Semiannual Report Office of Inspector General Operations and CPB Audit Resolution Activities

Cpb

Informations

• Publié par: Chyok
• Nombre de lectures: 26
• Langue: English

Extrait

 

    CORPORATION FOR PUBLIC BROADCASTING         SEMIANNUAL REPORT   OFFICE OF INSPECTOR GENERAL OPERATIONS   CPB AUDIT RESOLUTION ACTIVITIES               October 1, 2009 to March 31, 2010

Inspector General’s Semiannual Report Corporation for Public Broadcasting  

  FOREWORD  

    Congress created the Corporation for Public Broadcasting (CPB) in 1967 as a private nonprofit corporation chartered in the District of Columbia to promote non-commercial public telecommunications. In authorizing CPB, Congress made it clear that noncommercial television and radio in America, even though supported by Federal funds, must be absolutely free from any Federal Government interference beyond the mandate in the legislation. A nine-member Board of Directors (the Board) was established to govern CPB, set policy, and establish programming priorities. The Board is expected to have broad representation from throughout the country. Board members are selected from among citizens of the United States who are eminent in fields such as education, cultural and civic affairs, or the arts, including television and radio. Each member is appointed by the President and confirmed by the Senate for a six-year term.   CPB is the largest single source of Federal funding for public television and radio programming. It provides financial support and a variety of services to more than 1,000 public television and radio stations nationwide. This support ensures that stations can exchange program materials through a national interconnection system. In addition, CPB initiatives seek ways to help public television and radio stations serve their communities more efficiently and effectively. This involvement makes possible diverse and innovative programs that are educational and locally relevant. CPB also gives grants to organizations and to individual producers for the production or acquisition of new programs for public television and radio. These activities help provide universal access to the public broadcasting system.   CPB receives nearly all of its funding from Congress. Funds are appropriated two years ahead of the fiscal year they are to be spent. This advanced funding provides stability for the planning and funding of long-term programs and projects. CPB’s total Federal appropriations for Fiscal Year (FY) 2010 were approximately $522.8 million. This includes the general Federal appropriation and special appropriations for digital transition and radio interconnection, as well as, $15 million for CPB Emergency Station Funds. CPB must spend at least 95 percent of its general Federal appropriation on grants/contracts to television and radio stations, producers of programs, and educational services, as well as, for general system support. The balance of the general Federal appropriation, up to five percent, may be expended for internal CPB operations. Additionally, CPB’s grant from the U.S. Department of Education, for the Ready To Learn program, was approximately $16.8 million.   In 1988, Congress passed amendments to the Inspector General Act (IG Act) requiring that CPB, as one of a number of designated federal entities, have an Office of Inspector General (OIG). In this regard, CPB’s OIG is an independent component of the organization, reporting to the Board through its Audit and Finance Committee. In addition to reporting to the Board, the IG Act requires that the Inspector General and the

October 1, 2009 to March 31, 2010  

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Inspector General’s Semiannual Report Corporation for Public Broadcasting   head of the CPB each report semiannually to Congress and the public regarding OIG operations and activities. Since CPB is a small organization, we have combined these separate reporting requirements into one joint report. The OIG’s report section is titled “Office of Inspector General Operations” (page 1) and CPB’s report section is titled “CPB Audit Resolution Activities” (page 15).   The IG Act reporting requirements are listed below, along with a page reference where more detailed information is provided .       Index of IG Act Reporting Requirements      IG Act Reference OIG Reporting Requirements Section 4(a)(2) Review of Legislation and Regulations Section 5(a)(1) Significant Problems, Abuses, and Deficiencies Section 5(a)(2) Recommendations With Respect to Significant Problems, Abuses, and Deficiencies Section 5(a)(3) Prior Significant Recommendations Not Yet Completed Section 5(a)(4) Matters Referred to Prosecutive Authorities Section 5(a)(5) Summary of Instances Where Information Was Refused or Not Provided Section 5(a)(6) List of Audit and Inspection Reports Issued Section 5(a)(7) Summary of Each Particularly Significant Report Section 5(a)(8)b Statistical Table Showing The Number of Audit Reports and Dollar Value of Questioned Costs Section 5(a)(9) Statistical Table Showing the Number of Audit Reports and Dollar Value of Recommendations that Funds Be Put To Better Use Section 5(a)(10) Summary of Audit Reports Issued Before the Start of the Reporting Period for Which No Management Decision Has Been Made by the End of the Reporting Period Section 5(a)(11) Description and Explanation of Reasons for any Significant Revised Decisions by Management During the Reporting Period Section 5(a)(12) Information Concerning Significant Decisions by Management With Which the Inspector General is in Disagreement    CPB Management Reporting Requirements Section 5(b)(2) Statistical Table Showing the Total Number of Audit Reports and Results From Disallowed Costs Section 5(b)(3) Statistical Table Showing the Total Number of Audit Reports and Results From Recommendations that Funds Be Put to Better Use Agreed to in a Management Decision Section 5(b)(4) Summary of Audit Reports Where Final Action Has Not Been Completed Within One Year of Management Decision  

October 1, 2009 to March 31, 2010  

    Page None 4-7   4-7 11 & 18 None   None 2 4-7   10   10     11   None   None     16     17   18

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TABLE OF CONTENTS

 

           

 

           

        FOREWORD              OFFICE OF INSPECTOR GENERAL OPERATIONS    MESSAGE FROM THE INSPECTOR GENERAL   OIG OPERATIONS IN THE CURRENT PERIOD   AUDIT & ASSISTANCE ACTIVITIES   INVESTIGATIVE ACTIVITIES    OIG STAFFING & ORGANIZATION CHART       CPB AUDIT RESOLUTION ACTIVITIES    MESSAGE FROM CHIEF FINANCIAL OFFICER AND TREASURER    RECOVERING DISALLOWED COSTS    RECOVERING FUNDS PUT TO BETTER USE         CORRECTIVE ACTIONS NOT COMPLETED WITHIN ONE YEAR OF A MANAGEMENT DECISION  

   

 

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Inspector General’s Semiannual Report Corporation for Public Broadcasting   OIG Operations in the Current Period     The following table presents our accomplishments during this 6-month semiannual reporting period.   Reports Issued for the Period Ending March 31, 2010      Total  s Put D R a e t p e  o I r s   t  s N u o e . d /   Tit   l Que C s o ti s o ts n   ed Uns C u o p   s p t o s r   ted  F t u o  n B d etter  e  Use    udits Audit of CPB Grants Awarded to WHYY M A a S r J ch 9   0 3 4 0 - , 1  2 0 0 0 1 1  0  I P n e c n or n p s o y r lv at a e ni d a ,  ,  P fo h r il   a Fi d s e c lp al h   i Y a e ,  ars 2007 and  $24,589 $24,589 $179,592  2008 ASR911-1002  E E x d a u mination of Northwest Communities’  March 31, 2010  cation Center, KDNA-FM, for Fiscal $58,587 $0 $30,723 Year 2008     The IG Act, as amended, established the reporting requirements and terminology used in this report. To facilitate the reader’s understanding of the reporting terminology, we offer the following explanations.   The term “questioned cost” means a cost is questioned by the auditor as an alleged violation of a law, contract, grant, or other agreement governing the expenditure of funds. A cost can also be questioned when it is not supported by adequate documentation. This type of “questioned cost” is also known as “unsupported cost.”   The term “funds put to better use” meansa recommendation that funds could be used more efficiently if management took corrective action, e.g., reducing future outlays, de- obligating funds from a contract or grant, or taking other recommended corrective actions.   The term “management decision” means a decsiion made by CPB management after evaluating the findings and recommendations contained in the audit report. The findings and recommendations can be either monetary or non-monetary in nature. In the case of a monetary “questioned cost” fni ding, the “management decision” will either disallow the questioned cost or decide to allow the cost. When recommended questioned costs are sustained by management’s decision, these are reported as “disallowed cost” in the Semai nnual Report to Congress.   The term “final action” means that all the corrective actions identified in the  “management decision” have been completed. Inthe case of questioned costs, that means that all questioned costs sustained in the “management decision” have been refunded to CPB. Similarly, in the case of non-monetary findings, all recommended

October 1, 2009 to March 31, 2010

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Inspector General’s Semiannual Report Corporation for Public Broadcasting  

corrective actions have been implemented by CPB, a contractor or grantee and have been accepted as complete by CPB management.

October 1, 2009 to March 31, 2010

 

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Inspector General’s Semiannual Report Corporation for Public Broadcasting   Audit & Assistance Activities     SIGNIFICANT REPORTS ISSUED   Audit of CPB Grants Awarded to WHYY Incorporated, Philadelphia, Pennsylvania, for Fiscal Years 2007 and 2008, Report No. ASJ904-1001, Issued on March 30, 2010   The objectives of the audit were to determine whether WHYY: a) claimed Non-Federal Financial Support (NFFS) in accordance with CPB Financial Reporting Guidelines; b) complied with the Certification of Eligibility requirements and the statutory provisions of the Communications Act of 1934, as amended; and c) expended CPB grant funds in accordance with grant agreement requirements.   We found that WHYY complied with CPB Guidelines for reporting NFFS on its Annual Financial Reports (AFR) submitted to CPB, except for $403,514 that was improperly claimed as direct revenue contributions on its Television FY 2007 and 2008 AFRs, $323,696 and $79,818, respectively. This over-reporting of NFFS resulted in CPB making excess CSG payments totaling $30,033 in FY 2009, and will result in excess payments of $7,518 in FY 2010 payments. We classified this amount as funds put to better use for reporting purposes.   Our examination of CPB   grant expenditures identified $24,589 of unsupported costs that we questioned. We also identified grant funds totaling $142,041 that needed to be de-obligated. Of this amount, $29,793 was encumbered unnecessarily for over 18 months after the project ended. We also found that WHYY did not keep CPB adequately informed of important project changes in budgeted costs or delays in completing projects. These notifications are essential to enable CPB to adequately administer grants. As a result, we identified an additional $112,248 that could have been de-obligated. We classified the cost savings attributable to funds that needed to be de-obligated as funds put to better use. We also identified another $235,806 in CPB funds paid to WHYY in accordance with the grant agreement terms that could have been held by CPB until needed by WHYY because of project delays.   Further, WHYY did not maintain discrete accounting of its CPB grant funds in accordance with CPB guidelines. Finally, WHYY was not in full compliance with the open meetings requirements of the Communications Act and they had not prepared all of the implementing policies required by the Act.   In response to the draft report, WHYY management did not agree with the $24,589 in questioned costs. However, they did agree with our findings regarding reporting non- federal financial support, Communications Act compliance, and the need for discrete accounting of CSG funds.      

October 1, 2009 to March 31, 2010

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Inspector General’s Semiannual Report Corporation for Public Broadcasting   Recommendations     Our report contained four recommendations to CPB management that included the following issues:   •  recovering $24,589 in questioned costs; •  recovering $ 9,793 in unused funds on the PCF grant and de-obligating $29,793 encumbered under the grant;   • de-obligating $112,248 on the open DDF Rounds 10, 11, and 11 Priority 2 grants; •  requiring WHYY to submit revised Television AFRs, Schedules A and C, eliminating unallowable direct revenues for Fiscal Years 2007 and 2008; •  recovering $30,033 in excess CGS payments made to WHYY based on the FY 2007 reported NFFS; •  using the revised 2008 AFR to recalculate the station’s 2010 CSG award;  requiring WHYY to fully comply with all requirements of the Communications Act • and provide CPB documentation of its compliance; and •  requiring WHYY to comply with CPB’s discrete accounting requirements and provide documentation demonstrating how CPB expenditures will be matched to CPB revenues.   CPB Response   CPB’s management decision on our recommendations is due by September 30, 2010.     Examination of Northwest Communities Education Center, KDNA-FM, for Fiscal ’ Year 2008, Report No. ASR911-1002, Issued on March 31, 2010   This examination was initiated in response to complaints alleging the Northwest Communities’ Education Center (NCEC), licensee of KDNA-FM (KDNA), was ignoring CPB requirements under the Public Broadcasting Act. The complainants alleged that station officials did not comply with CPB requirements related to:   •   open public meetings; and •   open financial records requirements.    The objectives of this examination were to determine whether KDNA: a) claimed Non- Federal Financial Support (NFFS) in accordance with CPB Financial Reporting Guidelines (Guidelines); b) complied with the Certification of Eligibility requirements and the statutory provisions of the Communications Act of 1934, as amended; and c) expended CPB grant funds in accordance with grant agreement requirements.   Based on our examination, we found that NCEC did not materially comply with CPB requirements to expend CPB restricted grant funds on allowable activities, accurately

October 1, 2009 to March 31, 2010

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Inspector General’s Semiannual Report Corporation for Public Broadcasting   report NFFS, or fully address Communications Act requirements. Specifically, we found:   •  Questionable restricted expenditures of $58,857, because these funds were spent to produce local programming instead of national programming. •  NFFS was over-stated by $494,539 in FY 2008, resulting in potential CPB overpayments of $30,723 during FY 2010, which we have reported as funds put to better use. •  KDNA’s CPB recordkeeping did not fully account for FY 2009 CSG revenues or any FY 2009 CSG expenditures incurred during calendar year 2008. •  Station officials’ responses to multiple public requests for information about upcoming public board meetings and financial information were neither timely nor adequate to meet the intent of CPB requirements to provide information to the public. Additional requirements of the Communications Act were also not complied with for open public meetings, open financial records, records made available to the public on Equal Employment Opportunity statistics, and donor list and political activities prohibitions.   In response to the draft report, KDNA officials generally agreed with our findings on NFFS reporting and compliance with the Communications Act requirements, but provided a rationale for claiming the restricted funds questioned of $58,587. KDNA’s response also said that it was important to recognize the significant challenges NCEC/Radio KDNA had experienced over the last 18 months. Major staffing and leadership changes along with external community issues had caused operational instability for NCEC/Radio KDNA. Officials anticipated significant operational improvements by early May 2010.   Recommendations     Our report contained 12 recommendations to CPB management that included:   •  recovering $58,587 in questioned costs on restricted funding that was not used to pay for national programming and establish controls to ensure future restricted funds are only spent on qualified national programming; •  recovering $30,723 in potential CPB over-payments because of over-reported FY 2008 NFFS; •  requiring KDNA to submit a revised Annual Financial Report, Schedule A for FY 2008, eliminating the questionable direct revenue reported to CPB of $494,539, and establish internal controls over the preparation of the AFR to ensure only allowable contributions are reported as NFFS; •  requiring KDNA to reconcile the differences in CPB income and correct its CY 2008 accounting records to properly record CPB income and record FY 2009 CPB expenditures in the accounting system; •  requiring KDNA to revise or establish written policies to address its Communications Act responsibilities;

October 1, 2009 to March 31, 2010

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Inspector General’s Semiannual Report Corporation for Public Broadcasting  

•  retaining documentation of station’s compliance with Communications Act requirements and providing copies to CPB of its compliance; and •  withholding CPB’s second CSG FY 2010 installment payment of $104,161 to KDNA until the station adequately demonstrates it has responded to all public requests for information received since June 2009 under the Communications Act.   CPB Response     CPB’s management decision on our recommendations is due by September 30, 2010.  

October 1, 2009 to March 31, 2010

 

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