Independent audit uncovers potential conflicts of interest among former CapRadio board members
(FOX40.COM) — Results of an independent forensic examination report into Capital Public Radio show possible conflicts of interests among former board members.
The results of the examination were released Monday and was put together by an accounting firm known as CliftonLarsonAllen LLP (CLA).
CLA was contacted by Sacramento State to conduct the examination following a September 2023 audit that showed financial discrepancies and organizational deficiencies.
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The forensic audit was requested by former Sacramento State president Robert Nelsen. Luke Wood started his tenure as Sac State president in July 2023 — two months before the release of the September audit — but laid out a plan to restore CapRadio’s stability.
Sacramento State is the FCC license holder for CapRadio.
The firm was tasked to examine “several potential avenues of personal benefit” by a former executive and board members of CapRadio along with reviewing leases, contracts, and possible misappropriation of funds.
The review period for CLA was from July 1, 2020 to June 30, 2023 and the report doesn’t make any legal claims or reach conclusions of guilt or wrongdoing.
Review of unsupported payments
In the report, CLA found that a total of $460,831.93 in unsupported payments were either “directly disbursed” to someone referred to as Subject #1 or made purchases via credit card without corresponding evidence of expense reports and/or receipts.
The report finds an additional $307,393.41 in unsupported payments on an American Express card may have been related to purchases made by Subject #1, but statements and supporting documents were not available or could not be located.
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CLA said it reached out to Subject #1 in an effort to inquire about the transactions and that person obtained legal counsel. Subject #1 was scheduled for an interview with CLA on May 24 and was provided a list of possible questions.
When the firm emailed them and their counsel about the interview, the person’s legal team called CLA and informed them that their client didn’t want to participate in the interview and desired to engage in discussions about reimbursement to CapRadio.
CLA said in the report that Subject #1 provided no additional information or documentation regarding the credit card transactions. Conclusions of the transactions could change if the information or documents are provided to CLA by Subject #1.
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Review of leases and contracts
In their report, CLA reviewed leases and contracts included those with local furniture companies. A possible conflict of interest identified in the report was the process of leasing the new CapRadio headquarters in downtown Sacramento on 730 I Street.
“It appears the spouse of a board member at the time held an ownership interest in the property, which, at a minimum, demonstrates at least the appearance of a potential conflict of interest,” the CLA said in the report. “The spousal relationship was not noted in the board meeting minutes.”
CLA said there was no details provided about the board member, who is referred to as Board Member #1, if they were rescued from discussions regarding lease negotiations, which lasted from September 2019 to March 2021. No official motion or vote was recorded related to the final lease discussions.
“Board Member #1 benefitted from the execution of this lease as their spouse is a partial owner in the 730 I St. property,” the report reads.
Read the full forensic examination report below:
2024-final-cla-forensic-reportDownload
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