An audit released Wednesday by the CPB Office of the Inspector General questions $2.3 million spent on development of the Public Media Platform, including costs charged by its founding partners.
IG Mary Mitchelson faulted financial management and documentation during PMP’s build-out and startup phase, which CPB backed in 2012 with a five-year, $8 million grant. The report questioned salary and contractor expenses claimed by the five founding members of the project — NPR, PBS, Public Radio International, American Public Media and Public Radio Exchange — from Nov. 1, 2012 to Dec. 31, 2013.
None of the founding organizations maintained sufficient records to support $835,156 in labor expenses, and three kept insufficient records tracking $1.5 million in software development services during the period of the audit, according to the report.
In a rare public reaction to an OIG audit, CPB issued a press release Thursday after reviewing the report. The release included a response from PMP Executive Director Kristin Calhoun.
“While there is no disagreement that extensive, valuable work was performed on this project appropriate for reimbursement by CPB,” the corporation said, “CPB will be working with the OIG and the PMP to determine whether the charges for the work completed can be substantiated.”
Mitchelson’s team also found that NPR billed technical services on a more expensive flat-fee basis and charged other costs at a higher rate than the grant allowed.
CPB defended the fee structure as appropriate and said “the amount paid for that work was reasonable.”
PMP also over-claimed $97,153 in fringe benefits, according to the report. And auditors questioned $129,697 in software development services provided by PBS because the expenses weren’t properly documented.
The OIG made eight recommendations, including that CPB “determine the reasonableness of, or disallow and recover” $2.3 million of labor expenses without adequate accounting records.
In her response to the IG’s findings, Calhoun defended the project’s management and warned that the recommendations “would destroy a project that has evolved over the past decade out of the collective efforts of the [founding members] and other public radio and TV stations and is essential to the future of public media.”
Disallowing the funds would also “be disastrous for future collaborations,” she wrote. “The message to bold new collaborative adventures should not be, ‘Proceed at your own peril.’”
Calhoun requested that the report be revised as guidelines for compliance with financial reporting standards for the PMP and other recipients of CPB grants backing collaborative projects.
CPB management has 90 days to respond to the report’s recommendations, after which the document returns to the IG for final comments. PMP will receive notification of the outcome within 180 days.
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