An Oregon University System audit of Jefferson Public Radio and its fundraising arm calls for separating the leadership of the two organizations, citing a potential conflict of interest.
Ron Kramer, executive director of both JPR and the nonprofit JPR Foundation, questions the audit's conclusions — saying adding another director and staff would not only increase costs, but could threaten the assets of the fundraising foundation.
The audit, performed by the Oregon University System Chancellor's Office, was designed to ensure assets and liabilities were appropriately recorded and identified between Southern Oregon University/JPR and JPR Foundation, said Jim Beaver, SOU spokesman.
Beaver said SOU administrators agree with all of the auditors' recommendations and hope to implement a plan for separating the two executive director positions by the end of June.
"We're all fans of JPR. They have a great mission and history within the campus and the community," he said. "Resolving this conflict issue is a relatively simple solution."
JPR was established by SOU in 1969. The station provides public radio to listeners in Southern Oregon and Northern California. Kramer oversees 13 university employees in his capacity as JPR director, the audit states.
The JPR Foundation was established in 1997 as a nonprofit organization that supports the public service objectives of JPR with tax-exempt status and fundraising efforts. In his capacity as director of the foundation, Kramer also oversees three radio staff members and three full-time and nine part-time/seasonal staff members at the Cascade Theatre in Redding, Calif.
The audit noted that the history and background of the two entities contributed to "the lack of distinction between (Kramer's) roles within the two organizations."
It added, "one individual cannot adequately represent the interests of two separate parties to the same agreement or contract."
"The audit is saying we really need to split up those two positions," said Beaver. "There have been questions in the past about this relationship."
Kramer denies there is a conflict, and said he was ordered to oversee the foundation as a condition of his employment with SOU. Kramer questioned the timing of the audit and its conclusions. Under the current contracts, if SOU/JPR absorbed the foundation, "all assets revert to the university," he said.
"Times are tough" fiscally, as budgets continue to be slashed, Kramer said.
"One could conclude the university is trying to gain control over the foundation's assets," he said.
Beaver denied that.
"I think the university has no interest in the foundation's assets," he said. "We need a resolution to the control problem. Really it comes down to the director (of JPR and JPRF) being the same person."
The audit reports JPR and the JPR Foundation had more than $9 million in combined assets as of June 30, 2010. JPR is supported by state appropriations, indirect administrative support from SOU, contributions from donors, grants from the Corporation for Public Broadcasting and other sources. The JPR Foundation is supported by private donations and revenues generated from Internet service, rents, royalties and Cascade Theatre operations.
Combined total revenues, support and other income was approximately $4.2 million in 2010. Total assets of JPR/SOU were listed at $5,445,259 and of the JPR Foundation at $4,095,707. Total JPR/SOU liabilities were $895,555. The foundation's debt was $1,287,376.
The audit deemed the financial risk to SOU as "high" if issues between JPR/SOU and the foundation are not resolved, Beaver said, as it called into question JPR Foundation's involvement in the Holly Theatre, the planned relocation of JPR's studios to Medford and the Cascade Theatre in Redding. Auditors concluded the foundation's projects in Medford "could result in an additional strain to the JPRF debt burden and community fundraising."
"The audit concluded the foundation's debt ratio was twice as high as recommended," Beaver said.
Kramer said "the debt ratio is irrelevant," because the revenue side is not shown in the audit.
The audit "did not note any significant, material liabilities or commitments that would exist for the university linked to JPRF," but it did raise concerns that the foundation's need for $7 million in cash could put a strain on a donor base that SOU relies on to help fund competing educational and capital development.
Fulfilling his obligations to the foundation board, which approved the Holly Theatre restoration, is part of his job description, Kramer said. The foundation will continue to raise money and the projects will move forward as they are financed, he said.
"This is essentially a solution in search of a problem," Kramer said.
Reach reporter Sanne Specht at 541-776-4497 or email firstname.lastname@example.org.