WHYY rebounds, ending year with a surplus

The latest Internal Revenue Service filing for WHYY shows that the public broadcaster overcame an earlier deficit of $3.9 million to end the last fiscal year with a $1.7 million surplus.

WHYY accomplished that, according to the fiscal-year 2010 filing and the audited financial statement for the same period, by lowering expenses and increasing revenue, reversing trends from the previous year.

President and chief executive officer William J. Marrazzo's base compensation continued to drop - from $506,157 for the 2009 fiscal year to $448,161 in the 2010 fiscal year.

The current 990 IRS document covers the year ending June 30, 2010. Nonprofit organizations that have $25,000 or more in total revenue must complete a 990 form yearly.

"I think WHYY is doing extraordinarily well considering the tumultuous times that the nonprofit world is facing," board president Jerry Sweeney said.

"Management did an excellent job turning a deficit into a surplus for the year," said Craig Firestone, a certified public accountant in Huntingdon Valley who specializes in nonprofit tax issues.

WHYY's audited financial statement shows that the station received $8.9 million in program contracts and other project revenue in fiscal year 2010, $4.9 million more than the previous year. Meanwhile, personnel and fund-raising costs dropped.

The most controversial part of personnel costs over the last four years has been Marrazzo's compensation. The Inquirer reported in 2008 that he had a total potential compensation package in the 2007 fiscal year of $740,090, which included bonus money and deferred compensation.

Though that was the year Marrazzo earned the extra pot of money, he didn't actually receive it until the 2010 fiscal year. According to tax regulations, WHYY had to report it on the 990 form in both the year the added money was earned and the year Marrazzo actually received it.

With that $290,814 payout of additional money, the total compensation he received in fiscal 2010 was $738,975.

If that bonus sum is excluded, Marrazzo's compensation dropped to $448,161 in 2010 from $506,157 in 2009. In 2008, his total compensation was $528,800.

 Firestone, who at The Inquirer's request also reviewed WHYY's 990 nonprofit organization tax filing and audited financial statement for the 2009 fiscal year, had expressed concern for the broadcaster's cash flow.

Even as the station's spending and revenue are going in a stronger direction, he said, there still is an issue with cash flow: Liabilities grew, including an unidentified vendor's bill of $2.5 million that was deferred to a longer-term payment plan that incurred $108,000 in interest in fiscal 2010.

"You don't do these things unless you don't have the ready cash to pay a vendor," said Firestone, board president of Community Accountants, a nonprofit group that provides pro bono accounting-related services to area tax-exempt groups.

WHYY officials disagreed with Firestone: "We have unutilized capacity under our revolving line of credit and pretty predictable revenue stream," Sweeney said.

Of using a vendor's deferred-payment option, he said, "I thought that was reflective of smart financial management rather than a reflection of any liquidity issue."

WHYY officials say they are pleased that the organization had a surplus when numerous other public broadcasters around the country, including New Jersey's NJN, are having troubles.

Officials also point to 2010 as the year that WHYY's online local news service, NewsWorks, was launched and that the Dorrance H. Hamilton Public Media Commons opened as an addition to its Independence Mall headquarters.