A draft audit by the CPB Inspector General’s office found that WLRN in Miami overstated nonfederal financial support in fiscal years 2013–15 by more than $7.3 million.
Inspectors cited discrepancies including WLRN’s claim that revenue from a commercial spectrum deal with its licensee, the School Board of Miami–Dade County, was NFFS-eligible.
Among the IG’s recommendations is that the pubcaster return $784,018 in resulting Community Service Grant overpayments to CPB.
In response, GM John LaBonia said the spectrum-lease funds were correctly characterized as NFFS because the revenue was not given directly to WLRN. He also said that the station had made “significant progress in improving its processes” since the IG audit was conducted. Changes include implementing new internal controls and securing an agreement with Friends of WLRN, the station’s nonprofit fundraising arm, to increase oversight of financial processes and reporting.
The IG also recommended that CPB “apply appropriate penalties” to WLRN for its noncompliance with CSG reporting requirements. But LaBonia replied that such financial penalties would “stretch and jeopardize WLRN’s ability to continue to serve its community and surely result in significant cutbacks in terms of both service and staff.”
The audit is the second of two IG reports following the ouster of the Friends organization’s CFO. A new accountant working for WLRN late in 2016 discovered that Jorge Perez-Alvarez had been incorrectly reporting underwriting revenues since FY08. WLRN notified CPB in February 2017 of the problem and fired Perez-Alvarez soon after.
The IG’s first report examining the situation, issued in September 2017, examined the misreported underwriting revenues. Its recommendations included that CPB recoup $1.1 million in CSGs. In its response, CPB agreed to that finding. The latest report focused on NFFS revenues reported during the same period.
CPB management has 90 days to reply to the IG’s latest findings.