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Nine Network should repay $422,000 for American Graduate, audit says; station disputes findings

ketc building
Courtesy KETC
The offices of KETC (station photo)

The Corporation for Public Broadcasting's inspector general says the Nine Network of Public Media in St. Louis should repay more than $422,000 it received for its role in leading other public media stations in the American Graduate program, an effort to help more students earn their high school diplomas.

Nine, also known as KETC, Channel 9, disputes the findings in a preliminary report by the CPB inspector general, saying that all federal money it received went toward the goals of American Graduate. Jack Galmiche, the station’s president and chief executive, called the situation an “accounting technicality” that will ultimate be resolved.

In response to the inspector general's report, the station said that having to repay the funds in dispute would be “excessively harsh and adversely impact KETC’s ability to continue to lead the American Graduate project and achieve CPB’s stated goals.”

The draft report cited the station’s response that the audit’s conclusions and recommendations “did not fully recognize the fluid nature of the projects and the work performed by KETC’s key staff as the project evolved.

“KETC further said that CPB relied on KETC’s senior leadership’s expertise and that this leadership was a key factor in accomplishing the complex work. KETC also noted that it believed CPB had accepted its financial reporting because CPB issued timely payments to the station.”

The network is the lead station for CPB  in the American Graduate program. Its website says the effort is being supported by more than 100 public radio and television stations that are working with over 1,400 partners and at-risk schools across 40 states.

A detailed letter sent from Mary Mitchelson, inspector general at CPB, to top officials at CPB said that in addition to repaying the $422,539 that did not comply with budget and financial reporting requirements, the station should also pay stricter attention to open meetings and transparency requirements for public media.

The dispute was first reported in Current, a magazine about public media.

The CPB report also said that the station “did not comply with all diversity requirements for developing a diversity goal and posting information on its website until after commencement of this examination.”

The letter additionally characterizes the station’s response this way:

“KETC’s response reiterated that its performance and expenses incurred were all in furtherance of the CPB grant objectives….

“KETC said that it incurred more costs than budgeted in the CPB grants; the balance was paid from station funds. The station said it had received approximately $1.26 million from CPB and had incurred $1.6 million on the project. This difference was more than the budget variance reported for KETC senior management of $250,000. Therefore, station management does not agree that the questioned costs should be paid back to CPB.”

Jack Galmiche, president and CEO of Nine Network
Credit KETC
Jack Galmiche

In an interview Thursday, Galmiche said the situation involves “a difference of opinion on how the funds were accounted for.”

He said he hopes the situation does not hamper the station’s work on American Graduate, which he said is making a difference. In general, he added, CPB is “not only supportive of our work but enthusiastic about what is happening nationwide with American Graduate.

“We are achieving remarkable outcomes in communities that are American Graduate communities, and those outcomes are translating into ways in which kids in our communities are leading better lives. The evidence on that is clear.”

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