Update 8/26/2015:
Thanks to some detective work, there is an update of sorts on the audit situation.
The payment pulled from KPFA’s bequest fund in July was made to Armanino in the amount of $45,000. Although Pacifica’s lead auditor at Armanino Grant Lam apparently is unaware, Armanino cleared the check.
However the audit has not started. The statement by Grant Lam that no work has been done on the 2014 audit despite it being 60 days past the deadline for both CPB and the Registry of Charitable Trusts at the CA AG Office is correct.
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Pacifica’s fiscal 2014 audit (for the period 10-1-2013 to 9-30-2014) was due to the State of California Registry of Charitable Trusts (which is currently investigating Pacifica for failure to comply with charitable laws) and to the Corporation for Public Broadcasting (which suspended Pacifica from eligible status for public media funding in June of 2014) was revealed on Tuesday night to have been neither paid for nor started, 11 months after the close of the fiscal year and 56 days after the legal deadline for submission to the State.
In July, the Pacifica National Board was informed that the hold-up on the audit was the need to pay a $50,000+ balance due on the 2013 audit. The Pacifica National Board dictated that the payment be made using funds from KPFA’s $941,000 in bequests. The KPFA Local Station Board passed a similar motion in July. The executive director reported to the board the payment was made on July 28th and the audit could be completed as soon as the end of August.
However an email sent by the Armanino LLC accountant responsible for the audit was sent on August 24th to outgoing audit chair Fred Blair. Here is the email which Blair read aloud on the audit committee this evening.
Bizarrely, at Tuesday night’s simultaneous finance committee meeting, Pacifica’s controller Efren Llarinas stated Pacifica had made the payment to the auditor.
As his boss had said back on July 28th as audit committee member William Heerwagon recalled.
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From: Grant Lam [mailto:[email protected]]
Sent: Monday, August 24, 2015 5:17 PM
To: [email protected]
Subject: RE: Status Pacifica FY2014 Audit
Fred,
We have not yet started on Pacifica’s 2014 audit. We were waiting to receive payment from the 2013 audit before determining how to proceed with 2014. As a courtesy to Efren we did make sample selections for revenue testing, but other than that no other work has been performed.
Grant
From: Fred Blair [mailto:[email protected]]
Sent: Monday, August 24, 2015 12:43 AM
To: Grant Lam
Cc: Fred B. Blair
Subject: Status Pacifica FY2014 Audit
Hi, Grant –
I’m under the impression Armanino has started on Pacifica’s FY2014 audit. Is there any status report I can give to the audit committee, which meets this Tuesday? Is there an Engagement Letter we can see?
Thank you.
Sincerely,
Fred Blair – Chair, Pacifica Audit Committee
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The latest example of board majority members and executive staff seeming to blatantly lie to national and local boards and the network’s members about foundation activities goes with this morning’s release of financial statements showing a year to date surplus, not the reported “dire financial crisis” at KPFK that is causing 3 layoffs, cuts to part-time for all other employees and sending the SAG-AFTRA bargaining unit into arbitration with Pacifica, and the statement by the foundation that it was delaying overdue board elections because it “could not” make a $25,000 postal deposit with a mailing house last week.
Have you considered the possibility that Grant Lam’s email may be ambiguous/unclear as to the question later raised as to the fact and/or timing of full payment for the 2013 Audit?
He had not been asked to address any such possible question, and his remark in that respect is simply en passant and subject to more than one interpretation – a point Virginia attempted to raise.
What are they hiding? Why don’t they want to have an audit?