SACRAMENTO, California — ABC10 spoke exclusively to Sacramento State University President Dr. Luke Wood moments after he released a scathing months-long forensic examination of financial mismanagement at Capital Public Radio. CapRadio is licensed to Sacramento State.
"Capital Public Radio had lax controls, lack of financial oversight, money that was being reported in ways that didn't make sense. We found out that they had reported having a $3 million reserve, and at that point in time, had only around $80,000," Dr. Wood said, calling the findings in the review sad and disappointing. "People were hurt. The campus was impacted. The community lost trust. Those are never the kind of things that you want to walk into as a new president. One person had the ability to sign things without there being any counterbalance within the organization. That person used that position and that unique setup to be able to personally benefit from Capital Public Radio."
CapRadio laid off 12% of staff and canceled music programs amid the financial issues.
"If you think about the people who donate to Capital Public Radio, a large subset of our donors are people who are older on fixed incomes, and they're really just trying to make sure that public radio is here to stay," Wood said. "To see people who are in positions of authority and positions of trust violate that trust for personal gain? I think that's sad."
The independent forensic exam found a spouse of one of the former board members held an ownership interest in the property under consideration for the new headquarters. The audit found more than $460,000 in payments were disbursed to a former CapRadio leader referred to only as Subject #1.
"Through financial mismanagement and potentially crimes," Wood said, noting the review found the money was disbursed without evidence of expense reports or receipts, "someone should be facing jail time. If you think about the level of egregiousness and what happened here... this isn't just a simple mistake."
The review also found Capitol Public Radio paid more than $300,000 for purchases that may have been made by Subject #1 but supporting documents weren't available or found.
"We have a vested interest in wanting to see the right outcome take place and for justice to be served," Wood said, adding they've now forwarded an unredacted version of the review to law enforcement. "The forensic review was supposed to be released in January or February. We're in August. So what happened? We just kept uncovering more and more and more as they were going along. We got the final review last week. We got the final copy, and so in the spirit of transparency and ensuring the public that they can trust the future direction, we released it."
Wood told ABC10 Sacramento State has taken steps to make sure this never happens again.
"We brought in their financials to the campus, so now the campus is managing the financials of Capital Public Radio and the benefits of that is it actually helps us to address many of the issues that came out in the audit," Wood said. "Fortunately, we've had a turnover in the board. We've had a turnover in leadership at Capital Public Radio. We're in a position where now I feel like we're moving forward in the right way."
He said this was a much bigger issue than many realized when they commissioned the review back in 2023. Wood said he hopes releasing the review sends a clear message.
"When people violate the public trust for personal benefit that there's an outcome for that," he said. "And that we hold people accountable. We don't sweep things under the rug, and that we don't look the other way."
WATCH MORE: Independent audit of CapRadio finds evidence of possible conflicts of interest
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'Capital Public Radio is here to stay'
The recent news begs the question as to how the results of the review will impact CapRadio's plans to possible move downtown to the new headquarters.
"In terms of whether or not we are moving forward with downtown, that is yet to be determined," Wood said. "I can tell you right now Capital Public Radio has no possible way to pay for that, and, as people will see in the forensic review, there's some concerns that have been raised in terms of how those agreements were made."
Wood acknowledged this has been a difficult time for CapRadio staff.
"It's been hard because our current staff that's there had to see other staff members who are no longer part of the organization because we had to rightsize the budget," Wood said. "But now that the budget is rightsized, now that we have listenership up, membership up, donations up... now that we have the contracts extended we're in a strong position where I can say something now that I couldn't say before, and that is Capital Public Radio is here to stay."
He said they have no plans of merging with other public broadcasting agencies.
"I would say that we have no intention of having Capital Public Radio move on to another sponsoring organization," Wood said. "That being said if KVIE wanted to become part of our umbrella we would certainly support them in doing that."
The CapRadio General Manager released a statement saying, in part, this has been a challenging journey for everyone at CapRadio.
"With the support of our community, CapRadio is in the midst of an inspiring turnaround story that includes stabilizing our finances and operations, improving and expanding audience services and significantly growing listenership and engagement," said CapRadio General Manager Frank Maranzino.
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