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It has been a rough few weeks for Capital Public Radio (CapRadio), the Sacramento-based public radio station, which manages both North State Public Radio and Humboldt County’s own KHSU — or what remains of it after a near-complete dismantling of local involvement in 2019.

At the end of August the station laid off 12 percent of its workforce and canceled four music programs, citing financial challenges. Last week, on the heels of what CapRadio itself described as a “devastating audit,” Sacramento State President Luke Wood announced that the university, which holds the station’s FCC license, was taking over operational control of the NPR member station. On Wednesday, 14 CapRadio board members resigned, citing “a failure of Sac State to inform and engage with the board in a good faith effort to resolve CapRadio’s financial issues.”

The audit [click here for a pdf], which was conducted by California State University, uncovered widespread fiscal mismanagement. Some examples:

• More than $1.1 million in studio equipment and furniture loans were taken out without approval by CapRadio’s board;
• CapRadio accepted gifts “without written delegation of authority from the campus president” and processed an $85,000 “gift-in-kind” that actually was a discounted purchase of a piano that is now in storage; 
• Credit card charges were not properly reviewed and, in some cases, late fees and charges over the card limit were incurred; 
• The station failed to make payments the past two years on an $8 million loan that Sac State assumed for tenant improvements to the station’s planned downtown Sacramento building; and
• The station “lacked complete and current policies and procedures in almost every financial and operational area reviewed.”

Asked how this mess might impact KHSU, North State Public Radio General Manager Phil Wilke said he’s committed to ensuring that the on-air programming and signal strength are not compromised.

“Whatever the outcome of the restructuring on the financial side and the board governance side is, the independence of the newsroom and programming arms of CapRadio, North State Public Radio and KHSU are not going to be compromised,” Wilke said.

Asked how he can be confident of such stability given the upheaval at CapRadio, Wilke acknowledged that he was giving a “best-case scenario,” though he added that he doesn’t envision a scenario in which Sac State lets CapRadio go belly-up.

”I suppose in worst-case scenario that could happen,” he allowed. “But CapRadio in the Sacramento metro area is a well-established, well-thought-of journalistic outfit. That dedication to journalism and cultural programming … doesn’t waver. Now, the resources they have to perform those functions might change at some point if financial restructuring takes a short-term hit, sure, but I can’t envision a scenario where Sac State allows really one of the significant media organization in the state to go under.”

CapRadio partnered with Humboldt State University (as it was then called) in 2021, with the university retaining the FCC-issued broadcast licenses while CapRadio and Chico-based North State Public Radio assumed control of daily operations and programming. 

Since then, local involvement has been minimal, though Wilke has been making efforts to expand it. In recent weeks he has reached out to local newsrooms, including the Outpost’s, to request collaborations with local producer Alejandro Zepeda on news content. (The Outpost declined the entreaty.)

Wilke said other efforts are underway.

”We’re working with the journalism department and student radio station on campus [KRFH], and we will be getting interns working on the production side to get ‘em trained up,” he said. “We’re talking with other media outlets on the Lost Coast to see if there are partnership opportunities available, so we’re trying everything we can to increase local voices on the air.”

For more on CapRadio’s troubles, see this coverage by CapRadio’s own newsroom or this story from the Sacramento Bee. We’ve also embedded video below showing the Bee’s interview with Sac State President Luke Wood.