Sacramento State on Monday quietly uploaded a revised version of a forensic analysis examining Capital Public Radio’s finances that, among other additions and changes, updated the total amount of unexplained finances allegedly spent by the station’s former general manager.
The audit conducted by accounting firm CliftonLarsonAllen was published Aug. 5 on Sacramento State’s website , a long-awaited analysis that had been promised to be released early this year. CapRadio is an auxiliary of Sacramento State, which has long held licenses for stations that run from Modesto to the Oregon border.
But the audit was temporarily taken the evening of Aug. 8 down due to “corrections and clarifications” necessary after The Sacramento Bee reported a former board member, flagged in the audit as having a potential conflict of interest, was not on the board at the time of the accusation. The summary of the audit report remained off the university’s website for more than a week.
The audit republished Monday — as well as one released separately last year by the California State University system — laid bare the financial pressures endured by the station as it underwent layoffs and cut programs, prompting Sacramento State to assume operational control of CapRadio, including by overtaking its finances.
Four former CapRadio board members had business contracts arise before the nonprofit station that were approved while they served on the board, according to the audit. The names of board members, CapRadio executives and others have been redacted from the audits, but The Bee earlier this month identified the board members. Documents — such as emails, credit card statements and contracts — have been withheld by Sacramento State.
One former board member, Katherine Bardis-Miry, previously said she recused herself from meetings in which her business was discussed. Bardis-Miry’s husband is part of an ownership group that CapRadio signed a lease with to move into a planned new downtown headquarters at 730 I St.
In a letter atop the updated audit, signed Aug. 14 by principal Jenny Dominguez of CliftonLarsonAllen, the firm notes that in addition to corrections, the new version includes “other information shared with CLA subsequent to the release of the original version of the report.”
Some of the changes were small, such as adjustments to footnotes and the removal of a redaction on the word “spouse.” Others were substantial.
Here is a list of some of the significant changes the new audit includes.
Jun Reina, ‘Subject #1’
The main focus of the audit attempted to pinpoint whether a person referred to in the report as “Subject #1” had personally benefited from financial transactions. The Bee has confirmed the identity of “Subject #1” as the former general manager and executive vice president Jun Reina, as first reported by CapRadio journalists last week.
The total amount of expenses that are unaccounted for have decreased from $774,703.05 to $768,325.34, according to the updated version of the audit — a difference of about $6,400.
The audit found Reina allegedly oversaw these transactions.
“As detailed within this report, CLA determined that a total of $460,831.93 in unsupported payments were either directly disbursed to Subject #1, or Subject #1 made purchases via credit card that were subsequently paid by CPR without corresponding evidence of expense reports and/or receipts.”
There were also $307,493.41 worth of expenses made by CapRadio, also not supported by documentation, that “may have been related to purchases incurred by” Reina, the audit says.
The line items listed in the audit did not change. However, the totals expenses did change, as CliftonLarsonAllen corrected an apparent mathematical error from the original version of the audit.
Former board members’ timelines clarified
The CapRadio board of directors began looking into the 730 I St. location for use as the station’s downtown headquarters at an Oct. 4, 2019 meeting, the updated audit newly reported. This was the board’s first meeting that Bardis-Miry, referred to in the audit as “Board Member #1” attended “as a member of the full board,” after she was appointed in July 2019.
The earlier version of the audit incorrectly stated Bardis-Miry had been appointed to the board in September 2019, and only noted that the board began looking at the I Street location “(a)round the time of Board Member #1’s appointment.”
The audit also now includes language that says The Weiss Group, a business that was formerly flagged as having a potential conflict of interest, is excluded from this finding.
The audit had earmarked The Weiss Group, a management consultant business, as having been paid $4,000 in November 2019 to create and plan a retreat for CapRadio’s board of directors.
Steven Weiss, founder and president of The Weiss Group, said he was not on the board when the contract was drawn, though the audit notes he served as an “active member” of a committee whose name is redacted. He served on the full board prior to entering into business with CapRadio.
He was a member of the CapRadio board from at least January 2018 until October 2018, according to new language added in the updated audit.
According to Weiss’ LinkedIn page, he served on the board of directors for CapRadio from 2007 until 2018. He rejoined in November 2020 — after the contract was enacted.
The audit also says Weiss was an “active member” of a committee in 2019 and 2020. He was “not a member on the full Board of Directors” but was a member of the unidentified committee at the time payment was made to The Weiss Group, the audit says.
Board member allegedly shot down bid process in email
The original Aug. 5 audit stated that Bill Yee, a former treasurer for the board, sought to provide furniture from his business, Western Contract, to CapRadio’s new downtown office at 1010 8th St., according to the audit and The Bee’s previous reporting.
Yee wrote in an April 2021 email that Western Contract offers an aggressive pricing structure and that Yee, as CliftonLarsonAllen auditors phrased it, indicated “there is no need to get information from multiple vendors,” according to the Aug. 5 audit. The audit does not specify the recipients of that email.
The newly updated audit includes a direct quote from that email, in which Yee allegedly wrote how his business was best positioned for business with the station: “My rep mentioned getting information about using multiple furniture vendors? Not sure what that means… (Western Contract) and (manufacturer) have positioned a very aggressive pricing schedule for maximum value and benefit to Cap Radio.”
Both versions of the audit said the contract with Western Contract “was entered into without evidence of undergoing a competitive bid process,” which the audit further notes is necessary under Sacramento State policy for personal property contracts exceeding $100,000 in value.
The contract’s total agreement was for nearly $127,000 and required a $50,000 deposit. A deposit of $58,365 was paid to Western Contract in January 2022. Yee excused himself from CapRadio board meetings when discussions arose about creating a contract with his company, according to The Bee’s previous reporting.
COVID-19 Funding
Sacramento State, which pored over the station’s finances when troubles arose, declared CapRadio may have inappropriately obtained nearly $900,000 COVID-19 tax credit when it does not qualify. The federal government asked the station to return the funds, the original, the Aug. 5 version of audit said.
The original audit also referenced two businesses that helped the station obtain the dollars. The names of those businesses are redacted in the audit. The Bee has not been able to identity the businesses.
But in the new audit, the accounting firm notes in a footnote that CapRadio could, in fact, have qualified for the relief funds. There’s only “limited documentation” available and more research is needed to determine the purpose behind the payments CapRadio made to the businesses that helped, the new audit says.
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