NATIONAL PUBLIC RADIO--America's popular alternative to the commercial networks--has a financial mess on its hands. Not only is NPR reeling from a deficit that is threatening its showcase programming and already has sent well over 100 employees packing, but the network also is the subject of serious charges of financial mismanagement. An audit released last week of NPR financial records for the first seven months of the year raises the possibility that NPR management improperly used at least $140,000 in employee withholding taxes. It also cites nonexistent or sloppy financial records and a generally poor internal system of controls. Clearly, a thorough investigation is in order.
There is justifiable concern on Capitol Hill. Public money--channeled through the Corporation for Public Broadcasting--is involved, and this audit was no amateur job: it was conducted by Coopers & Lybrand, and it concluded with a warning from one partner that the financial factors indicated NPR might have to shut down. The audit team has warned that NPR owes a number of creditors, as well as the federal government money that, "if demanded, could not be presently satisfied by NPR."
Using federal and state withholding taxes to cover a deficit or for day-to-day operations is not only serious but also illegal--and the consequences could be great. In any event, the financial management system under the NPR presidency of Frank Mankiewicz, who has now resigned and will join the public relations firm of Gray & Company next month, was, according to the auditors, out of control. Mr. Mankiewicz, for his part, replies that NPR's own earlier audits did not find any of the irregularities cited in this latest report; he says that had he or any of the top managers known what was happening in the network's finance department in regard to money withheld for taxes, "it would have stopped at once."
Mr. Mankiewicz says he welcomes any investigation that would pinpoint whatever wrongdoing may have occurred. He also contends that some of the amounts cited in the audit as deficits are accounting numbers that do not represent actual dollar shortages, since budget cuts as well as money still due to come to NPR are offsetting these figures. The auditors did note that some sound financial moves were made, including a series of private ventures by NPR that were initiated by Mr. Mankiewicz and that are proving to be successful revenue producers.
But the list of disturbing findings includes, additionally, at least $85,000 in apparently unsupported charges made by the staff on American Express cards in a seven-month period; sloppy handling of funds raised by appeals to corporations, foundations and listeners; some 40 bills amounting to $320,000 that were not sent out in a timely fashion; and inadequate purchasing procedures.
However terrible NPR's financial mess turns out to be, it would be a shame if this ambitious and popular venture were to collapse. Still, no amount of hat-passing can hope to succeed until the financial air is cleared. So far, member stations as well as a list of distinguished journalists and friends have been campaigning for contributions to keep NPR's programs on the air--and in the long run, it should be these privately raised funds that keep public radio alive. But right now, public money and public trust are at stake--and in jeopardy. That is all the more reason why a complete and rigorous investigation is in order.