TV3 Financial Audit Inconclusive
Firms Cites Incomplete Records, Lack of Information from Management in Report; Refuses to Render Opinion
– Allison Goldsberry
A long-awaited financial audit of TV3 Medford has been completed without the firm that conducted the audit providing an opinion.
In its opening letter, Melanson and Heath said it declined to provide an opinion on TV3’s financial statements due to limitations placed on the scope of the audit. The limitations included incomplete accounting records, a lack of evidence to support $55,000 received by the station, and the station management’s inability to provide key information to the firm.
“Since the Organization records were incomplete, maintained no inventory of property and equipment, omitted substantially all disclosures, and because management did not provide us with sufficient written representations, and we were not able to apply alternative auditing procedures to satisfy ourselves as to the completeness of the financial statements, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on the financial statements,” wrote Melanson Heath in its report on TV3’s financial statements.
The firm conducted a financial audit of the station from April 2005-April 2007. It made several recommendations as to how the station could improve its financial record-keeping, including segregation of duties (such as one person signing the checks and the board approving expenditures); better control over expenses and receipts; improved financial reporting and accounting; a stronger cash reconciliation process; formalized administrative procedures; and the proper reporting of W-2 information.
The report noted that one person signing the checks, reconciling the bank statements, and doing the bookkeeping created a situation in which errors or irregularities could go easily undetected. In its written response to the firm, TV3 said it has hired a bookkeeper and has segregated those duties.
According to the report, an ATM card was used to make $5,900 in purchases over a two year period, and TV3 was able to provide documentation for only $590 of those transactions. Additionally, $55,000 in receipts lacked accurate documentation. To address the concern of lack of control over cash expenditures and receipts, the board said it has hired a new station manager that is more organized and has new policies in place to provide a full breakdown of deposits.
TV3 is primarily funded by a franchise fee paid by Comcast subscribers in Medford. The station receives roughly $100,000 per year.
Neither TV3 Board President Frank Pilleri or Mayor Michael McGlynn responded to a request for a comment on the audit.
The financial audit was recommended by City Solicitor Mark Rumley in a report he issued last year. The audit was initially believed to take only thirty to forty-five days when it was announced in March 2008.
It is not immediately known why the audit took so long to complete. In Rumley’s report, he notes that a bookkeeper asked to compile the station’s financial data, Patricia Cappucci, criticized the station for its lack of organization and internal controls over its finances.
“[There was] no central filing location for any vendor or employee files. My assignment to collect the information to produce financial statements was quite a chore. The data that I was able to find, was scattered in many places. Most of the records are missing,†wrote Cappucci in an email to Rumley.
Two performance evaluation hearings were held last year with retired Judge Marie Jackson. Jackson has yet to issue a report on her findings despite promising one with a month of the last hearing, which took place on November 15, 2008.
The first hearing was held on Wednesday, October 29. The hearing was nearly four hours long and dozens of people spoke, including elected officials such as State Representative Paul Donato and City Councilor Stephanie Muccini Burke.
The vast majority of the speakers criticized TV3 for such things as a lack of quality local programming and a hostile atmosphere created by the board. Speakers included several former board members, members, and a former station manager who were all critical of the station’s operations.
No TV3 board members attended or spoke at the first hearing, and instead sent their attorney, Dave Skerry, to speak on the board’s behalf. Skerry was asked to leave the hearing by Jackson after speaking out of turn and heckling speakers, and was escorted out by police after refusing to leave on his own accord.
The second hearing was sparsely attended. No one from the board or any representatives of the board spoke at the hearing.
Editor’s Note- Allison Goldsberry is a former board member of TV3.Â
More…
Report on TV3’s Financial Statements
Allison, that is an excellent overview of the long-awaited audit of Medford Community Cablevision, Inc.
It is tough to get so much information succinctly into a cohesive story, but you did a good job.
How refreshing would it be for the current board to “Step down” as they promised they would after the release of the audit. Unfortunately, it appears they intentionally stalled the audit in an effort to retain power over the access channel, and their failure to respond to a respected group of CPAs/Management Advisors like Melanson Heath & Co, PC appears to be an indication they are not going to live up to their promise to us to step down after the release of the audit.
If the Issuing Authority (Mayor McGlynn), a respected judge and auditors at an accounting firm can’t get a straight answer out of the board of directors of this publicly funded station, how are the members supposed to create their volunteer projects without worry or fear of some omnipotent board that criticizes and censors with impunity?
It is time for a new board of directors and a new TV station.