When the U.S. Attorney’s Office for Massachusetts announced a settlement with Boston’s WGBH over its handling of $60 million in federal grant funds, it was the second time in two years that a major producing station had come under scrutiny by auditors for its handling of grant monies for public TV productions.
WNET’s accounting problems have cost it $1.96 million out of a series of production grants totaling $13 million, following a two-year federal investigation of the big New York station’s grant accounting. Federal lawyers and the licensee — Educational Broadcasting Corp., now officially known as WNET.org — signed a settlement in which the station gave up 15 percent of the grant money:
$950,000 to be paid back to the feds for inadequately documented or prohibited costs, and
$1,015,046 that the station has spent on the productions but agreed to give up. By the time of the settlement, the growing sum of unreimbursed expenses had cut a $7.8 million hole in the station’s financial fabric. To keep federally backed productions going, the nonprofit continued spending money on them but stopped asking for reimbursements. Robert Feinberg, general counsel, said it was a voluntary decision by the station: “If we have done something wrong, we didn’t want to compound the error.”
The leadership of WNET said a federal investigation into the station’s use of federal grants totaling almost $13 million is wrapping up, and the organization is financially sound. “There was sloppiness as opposed to real wrongdoing in terms of our accounting systems, which has been addressed,” said James Tisch, chairman of the WNET Board, in an interview. The station has hired a new chief financial officer and created the position of executive director, financial control, to ensure compliance with federal grant rules, said Neal Shapiro, president. “We have a new CFO. We have a new compliance person to make it very clear we take all these rules very seriously,” Shapiro said.