Financial oversight, or not
The local station board is charged under the bylaws "To review and approve that station's budget and make quarterly reports to the Foundation's Board of Directors regarding the station's budget, actual income and expenditures." This is extremely important - the station must remain financially viable in order to meet any of its other goals. But the WBAI LSB, under the control of "Justice and Unity," failed to do this, to WBAI's detriment.
First of all, we have made no reports to the "Foundation's Board of Directors regarding the station's budget, actual income and expenditures." Our LSB has not even seen reports comparing the station's budget to actual income and expenditures since 12/06. In the interim, WBAI's income has been unable to meet expenditures, and so we have racked up a large debt to the rest of Pacifica foundation. At the moment this stands at around $250,000 - $350,000, to the best of my knowledge. And the LSB has never even discussed it.
People should understand how dangerous it is for WBAI to fall in debt to the national office. Pacifica's current CFO, Lonnie Hicks, has several times supported the idea that Pacifica stations accept underwriting - that some outside organization pay us money for the use of the air, as happens on NPR and elsewhere. I think this is a terrible idea, in that it compromises our journalistic independence. But - if we can't pay Mr. Hicks back, he may be able to force WBAI to take this step. The one sure way to avoid giving leverage to Mr. Hicks and other outsiders is to stay out of debt - to live within our means. Further, it is highly unlikely that the other Pacifica stations will continue to provide money to cover for WBAI's annual shortfalls.
The second way that WBAI's LSB failed to fulfill its financial responsibilities this year was by not approving a sensible budget. WBAI needs to cut spending to stop running up deficits. However, too many refuse to accept this difficult reality. So the LSB, under control of "Justice and Unity," went through the following absurdist budget process, which has wasted four meetings and has left us where we started - still without a budget for fiscal year 2008 that the Pacifica board of directors will accept.
- 8-6-07: LSB passes budget with ~$100,000 annual deficit and overoptimistic income assumptions. "Justice and Unity" refuses to accept amendments. Independent LSB members vote no, but it passes anyway, since "Justice and Unity" has a majority. Pacifica's CFO does not accept it.
- 8-21-07: WBAI LSB approves budget with ~$70,000 deficit and unrealistic income assumptions. Independents vote no, but it passes anyway.
- 8-29-07: Pacifica's National Finance Committee ignores the 8-21-07 budget and asks for a real one.
- 9-5-07 Management presents new budget to LSB with surplus. This is based on even more optimistic income projections than before. It calls for a five percent pay cut for all paid staff. LSB adjourns before vote on budget.
- 9-13-07: Pacifica's National Finance Committee instructs LSB to send up an approved budget.
- 9-18-07: WBAI LSB ignores the National Finance Committee, fails to consider budget, instead it spends over an hour on Steve Brown. Independents plead to spend time on budget and finances instead, but are turned down.
- 9-25-07: WBAI LSB approves budget of 9-5-07 (with slight changes). Independents vote no, but it passes anyway.
- 9-26-07 - the National Finance Committee sort of approves this budget, but freezes spending, hiring, etc. until we write a more realistic one. NFC member points out that cash flow projections with this budget say we have no cash at end of the fiscal year - an irresponsible thing, since we will not be able meet payroll.
- 9-30-07: Pacifica's National Board rejects WBAI budget, allows us to spend on this budget's allocation for 90 days, tells us to come up with a new one. (The national board approves the budgets of the other four stations.)
And WBAI's deficit continues to grow. We desperately need an LSB that will address this terrible situation.