Just how serious are the accounting problems that have surfaced at Chicago-based Tribune Publishing, owner of the San Diego Union-Tribune?

Worse than ever, suggests a write-up by Crain's Chicago Business of the financial crisis besetting the company, cobbled together two years ago from the bedraggled newspaper spin-offs of the once mighty Tribune Company.

"A laundry list of difficulties the company has had over two years in tracking its own operations, from newspaper ad inserts to sales commissions, is coming to light," reports Crain’s.

"In its annual filing with the Securities and Exchange Commission this month and a follow-up filing March 28 on its auditor exit, the company cited 'material weaknesses’ related to review and approval of insert volume forecasts and variance analysis for preprint advertising, documentation of approval of rates for circulation and other revenue, and the review of compensation expense, including sales commissions and bonus plans."

"It's worrisome as to how extensive the lack of controls were,” Hamed Khorsand, an analyst at BWS Financial, was quoted as saying.

Michael Ferro

The latest bad news came to light after an ownership shakeup that ended with Chicago wheeler-dealer Michael Ferro grabbing control of the company in February. At the end of March, auditor PricewaterhouseCoopers was let go, as was Tribune's chief financial officer.

"If banks and vendors can't rely on a company's internal reporting controls," the Crain’s story noted, "they may question lending money to the company or extending credit to it, he said. Or it could change the terms under which they provide those services."

Added the paper, paraphrasing Chicago accountant Harry Cendrowski, "In Tribune Publishing's case, advertisers may also have doubts, given the problems tracking newspaper inserts and circulation rates."

Opined Khorsand, according to the report, "It's a company in need of 'real change,' given the continuing declines in newspaper advertising revenue." The analyst "said he's having trouble understanding what the value of the stock is."

Austin Beutner

The controversy over how much business Tribune Publishing has really been doing first erupted in September of last year, shortly after then-Tribune CEO Jack Griffin fired Austin Beutner as publisher of the Union-Tribune and Los Angeles Times.

Russ Newton

The company released a statement saying the two California papers run by Beutner had been badly underperforming. "Revised guidance reflects lower forecasted revenue estimates for the year, concentrated in Southern California."

On October 13, the New York Times cited leaked company emails in which Sandra J. Martin, Tribune Publishing’s chief financial officer, wrote that the company had “reviewed the forecast reports and believe there is risk in the San Diego numbers. Please take ad revenue in San Diego down $3.5 million, and rerun numbers.”

Another in-house email cited by the Times had Russ Newton, then-president and chief operating officer at the Union-Tribune, disputing the lower numbers.

Jeff Light

"The projection does not seem realistic in my experience,” the paper quoted the Newton email as saying. “No one on my team appears to be the source of that decision.”

Two months later, Newton, who had arrived at the U-T in May 2015, shortly after Tribune bought the paper from La Jolla real estate mogul Douglas Manchester, left the company, taking a cost-cutting buyout from the firm.

He has not been replaced.

Shrinking executive ranks still further, last month Jeff Light, the paper's editor, was named both editor and publisher as part of a cost-saving initiative by Tribune Publishing’s new leadership to merge those roles at all of its properties.