Each year SoundExchange selects a group of companies to determine whether its royalty collection procedures are working as designed and all the required royalties were paid by broadcasters. The Copyright Royalty Board has disclosed that SoundExchange will audit the paperwork submitted by commercial radio streamers including Cox Media Group, Townsquare Media, and Saga Communications.

Two noncommercial religious broadcasters, including “Z-88.3” WPOZ Orlando-based Z Ministries, which owns six stations across Florida, and Hope Media Group — the parent of KSBJ Houston, and the WayFM and Worship 24/7 national networks, as well as Spanish-language Christian network Vida Unida.

In a public notice in the Federal Register, the CRB has disclosed the SoundExchange audits.

In each case, SoundExchange will examine whether the companies paid the correct amount of royalties for 2022, 2023 and 2024.

It is not just broadcasters that will be audited. SoundExchange is also reviewing the books for SiriusXM and its Pandora subsidiary, digital music service SomaFM, cable television music service Music Choice, and the business music service Mood Music.

The audits concern payments made under two licenses. One covers online streaming and the other pertains to the portion of the copyright law that allows a company to make the necessary reproductions to facilitate the digital transmission of the music recording.

Under federal law, SoundExchange may once a year conduct an audit of a music user for up to three years to verify its royalty payments didn’t come up short. The digital collections agency must first inform the Copyright Royalty Board of its plans, and that’s what federal filings show has occurred in recent weeks.

Although the collections agent for the music companies is required to reveal which companies it is auditing, the law does not force SoundExchange to make public the audit’s findings. That includes which companies, if any, failed to pay all the royalties required for their digital music use.

Further adding to the lack of transparency in the process, SoundExchange has never identified how it selects which companies are audited. It has typically focused on the largest radio groups where a shortcoming would deliver the most money.

Broadcast attorneys have said in the past that if a service under audit is found to have underpaid its royalties by more than 10%, the company will not only be required to pay late fees but will also be required to pick up the tab for the cost of the audit.