WTVP's independent auditors had flagged concerns about "significant deficiencies" in the station's internal controls for expenditure approvals and reporting for years, the Corporation for Public Broadcasting's inspector general found, but the station's governance structure failed to act quickly enough to correct them.
The inspector general's office released its findings on the station's operations between July 2020 and June 2023 in an 83-page report on Monday.
Former director of finance and human resources Lin McLaughlin and president and CEO Lesley Matuszak both resigned in September 2023. Matuszak took her own life the day after stepping down.
Most of the station's board of directors resigned abruptly in January 2024 following several waves of painful cuts and negative publicity for WTVP. Board chairman Andrew Rand was out, and a new board led by businessman John Wieland was ushered in, along with $1.2 million in new financial commitments from an undisclosed source.
The inspector general, an independent watchdog for the private, not-for-profit Corporation for Public Broadcasting, said the station's independent public accountants issued warnings in fiscal years 2021 and 2022. Those concerns circled around documenting credit card receipts before authorizing payments, and ensuring Community Service Grant funds were only spent on allowable public broadcasting expenses.
"The Director of Finance, a subordinate of the CEO, processed, in effect approved, the CEO’s expense reimbursements and credit card charges. The board was not required to approve CEO expenses," the report reads. "There were no internal controls in place to prevent payments without receipts or invoices for public broadcasting services."
The audit said that McLaughlin kept a second set of books separate from the official accounting records maintained by the National Educational Telecommunications Association, or NETA, that WTVP contracts out for that task. Unlike the NETA records, the QuickBooks ledger maintained by McLaughlin wasn't subject to any external audits.
Department heads didn't approve invoices, and the CPB audit found no evidence the CEO was approving invoices before payment.
McLaughlin processed and paid all disbursements from the QuickBooks accounting system, and sent copies of invoices and check stubs over to NETA for the official general ledger. Many of the invoices sent over were only partial.
The CPB audit notes McLaughlin didn't apply the same standards to CEO Lesley Matuszak's credit card receipts that she did other employees.
Matuszak's personal usage of television station funds for everything from expensive designer clothing and jewelry to political donations and private country club memberships would later lead the Peoria Police Department to conclude there was enough evidence to arrest her for forgery and embezzlement. Charges weren't recommended for McLaughlin.
A September 30, 2021 independent audit letter flagged major concerns over audit adjustments, financial statement preparation, and other issues.
"It noted the lack of segregation of duties among personnel increases the risks of errors. Also, misappropriations could occur and would not be detected in a timely manner," the inspector general report read.
But no additional internal controls were implemented until findings in the fiscal year 2023 audit, despite previous assurances from Matuszak and McLaughlin that changes would happen.
Matuszak was first scruitinzed by the board of directors in August 2023, after they noticed she liquidated $320,000 in investments and tapped a $100,000 line of credit at PNC Bank to keep the station afloat without prior board knowledge.
The inspector general found $12,203 of Community Service Grant money intended for station operations was spent on Matuszak's personal luxury purchases. That money is awarded to PBS and NPR member stations by the Corporation for Public Broadcasting, which in turn is funded by American taxpayers through congressional appropriations.
$37,589 in CSG funds were improperly spent on printing costs for Peoria magazine, the commercial business publication WTVP acquired in 2021. Some $13,912 in CSG money was improperly spent on lobbying activities, and $4,086 in unsupported credit card expenditures and journal entry adjustments were also challenged. That included $3,096 in employee credit card expenditures lacking receipts.
WTVP's insurance company ultimately awarded the station the maximum $250,000 payout possible after it filed an employee theft claim for $375,017.
The inspector general recommended WTVP be required to repay $67,790 in improperly spent Community Service Grant funds to the CPB.
WTVP management agreed with the inspector general's findings, and said they've implemented several changes to enhance financial oversight at the public television station.
That includes eliminating the station's check writing practices and having NETA now prepare all checks for payment. Approvals on invoices are now required before payment, CEO expenses are reviewed by the board treasurer, credit card purchases are reviewed with required receipts, and large purchases require advanced approval.
Changes were also made with the board's structure. A director can now only serve nine years instead of 12, and board chairs are limited to two terms, with an additional term possible if deemed necessary by the board. Board chairs weren't previously term-limited at all. A director who leaves the board can't come back for at least two years. A new whistleblower policy was also added to the board bylaws.
Current WTVP president and CEO Jenn Gordon said the station will adopt the inspector general's recommendations. She said she is hopeful the CPB will soon award the station the fiscal year 2024 Community Service Grant it withheld after questions first began to surface about financial improprieties at the station.
