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.
This item has been updated and reposted with additional information. WGBH has agreed to pay more than $300,000 in a civil settlement with the U.S Attorney’s Office to resolve allegations that it improperly tracked and accounted for federal grant money, The Associated Press is reporting. U.S. Attorney Carmen Ortiz told AP that from 2005–08 the Boston pubcaster maintained an inadequate accounting system for tracking grant expenditures. The settlement, announced Thursday, is for damages incurred by the National Science Foundation, the National Endowment for the Humanities and the National Endowment for the Arts. WGBH spokesperson Jeanne Hopkins told Current that the settlement involves a payment equal to the error rate of half a percent to one percent of the total value of the grants, which was $60 million.
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.
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.