New audit calls for CapRadio to return grant money over inflated revenue reports
Auditors for the Corporation for Public Broadcasting, a nonprofit that supports public broadcasting through federal funding, found this week that NPR affiliate station Capital Public Radio overstated its revenue by millions of dollars and could be required to pay back nearly $200,000 in grant money.
The Corporation for Public Broadcasting is a nonprofit created by Congress that gives 70% of its funding to television and radio stations across the country. CPB’s Office of the Inspector General, a government watchdog group with auditors inside CPB, parsed through CapRadio’s financials from 2020 until 2023 after media reports documented mismanagement and the California State University system also conducted an audit for CapRadio. The station is an auxiliary of Sacramento State.
CapRadio had received about $3 million in funds across the fiscal years 2021, 2022 and 2023 from CPB, the report said. The audit was released Monday and reported by CapRadio journalists later in the week.
Auditors found the station overstated its financial support and added that the CPB’s audit analysis was limited because the station failed to retain proper documentation and its staff turnover. The conclusions drawn by the inspector general echo limitations encountered by the CSU during its audit and a second forensic examination conducted by a third-party accounting firm, according to the report.
“We classified the net overpayments as funds put to better use for reporting purposes because the funds overpaid to (CapRadio) could have been distributed to other public broadcasting entities,” the auditors wrote.
CapRadio “misreported” about $3.3 million of revenue in fiscal year 2022 and $155,000 in fiscal year 2023, and “overstated” $2.3 million in fiscal year 2021, the audit said, for a total of nearly $6 million. The station reported its financial support as just over $50 million across those three years.
CapRadio’s finances have been heavily scrutinized since the CSU released in September 2023 an audit which found widespread financial mismanagement and a lack of internal controls. Sacramento State — which alerted the CSU to conduct the audit in 2021 — then commissioned a forensic examination that found former general manager Jun Reina is linked to credit cards used to spend about $450,000 for questionable business purchases with no corroborating expense reports.
Reina served as CEO and CFO during the years examined in the audit. He was no longer with the station in June 2023.
CapRadio’s interim CEO and President Frank Maranzino, in a letter to the inspector general, acknowledged “unacceptable deficiencies and poor practices occurred in the past” under Reina, “who is currently at the center of a related law enforcement investigation regarding his role.” The station has adopted proper accounting practices, updated financial reporting practices to comply with all applicable CPB requirements and implemented internal controls, Maranzino wrote.
Auditors noted the station’s extensive plan to relocate to downtown Sacramento “created pressures” to overstate its funds and “show positive financial results.”
Federal funding accounts for a small percentage of CapRadio’s total revenue. In a March 6 letter, CapRadio said 90% of its operating costs come from donations and local businesses.
Maranzino, in a letter Thursday to the community, also said the station is compliant with CPB policies as Sacramento State overtook its accounting department in 2023. CPB credited the university for helping to implement proper financial controls.
CapRadio will not receive CPB funding for fiscal years 2024 and 2025. The Office of the Inspector General noted its findings are only recommendations and do not represent CPB’s final conclusions.
The station was asked to provide a “final management decision” to CPB within 180 days that lists corrective actions CapRadio plans to take.
This story was originally published April 4, 2025 at 3:52 PM.
