Auditing Communication Act, Accounting, & NFFS Requirements Office of Inspector General PMBA Presentation May 2015 Background Station audits routinely identify noncompliance issues with Communication Act, accounting, & NFFS reporting requirements. Findings include: • Adequate advance notice of public meetings • Financial records not available for public inspection • Community Advisory Board issues • Documenting practices for complying with Act requirements • Lack of discrete accounting for CSG funds • Over-stating NFFS Auditing Communication Act Requirements Audit Criteria - Certification Requirements for Station Grant Recipients • • • • • • open meetings, open financial records, Community Advisory Board (CAB), employment statistical information, donor lists and political activities, and written procedures documenting practices. Historical Audits September 1999 – March 2015 Audit Coverage: 83 stations – 56 (67.5%) non-compliant with at least one of the five Act requirements – 39 Community Stations – 32 University Stations – 12 Government Stations – 36 Radio Stations – 24 TV Stations – 23 Radio & TV Stations Radio & TV Stations Not Fully Meeting Act Requirements September 1999 – March 2015 Community Requirements State University Total No. % No. % No. % No. % Timely Notification of Meetings 20/39 51% 5/9 56% 8/18 44% 33/66 50% Quarterly Notification of Meetings 17/38 45% 3/9 33% 7/17 41% 27/64 42% Open Financial Records 18/38 47% 6/12 50% 10/32 31% 34/82 41% CAB Not Established or Meeting 7/38 18% N/A N/A 0/5 0% 7/43 16% EEO Reporting 8/37 22% 3/12 25% 2/29 7% 13/78 17% Procedures Not Documented 24/31 77% 8/8 100% 18/23 78% 50/62 81% Comparison of PMBA Presentations on Noncompliance Rates 2005 PMBA 1999- 2005 Requirements 2015 PMBA 1999-2015 No. % No. % Open Meetings 8/19 42% 33/66 50% Open Financial Records 4/19 21% 34/82 41% CAB Not Established or Meeting 1/8 13% 7/43 16% Annual Certification of Compliance with General Provisions CPB’s Radio & Television Community Service Grant Legal Agreement: – Requires grantees to annual certify its compliance with grant General Provisions and Eligibility Criteria. – “That Applicant recognizes any false information provided may subject Applicant to penalties under the Federal False Claims Act, 31 U.S.C. §3729-3733.” – A station’s compliance is subject to audit by the Inspector General, and improper certifications may result in penalties under the Federal False Claims Act. Documenting Compliance • Open Meetings – 7 days advance notice of meetings of governing board, committees of the board, and the Community Advisory Board • Web posting announcement of public meetings (retain hard copy or electronic copy of screen shot of announcement with date posted to web to evidence 7 days advance notice) – Copy of open meeting minutes to evidence quorum & deliberations – Closed meeting notice requirement • Written explanation of why meeting was closed citing reasons allowed under the Act for closing a specific meeting – Quarterly on-air announcement of open meetings policy • Public service announcement logs of the dates announcements were made and the text of the announcements Documenting Compliance (continued) • Open financial records – Audited financial statements – Annual Financial Report or Financial Summary Report – Other CPB grant financial reports submitted to CPB during the fiscal year of the audited financial statements • CAB – Meetings were held and a quorum was present – Operated independently on its own schedule and set its own agenda Documenting Compliance (continued) • CAB (continued) – Advised governing board that programming was meeting the specialized educational and cultural needs of the communities (including recommendations to meet those needs) • Employment Statistical Information – Make available the employment portion of the Stations Activity Benchmarking Study (SABS) or the annual Stations Activities Survey (SAS) Documenting Compliance (continued) • Employment Statistical Information (continued) – EEO information must be made available to the public at every station location with more than five employees • Donor List – Station practice (controls) for not sharing member or donors names with political parties – Station practice (controls) for sharing membership or donors names to any nonaffiliated third parties Documenting Compliance (continued) • Donor Lists (continued) – Opt-out practices (controls) if station shares information did the station: • Disclose to member/donors beforehand that personal information may be shared and gave the member or donor the option not to have their personal information shared with nonaffiliated third parties • Periodically remind members and donors that personal information may be shared with nonaffiliated third parties and that members/donors could request that their information not be shared Auditing Accounting Requirements Audit Criteria: CSG General Provisions & Eligibility Criteria requires discrete accounting of CPB revenues & expenditures. • • • Discrete accounting requires a unique code that identifies CPB revenues & expenses (restricted & unrestricted), so grantor & auditor can discretely track those funds in accounting system. No requirement to segregate CSG funds in separate bank accounts. Co-mingling is allowable as long as accounting system can easily identify transactions associated with CSG grant. Non-Compliance with Accounting Requirement September 2007 – March 2015 Community Requirements Lack of Discrete Accounting State University Total No. % No. % No. % No. % 19/28 68% 5/8 63% 7/22 32% 31/58 53% Auditing NFFS Requirements Audit Criteria: CPB Financial Reporting Guidelines address reporting Non-Federal Financial Support (NFFS) on the Annual Financial Report (AFR) or Financial Summary Report (FSR) • Contributions vs. payments; • NFFS criteria (i.e., recipient, form, source, purpose); • Federal funds; • Revenues that do not qualify due to policy restrictions, • Restrictions on TV digital capital investments • Underwriting • In-kind contributions • Indirect administrative support Auditing NFFS Requirements September 1999 – March 2015 Audit Coverage: 54 stations – 40 (74.1%) non-compliant with at least one of the NFFS requirements Noncompliant Revenues No. Percent In-kind Contributions 25/54 46.3% Exchange Transactions 10/54 18.5% Federal or Public Broadcasting 9/54 16.7% Auction / Special Fundraising 9/54 16.7% NFFS Compliance • In-kind Contributions – lack of documentation of receipt of goods and services provided by donor & unallowable trades excluded due to policy restrictions • Exchange Transactions – payments in exchange for services provided by public broadcasting (source & purpose) • Federal or Public Broadcasting Revenues – unallowable source of revenues • Auction / Special Fundraising – revenues not off-set by cost of events NFFS Compliance Other multiple exceptions to NFFS criteria: • • • • • Institutional indirect administrative support (7.4%) TV digital capital investments (5.6%) Uncollectible underwriting (5.6%) Unrelated business income (3.7%) Presenting fees (3.7%) OIG Contact Information • Bill Richardson, Deputy Inspector General brichardson@cpb.org, (202) 879-9661 • OIG Office: (202) 879-9669 • OIG Hotline: (202) 879-9728 or (800) 599-2170, (202) 8799699 (fax), http://www.cpb.org/oig/contact.php online complaint form • OIG Email: oigemail@cpb.org