Sacramento State University has taken over the operations of Capital Public Radio following an audit that unveiled severe financial mismanagement. The audit was prompted by the university after irregularities were noticed in CapRadio’s financial statements.
Among the audit’s findings were unapproved loans amounting to over $1.1 million, mismanaged credit cards, and unauthorized acceptance of gifts. The audit also revealed that the station’s liabilities had surged to more than $27.2 million, compared to about $5.5 million the previous year.
CapRadio, which recently laid off 12% of its workforce and is facing cash flow issues, is now subject to a series of changes outlined by Sacramento State President Luke Wood. These reforms include transferring the responsibility for CapRadio’s accounting, endowment, and financial operations to the university, as opposed to CapRadio management and its board of directors. However, CapRadio’s journalistic independence will be maintained, with the chief content officer still being an employee of CapRadio.
Further investigations into the station’s financial troubles are planned, with another “forensic examination” expected to be completed early next year. This move follows a series of challenges for CapRadio, including financial difficulties arising from the pandemic, declining revenue, and construction expenses for its new downtown headquarters and performance space.
The university’s intervention aims to rebuild CapRadio’s financial and operational stability while maintaining its value as a community asset. The university also owns the license for CapRadio’s stations, KXJZ and KXPR, and CapRadio also operates North State Public Radio, with stations owned by Chico State.
