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Educational Broadcasting Corporation and Federal Government Reach Settlement Agreement on Grant Accounting

By Michelle Michalos
Tuesday, June 15th, 2010
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EDUCATIONAL BROADCASTING CORPORATION AND FEDERAL GOVERNMENT REACH SETTLEMENT AGREEMENT ON GRANT ACCOUNTING

June 15, 2010, New York, NY –Educational Broadcasting Corporation (EBC) has reached an agreement with the US government to settle issues arising from an investigation into grant accounting encompassing grants applied for beginning in 2001. EBC — and its parent WNET.ORG — cooperated fully with the investigation, which was settled today. During the time period subject to the investigation, EBC was the licensee of THIRTEEN, the principal public television station in the New York tri-state area; the ownership of THIRTEEN was restructured for reasons unrelated to the investigation, and the station is now licensed to WNET.ORG.

EBC has agreed to repay the US government $950,000, to forgo approximately $1 million in reimbursement of certain expenditures incurred with respect to project grants that the organization has been awarded but has not yet received, and to adopt a compliance plan. Although EBC and the Government did not agree entirely on the nature and extent of errors alleged in accounting for expenditures incurred in connection with grants supplied to EBC by the National Science Foundation, the National Endowment for the Arts, and the National Endowment for the Humanities, EBC worked diligently with the three agencies to reach today’s conclusion of the investigation, which resulted in no findings of wrongdoing or liability.

In the last year, EBC and its parent WNET.ORG have upgraded their grant accounting practices, including hiring a compliance officer and establishing a committee to regularly review actions on audits and compliance issues.

“We cooperated fully with this civil investigation and have put procedures and policies in place to ensure that we won’t have the same or similar issues in the future,” said Neal Shapiro, President and CEO of WNET.ORG, current parent company of THIRTEEN. “We are fortunate to create and provide the kind of programming that merits funding support through a variety of grants from such sources as the NSF, the NEA and the NEH. We are also proud that these agencies have continued to award grants to us during the investigation. It’s our responsibility to ensure that our accounting for these generous grants is impeccable.”

Today’s conclusion of the investigation was effectuated by the filing of both a Complaint, a procedurally necessary step, and a Stipulation and Order of Settlement and Dismissal in the United States District Court, Southern District of New York. As noted in the Stipulation and Order, the settlement was entered into by all of the parties based on their desire to reach a full and final settlement and compromise of the claims alleged in the Complaint. WNET.ORG was not implicated in the civil investigation whatsoever, but is a party to the settlement as the sole member of EBC and has agreed to abide by the institution of the compliance plan prospectively.

View the official press release