April 3, 2025
To our valued listeners and members:
As CapRadio continues our practice of openness and transparency with the community, I am writing today to keep you apprised of developments related to the organization’s past financial issues and continued progress to date.
Earlier this week, the Corporation for Public Broadcasting (CPB) issued its report after conducting its own audit of CapRadio’s financials spanning July 1, 2020, to June 30, 2023. The period audited had been under the oversight of a former general manager currently at the center of a law enforcement investigation regarding his role.
CapRadio and Sacramento State Accounting Services immediately began working with CPB after being notified of the audit in February of last year. In close collaboration with the audit team, we identified the CPB accounting and compliance issues at our organization resulting from past deficient practices in place under the former general manager.
Under new management and leadership, we have taken swift corrective actions and implemented internal controls to prevent this failure in compliance and reporting from happening in the future. I have provided a list of these corrective actions below, and I am proud to say that we are fully compliant with all CPB policies thanks to our collaboration with Sacramento State Accounting Services over the last year.
Due to past noncompliance issues, CapRadio is not currently eligible to receive CPB funding, which is an outcome that we have prepared for. CapRadio has not been receiving CPB funding for the past two years, and we continue to take a conservative approach to budgeting for our future.
With nearly all of our funding coming from individual donations and local businesses, we are focused on sustaining our local public service journalism and cultural programming through community support. At a time when public media faces a growing threat to its future and sustainability, everyone in the community can make a difference in keeping CapRadio’s trusted and respectful news coverage accessible for all.
Thank you for being a valued listener and supporter of CapRadio.
With gratitude,
Frank Maranzino
CapRadio Interim General Manager
Compliance Improvements
CapRadio and Sacramento State Accounting Services have worked together to address the issues identified in the CPB audit, including:
Accounting Practices:
We now use accounting practices that are compliant with applicable GAAP, GASB, FASB, and CPB requirements; we have set up discrete accounting practices to separately track and record revenues and expenditures for CapRadio, NSPR, and KHSU stations; we have controls in place that require supporting documentation for all journal entries, account reconciliation, and batch transactions; we have updated processes to document and retain donation records that comply with auditing requirements; and we have engaged a new third-party financial auditor.
Transactions:
We have updated financial reporting practices to comply with all applicable CPB requirements related to premium offsets and indirect administrative support; we have implemented strict controls for financial transactions, including separation of duties, delegation of authority, and new payment authorization processes; and we have systems in place to properly manage and report “in-kind” donations as defined by CPB.
Public Notice:
We now publish all Board of Directors and subcommittee meeting notices and agendas on CapRadio’s website, ensuring that we maintain proper notice to meet CPB and other applicable state regulatory requirements; we publicly post in-person and virtual attendance options, meeting minutes, and current board roster; and available financial documents are publicly posted and accessible via our website.
