such penalties, according to CPB officials, who have been advising local pubcasters about problems with compliance during appearances at public media conferences.

According to data compiled by CPB, more than half of its radio and television grantees didn’t provide timely notices of public meetings in 2013 and 43 percent did not release their financial records. The vast majority of stations — 86 percent — haven’t published details of their plans to bring their disclosure practices up to standards.

“There is rampant noncompliance,” said Robert Winteringham of the Public Media Consulting Group, during an Oct. 21 session at the National Educational Telecommunications Association conference in Atlanta.

Winteringham, who worked in the CPB general counsel’s office until earlier this year, appeared at NETA with CPB Deputy Inspector General Bill Richardson. He said compliance problems encompass all types of stations and licensees.

To qualify for CPB Community Service Grants (CSGs) and other federal assistance, stations must comply with standards outlined in the Communications Act.

These rules fall into five general categories: meetings must be open to the public and financial information must be disclosed publicly. Certain types of stations — those that aren’t licensed to states or public universities — must establish community advisory boards, and all stations must meet equal employment opportunity regulations and reporting requirements. In addition, stations must adhere to prohibitions on sharing donor list information with political groups or other unaffiliated organizations.

When local pubcasting leaders sign annual CSG agreements, they are, in effect, certifying that their stations are in compliance with all of these standards.

“This is a very real and legally binding thing that you’re signing,” Winteringham said. “You’re saying that you do these things, and if you don’t that’s a legitimate argument the IG can make.”

In addition to potential fines, stations that fall out of compliance could also be disqualified from the CSG program.

The policy that CPB adopted early this year was designed to provide what Richardson called a “middle ground” for enforcing compliance by allowing the IG to recommend fines. The previous policy lacked a measured approach. The IG had few options other than recommending that CPB revoke a station’s CSG qualification.

CPB’s focus on compliance stems from a worrisome trend of CSG recipients slipping below its standards.

The percentage of stations that fell out of compliance with open meetings requirements grew 10 percent from 2005-13, to 52 percent of stations. For rules on maintaining open financial records, the percentage of noncompliant stations doubled to 43 percent.

CPB also signaled its intention to bring more stations into compliance in fiscal 2014. It added language to its instructions to 2014 CSG recipients, advising station officials on the standards and warning them that noncompliance can lead to a “significant” financial penalty or loss of CSG eligibility.

Lakeshore Public Media, a joint licensee headquartered in Merrillville, Ind., was the first station to have been fined under the new policy.

An audit by the CPB IG’s office faulted the pubcaster for noncompliance with CPB’s disclosure standards in fiscal 2010—2011, including its handling of quarterly announcements of its open meetings policy. CPB imposed a $5,000 fine.

Lakeshore ran the announcements in closing credits of its TV newscast, but didn’t maintain records of them, according to Mary Lewis, v.p. of administration. “We didn’t tape the credits, so I couldn’t prove it,” she said. “But, I learned a lot going through that audit. Now, for the last four quarters we send a DVD and a script with afidavits saying we’re showing the spots.”

Lewis spoke about the audit during the Public Media Business Association conference in May and later hosted a webinar so that other pubcasters would learn from her stations’ mistakes. She urged pubcasting peers to review their stations’ policies and bring them up to compliance.

“As far as I’m concerned, [CPB is] giving us hundreds of thousands of dollars and, if we want that funding, we should be in compliance,” Lewis said. “As with any grant, there are going to be stipulations.”

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