At CJSW, audit reveals months-long fraud investigation against former employee

By Ashar Memon, July 12 2018 —

(With files from Jason Herring and Tina Shaygan)

For months, the University of Calgary’s campus and community radio station, CJSW 90.9 F.M., has been quietly investigating if it was defrauded by a former employee, according to an audit released by the organization ahead of its April annual general meeting.

The University of Calgary Student Radio Society — the non-profit that operates CJSW — is funded mostly by public donations and a levy from U of C students.

According to its records, the Society has been looking into alleged fraud for at least the past nine months. In November 2017, the Society’s Board of Directors voted to contact the Calgary Police Service regarding missing funds, according to board meeting minutes.

In the following months, the organization found itself navigating a police investigation against their former employee. According to the Society, the investigation is still underway.

CJSW did not publicly reveal the investigation until its annual general meeting in April this year, where a mandatory, annual audit disclosed that the former employee may have “diverted” $16,200 of advertising revenues and “misused” $2,196 of expenditures from the station.

Along with the advertising revenues, the audit also suggested other discrepancies in the station’s financials.

“Revenues from fundraising and other sources are lower than expected,” read the financial statements. “Since certain fundraising and other revenues are not susceptible to complete audit verification, it is not possible to quantify certain revenue streams for amount not received.”

CJSW station manager Adam Kamis said he first noticed irregularities in the station’s financials last fall.

“In going through our finances while preparing our 2016–17 financials, I suspected that we were missing some money,” Kamis said in a written response to questions from the Gauntlet. “Our organization last fall determined that we may have been victim of fraud and decided to engage the Calgary Police Service to investigate further.”

Kamis declined to provide further details about the alleged fraud, including the name or position of the former employee, citing the police investigation.

“That would contaminate whatever [CPS is] working on,” he later said in an interview.

The board’s decision to contact the police came months after the station went through a sudden change in management. In May 2017, the station’s previous manager, Kai Sinclair, abruptly resigned.

In a letter to the Society’s members, Sinclair said he was resigning over “personal health and family issues.” Meeting minutes now show that station’s board had requested Sinclair’s resignation. What prompted them to do so was not immediately clear.

The Gauntlet was unable to reach Sinclair for comment. The board did not respond to a request for comment about his resignation.

Sinclair left a month before the end of the Society’s fiscal year, when it began the process of auditing its financials. The U of C Students’ Union mandates that levy-receiving organizations at the school present audited financials for review annually. U of C students pay a levy of $5 per semester to help fund CJSW.

The Society did not meet deadlines set by the SU for handing over its audit for the 2016–17 fiscal year, according to board meeting minutes. Kamis cited his recency to the position in needing more time to prepare the financials.

“There was a considerable amount of dislocation and time between my predecessor leaving and myself starting,” he added. Kamis began his term nearly two months after Sinclair’s departure.

When the financials still weren’t presented by March this year — nine months after the Society’s year-end date — the SU withheld a levy cheque from the organization.

According to the SU, this was the second consecutive year that both CJSW’s audited financials were late and the SU delayed payment of CJSW’s levy cheque.

Kamis cited the SU’s “concerns about [CJSW’s] cash-handling procedures,” in their decision to withhold the cheque. When asked why the cheque was withheld, then-SU vice-president operations and finance Ryan Wallace said it was primarily because of the audit’s lateness.

When an accounting firm presented the financials at the Society’s annual general meeting in April this year, many station members expressed frustration with the section that highlighted the missing funds.

Wallace said that he wasn’t entirely satisfied with the audited financials and when the floor voted on whether to approve them, he cast the sole ‘no’ vote.

After Wallace completed his term in April, the SU’s disapproval of CJSW’s financials appeared to have simmered down. Wallace’s successor, current SU vice-president operations and finance Kevin Dang, said he delivered the levy cheque in early May 2018.

While noting that irregularities in the audited financials were a “concern,” Dang declined to provide further comment on the fraud investigation. He downplayed tension between the SU and CJSW, adding that “it’s been very pleasant working with [CJSW’s] board” and Kamis.

“I’m happy that we got [the audited financials] and I think that we’re making some good progress in getting them for next year,” Dang said.

When asked what the SU would do if the audit is late again, Dang reaffirmed his trust in CJSW.

“For now, I definitely have a lot of faith in [Kamis] and I think that he will deliver. And if something like that does happen, we’ll figure that out as we go. It just depends on the situation.”