EXCLUSIVE!! - LEAKED KFUO FINANCIAL DOCUMENT!!

We have come to be in the possession of a copy of a document that details the spending activity of KFUO during 2006 - 2007! This is the same period that David Strand claimed that KFUO AM lost $620,698 and directly tied the cancellation of Issues Etc. to those losses.

The document that we've acquired gives the financial details behind Strand's figure but it also reveals a plethora of accounting oddities and anomalies that completely call that figure into question and even worse it calls into question the entire management team of KFUO including Dennis Stortz, Chuck Rathert, and David Strand.

Furthermore, it completely calls into question the 'business reasons' cited by both David Strand and Dr. Kieschnick as the reasoning for canceling Issues Etc.

We want our readers to also know that we've taken great pains to abide by the 8th commandment and that we confirmed the authenticity of this document before we set out to publish it.

You can download the document by clicking here.

What the document reveals is that many of the expenses that were charged to KFUO AM do not make any sense. In fact, in many cases it looks like the AM Station was charged for FM Station expenses. Many of these charges are so blatantly misappropriated that they defy credulity.

What we've done below is point out just some of the accounting 'oddities' that we found. Each line item that we feature shows how much money was charged to each of the stations for that particular expense.

We've also provided brief commentary to help point out the glaring problem(s) with how these expenses were booked.

Comments

[FreeSpeechLutheran]

Speechless!

[Richard Lewer]

Are you e-mailing this to the concerned officials?

[Richard Lewer]

Are you e-mailing this to the concerned officials?

[Bob]

Very fishy!!!

[here we go again]

Woooah. Hmmm.... Not surprised. But still. Maybe full disclosure of K's administration fiscal spending is called for. Makes one wonder where all that money is going.

[Greg Johnson]

What "concerned officials" Richard? The problem is that the official who should be "concerned" have done nothing but try to wash their hands of this, pin it all on Strand and issue inane statements that they were "aware" of the Issues decision, but did not "direct it" or "order it."

Concerned? Yea, right.

Somebody ask Kieschnick how much he has spent on consultants. Ask him why the Synod pays for his wife to travel everywhere with him as he jets from Synod meeting to meeting and why he and his wife get to keep all the frequent flyer miles they are racking up?

Ask Kieschnick why he demanded a huge raise a couple of years ago, demanding he paid *well* in excess of $150,000 a year?

Oh, there many questions to ask "concerned officials" to be sure.

[Pr. H. R. Curtis]

That phone bill for the AM side is correct. I used to work at the Synod's other station, KNGN in McCook, NE. Most of the shows it airs are called in via phone to that station - it gets pricey.

+HRC

[Rev. Allen Strawn]

I don't think anyone questions the amount of the phone, except for the fact that the AM phone is so much more expensive than the FM. Even though there are no call in shows on the FM side, surely the staff has to make some long distance phone calls at some point.

[Chris Johnson]

One thing that no one seems to be talking about when it comes to building expenses (by the way, all other conclusions listed above seem to be correct) is that the FM Station is paying rent in the amount of some $60,000. So, the AM station is paying building expenses because the FM station is paying rent. Otherwise, above conclusions are good.

[Pastor]

While I'm upset about the canceling of Issues, etc, you need to note that the FM side pays $61,000 in rent which would take care of some of the expenses on the AM side. They also paid $54,000 in research fees that might have benefited both sides. Be careful when you throw things out, you might loose the battle and the war.

[Boaz R.]

It looks like AM has ownership of building (hence higher depreciation) and FM is renting space.

Also, AM has higher phones, probably because 1800 number is used a lot more in talk than local classical radio.

[Boaz R.]

What I don't understand is why the synod is run like a organized crime outfit. Total secrecy and disinformation, unexplained terminations and retaliation. That is the real issue in my view. Kieshnick needs to fire his high-priced corporate law firm and start talking to other pastors to learn how to run things in the best interests of its members.

Looking at the numbers, it seems as if it is set up to make AM lose money and FM protit. FM has 1.5M in ad revnue, it should be paying for the building and more of the overhead. Let AM piggyback off of its profits.

Even if the numbers are correct, the proper way to handle a lack of funding for AM would be to advertise its funding needs for Issues to give supporters a chance to raise funding. Cancelling it with no statement or acknowledgment smacks of deceit and underhandedness. Also, I'd like to see numbers on how finances are divied up among the AM shows. I don't understand how all those losses are attributed to Issues etc. and not the other AM shows. Also, I don't think anybody would complain about selling ad time (or giving mention to more financial supporters) if it meant keeping issues on the air.

An aside, FM should pursue the LCMS mission by playing more religious music, instead of being indistinguishable from any other public radio classical music station.

[FreeSpeechLutheran]

There needs to be more open discussion, more education, and more awareness about how some things are run.

[Chuck from Accounting]

Chris makes a good point. Compared to the previous year, the building maintenance expense appears extraordinarily high (eight times higher!). Apparently, the station needed some serious maintenance. However, if the previous year is any guide, the rent-to-FM/maintenance-to-AM split is typically quite favorable to the AM side.

FM operates 24/7/365, requiring a larger staff, but it undoubtedly employs more part-timers than AM; hence, a lower per-person personnel cost. (Consider the lower wages and salaries and fewer expensive benefits, such as health insurance and vacation/sick pay, that part-time employees receive.)

Sure, some expenses, such as office supplies, could perhaps be allocated better. But prima facie, this statement appears to be an overall fair division and presentation of expenses incurred.

Except for that $33,200 miscellaneous expense for AM. What the heck is that? Nice, round, (relatively) big numbers without real names make me nervous. But I'm sure your...ah..."liberated" statement has a footnote somewhere about that.

The real inconsistencies, though, lie in the purported "programmatic and stewardship" reasons for axing Issues, Etc.--as though the sudden, unexpected, and unceremonious exit of the show, its host, and its producer really was the sad-but-inevitable conclusion of countless hours of serious, concerned discussion on the stewardship of the financial resources it required.

Which is why we're looking at stuff like this financial statement: Nobody believes the scheisse about the stewardship explanation in the first place.

Enough for now, though...tax season isn't over yet, and I'm up way past my bed-time.

[Chuck from Accounting]

And just to put it more plainly, the personnel costs are most assuredly NOT simple salaries, but include the costs of providing insurance and other benefits as well as the employer's payroll taxes, as well as whatever else might be deemed "personnel costs" by the station.

[FreeSpeechLutheran]

Does the FM station use computers?

[FreeSpeechLutheran]

i mean "computer supplies"

[Pastor Walter Snyder]

"[T]he AM station is paying building expenses because the FM station is paying rent."

Okay, where does the expense report show the FM station's rent payments?

[FreeSpeechLutheran]

Why is there a separate column for "miscellaneous expenses" if those expenses are not trivial?

[FreeSpeechLutheran]

What specifically costs $33,000?

[FreeSpeechLutheran]

I believe there is discussion to be had about such specifics.

[Nancy K]

Numbers don't lie -they are just numbers!
Accountants who put the numbers in boxes are the masters of deceit.

[Lauri Amy]

While it might be possible that rent is paid from the FM side to the AM side, one wonders where the revenue resides on the AM side. It might be there. However, without all the details, it is dangerous to do more than wonder or inquire as to what this financial statement is telling us. Just my perspective when I put on my CPA hat....

[Matt]

It also should be noted that having a talk program requires much more personnel time than does a music program. That may explain the disproportional disparity between the two stations.

-Matt (a former radio station manager)

[Chuck from Accounting]

"Without all the details," etc.

Exactly right, Laurie.

It's interesting to see this information, but as the compilations we produce at work say, the information should not be used by those who are not informed about such matters.

As I mentioned earlier, the real problem is not the numbers presented here, but the unbelievable (given the circumstances surrounding the show's cancellation) claim that good stewardship mandated the abrupt and unceremonious end of Issues, Etc.

I have a feeling that the fallout from this event will last far longer than those responsible for it would hope...