An Analysis of the WPFW Expenditures for the following years:
October 2010 – September 2011
October 2011 – September 2012
October 2012 – March 2013
Jean Yves Point-du-Jour, Chair
WPFW Local Station Board
In collaboration with:
Marcus Jetter, LSB Treasurer and Chair
WPFW LSB Finance Committee
Luzette King, Member WPFW LSB and
Pacifica National Board Director
June 12, 2013
- 1. Goals of the financial inquiry
The goals of the financial inquiry are as follows:
a) The WPFW Local Station Board (LSB) needs to have a good idea of how the money collected has been managed.
b) There is a need to show and to explain to the various WPFW communities the nature of WPFW expenditures, particularly the programmers who play a critical role during fundraising drives.
c) The financial report will help to address future budget needs and will help in the budget development process.
d) This inquiry will also help identify flaws and expose risks in the management of finances. This will also lead to recommended corrections.
e) Finally, this will help restore credibility in the process and inspire confidence in WPFW financial management.
- 2. The Request
Since the beginning of this new structure of Pacifica and certainly for the past two and half years, it has been difficult to have a good assessment of the financial situation of WPFW. Last year in particular, Marcus Jetter, the WPFW LSB Treasurer and Finance Committee Chair, had a hard time obtaining financial information from John Hughes, the WPFW General Manager and Robert West, the WPFW Business Manager. Marcus often lamented the lack of support from the then Chair of the LSB, Tony Norman. He was so frustrated that it became though for him to ask the LSB to vote for the last WPFW budget since he could not verify the numbers listed in the submitted spreadsheet based on lack of credible and verifiable financial information.
In January 2013, the WPFW LSB elected a new Chairman who has vowed to address the situation. In April 2013, the new LSB Chair, Jean Yves Point-du-Jour requested two quarters of financial information from October 2012 to March 2013, from the WPFW General Manager. After much delaying tactics from the General Manager and with the intervention of the Pacifica Interim Executive Director, Summer Reese and PNB Director Luzette King, the LSB Chair, the Treasurer and the PNB Director and I were given access to six months of bank statements. The General Manager was notified that the information was incomplete and more data were needed. Again after much delay and effort to block the request, John Hughes was asked by the IED and the CFO to grant access to the data.
Then, the Chair requested two years of financial information in order to have a good assessment of WPFW financial health. John Hughes started the same delaying tactics. First he sent an email to the Chair saying that he had asked Robert West to satisfy the demands. I replied that I am not dealing with Robert West but with the General Manager. After not hearing from him for a week or so, again I solicited and obtained the help of PNB Director Luzette Ling who requested a Director’s inspection. John Hughes tried all he could to avoid given us access to this information. He asked for reasonable time based on the Bylaws. He claimed that he was afraid that social security numbers and check routing numbers will be seen and used. Another reason for denying access is the fact that he did not have the key to the cabinet where the information is being kept and that Robert West is the one with the key. Again, he was ordered by Pacifica to hand over the financial information to Luzette, Marcus, and the Chair. So on Friday May 24, 2013 at around 1PM, Luzette, Marcus, and the Chair were given a box containing two years of financial information.
This is the first time in decades that the station board, staff, the listening community and the programmers have had such detailed and full account of expenditures. We have to remember that WPFW is part of the Pacifica Foundation which operates as a non-profit foundation and collects public funds for its operations.
- 3. Financial Management Process
At the station, three people are involved in the WPFW Financial transactions:
1. All the checks are signed by Tiffany Jordan, the Development Director. She is the one who receives all incoming funds from the pledge drives and other means of collecting money. She then deposits all the money whether cash or checks in the bank. She only signs the checks and does not keep any documentation on the checks that she signs. When I showed her the bank statements, she stated that she has never seen them. However, she keeps documentation on all incoming transactions.
2. John Hughes, the General Manager, does not sign checks. He has refused to do so when he became General Manager. John always claims no to have any knowledge of the financial state of WPFW. Anytime he is asked to make a decision, he always said that he will refer to Robert West, the Business Manager. His General Manager’s role in the financial management of the station in unclear and deserves some explanation.
3. Robert West is the Business Manager. He is supposed to work according to John Hughes four to twelve hours per week. He is hardly seen at the station. He is the one who writes all the checks, receives the invoices, and keeps all receipts and documentation. He also pays the bills. He receives all requests for payments and has full and seemingly full control over the money. He does not attend meetings. He always has an excuse.
Who has the final say as to who authorizes the payments is not clear. But technically, the General Manager is responsible overall for all financial decisions.
- 4. Data Analysis/Observations
Two and a half years of financial expenditures have given a clear picture of how the money collected has been managed. It reflects how we have been meeting our financial obligations. The data also show the priorities in order to keep the radio station properly running.
A lot of money been spent on premiums. There needs to be a strategy on selecting and acquiring premiums. Also, there ought to be a cost/benefit analysis of premiums. The question that should be asked is: of what financial benefit are the premiums to the station? This is crucial particularly when we spend so much money acquiring premiums/gifts from shows such as Gary Null’s and Democracy Now.
From October 2010 to August 2011, we were meeting our financial obligations. The bills were being paid on time. After August 2011, things started to change. We started skipping bills. The fund drives became more frequent. And we have been unable to meet all our monthly obligations to the point where in January 2013, we did not have money to meet payroll requirements.
There is little or no accountability. There is little evidence to show that anyone has, in the last 10 years or so, compiled a list of financial transactions. Few if any has sat down and looked at the numbers and see exactly what they mean.
There is an apparent lack of transparency. The financial reports provided by the General Manager to the LSB during the monthly meetings do not give an accurate picture of what is actually going on. John Hughes never gives a detailed financial report showing monthly income vs. monthly expenses. The Business Manager never attends the LSB meetings. Also, the Business Manager is rarely present at the LSB Finance Committee meetings.
There are no checks and balances. One person is responsible for signing checks and has no idea what she is signing. Another person writes the checks without a clear explanation of the priorities. There needs to be another way of checking and verifying the decisions.
The current process is left open to all sorts of abuse. Decisions can be taken and it can be very difficult to prove that it was a valid operation.
There is no budget monitoring. No one seems to be keeping track as to whether we are under budget or we are spending more than we have. At least, it is not clear that this is happening.
Since John Hughes became Manager, we notice that payroll has been increased and continues to be increased. At the end of fiscal year 2012, the increase is of 80,000 dollars and this without the salaries of the Program and Operations Directors.
It must be noted that the recent move to L Street can result in some savings. For example, there may not be a need to pay janitorial services and parking. Some phone lines can be cancelled. There can also be a substantive reduction in utilities such as electricity.
- 5. Pledge Drives Malaise
The radio station depends on its listeners who provide the major portion of its operational expenses. Until 2010, we used to have 3 major pledge drives and a mini-drive per year. Sometimes, we may have a special drive. Those were only 2 to 3 days and were built around a special theme. Under the present General Manager, the pledge drives have increased in their frequency. As a result, programmers are complaining, the community is not at all happy about it. We have reached a point of listener and community fatigue. The evidence is stark that since the December 2012 programming grid change, the financial situation has worsened even more under this station leadership and is yet to be addressed. The programmers have lost confidence in management and its ability to effectively manage the station. On the other hand, the programmers have complained about the General Manager exhibiting on many occasions a lack of respect and appreciation for them. This has resulted in a tacit rebellion of the programmers towards management. For example, during the last pledge drive that has just ended, the station was only able to raise a total of 241,000.00 dollars of a goal of 400,000.00 dollars. Many programmers decided not to pitch, especially those who usually raise substantial amounts of money. One night during the last drive would depict the lack of respect, General Manager John Hughes confronted an on air host for not pledging and told her that she raises a lot of money during the drives while she was on the air doing her show in the studio.
There is a backlog of premiums that have not been met. Although this situation was there before John Hughes was hired, there has not been a plan to address the backlog. As a result, many listeners object to pledging because past promises of premiums/gifts have not been fulfilled.
There has never been an alternative fundraising plan developed by Management. John Hughes has solely relied on pledge drives to meet the financial needs of the radio station.
The WPFW Local Station Board has organized fundraising events in the past and is currently planning events. Though those funds are helpful, they cannot be substituted for operational funds necessary to run the radio station.
- 6. Conclusion/Recommendations
The current financial management process needs to be evaluated. Corrections are needed to make it transparent and to avoid abuse. There needs to be a level of planning, accountability, and record keeping and reporting. The current management team has seen no need for those financial obligations. The LSB has to intervene to protect the integrity of the process and to bring confidence that the money raised is being properly managed. Changes need to be made. Can we continue to afford a part-time Business Manager who does not meet his obligations?
Financially, the future is not optimistic for WPFW. The station is broke and is in dire financial situation. At the last Finance Committee meeting held last Wednesday, the WPFW General Manager, John Hughes admitted that the situation is serious. He only has enough money to run the radio station for one month. We heard that before but the difference is that this time, many players are saying enough is enough. Knowing the situation with the pledge drives, he does not have many rooms to maneuver. How long can we go from pledge drive to pledge drive while we have been unable to meet the goals and keep on getting worse? The WPFW Local Station Board will have to weigh in on this issue.
Programming has been a big issue and a big part of the current situation. Whatever programming concept (if there is one) that we have now is not working. The station seems to be losing its “sound”. Many complain that they no longer recognize WPFW. The problems arising from the December 2012 grid change must be solved immediately.
What we have presently is a recipe for disaster. Quick intervention of the Interim Executive Director and the Pacifica National Board is needed to save WPFW. They have two choices: 1) continue with the current path and WPFW is bound to fail, or 2) bring in a Management Team that can bring confidence in the programmers, staff and the community and can restore programming integrity in line with the WPFW mission.
No one can later claim that they were not warned of an impending disaster.