LAS VEGAS — Board members and the new interim CEO of Nevada Public Radio are continuing to investigate the financial meltdown revealed last month that almost led to the station’s collapse.
“We were very close to having to shut the doors,” said interim CEO Jerry Nadal in an interview with Current. The station disclosed Sept. 6 that it was facing “significant business challenges” and “severe cash flow issues.” It revealed that CEO Flo Rogers had resigned and that it was laying off all four staffers at NV89, its Triple A outlet in Reno.
Nadal said the station’s board wasn’t fully aware of the financial crisis until a meeting Aug. 7. “I don’t know what happened to get to this point and why it wasn’t evident,” he said.
The station hired a forensic accounting firm and is working to settle debts with vendors, he said. Forensic accounting firms are often used to obtain evidence that could be used in legal proceedings.
Board members jumped into the fray as soon as they realized something was amiss and have been working nonstop to tackle the problems, said board chair Anthony Pearl at an Oct. 2 meeting.
The station is also tracking down invoices that had not been paid, some since January, according to a president’s report distributed at the meeting.
“It’s premature to update the public or the press or the community at large about our findings or about what we’re going to do going forward, because our review of the financial records and the records in general is ongoing,” Pearl said.
“We’ve done a lot in a very short period of time,” he said. “I think … the larger community doesn’t have visibility into how much has gone on.”
According to board members and meeting minutes, Nevada Public Radio’s board had encountered delays over the summer in receiving up-to-date financial information from station personnel. Draft minutes of the Aug. 7 meeting say that Rogers and Michelle LaBonney, then the station’s business manager, addressed the board about a newly implemented accounting system. LaBonney discussed “challenges” that had delayed financial reporting in June.
Station staff said the transition in accounting systems prevented them from providing the board with detailed financial information, according to board member Renee Yackira at this month’s meeting. Lacking those details, board treasurer Kathe Nylen provided a summary instead of a more detailed presentation, Yackira said.
Discussion of that summary and the new accounting system “led to some of the questions” that resulted in board members discovering the severity of the financial situation a couple of weeks later, Yackira said.
LaBonney, who has since left the station, did not respond to a request for comment. Rogers, who stayed on to advise the station until Sept. 23, referred questions to the station’s PR firm.
Since the August meeting, the board has also worked to cut spending, analyze station finances and communicate with vendors about the situation. Nevada Public Radio is reviewing possible sales of the Reno station and signals in Carson City and St. George, Utah.
Nadal told Current that to protect against further financial difficulties, the board is also reviewing its own responsibilities and the station’s internal controls and governance structure.
According to IRS tax filings, the station had been spending more than it earned every fiscal year from FY10 to FY17. In FY17, the most recent year for which documents are available, it reported $7.3 million in functional expenses and about $6.8 million in revenue.
But Nadal said he didn’t view the station’s financial position as unusual before August because it had a rainy-day fund and was raising additional funds to cover expenses. That rainy-day fund has been exhausted, Nadal said in a Sept. 26 interview on Nevada Public Radio.
Nadal now aims to increase the station’s membership to 15,000 by the end of its fall fundraising drive, which began Oct. 1. It had just over 11,600 members at the start of the month. Station hosts are also asking listeners to help with contributions.
If Nevada Public Radio can’t reach 20,000 members by spring, it will have to look for other sources of income and perhaps adjust programming, Nadal said.
“We can’t sustain the amount of programming we have for 200,000 people listening with 12,000 people supporting,” he said. “It just doesn’t work with a public radio model, so we’re trying to do a bit of education process for the audience, too.”
As one cost-saving measure, Nevada Public Radio is cutting back on issues of Desert Companion, its monthly arts, culture and community magazine. Nadal said the station will scale back publication of Desert Companion to eight issues a year and may reduce staff.
Decisions about further cuts or layoffs will come after the budget review, which Nadal said he aims to have completed in November. He said he did not anticipate “significant” cuts.
Nadal will appear again on the station’s broadcast “when more is known about the state of NvPR’s financial situation,” according to the president’s report shared at the board meeting.