Violating the government’s instructions, Pakistan Television Corporation (PTVC) made an inadmissible payment of amounting to Rs 141.9 million in bonuses to its officers and staff in two financial years (2008-09 and 2009-10) while the corporation was bearing huge operating losses.
The audit report 2010-11 of PTVC accounts reveals that the corporation paid Rs 40.786 million and Rs 101.126 million to the officers and staff during the years 2008-09 and 2009-10 respectively in bonuses on the eve of Eid festivals while the corporation was sustaining operating losses of Rs 1.066 billion and Rs 287.921 million during those years respectively. As such, the bonuses were not admissible to the employees during that period of financial crunch.
The report says that as per Finance Division OM dated November 30, 2001 and March 18, 2002, the payment of bonuses was subject to the approval of the Administrative Ministry and the concurrence of the Finance Division.
The other mandatory conditions were as under:
1) The bonus would be paid on operational profit of the organisation only, excluding income from other sources. 2) The payment of bonus would not be made as customary but it would be on the basis of profit earned and as reflected in the annual audited accounts of the organisation. 3) No commitment of payment of bonus may be made during negotiations with the CBA because of the conditions mentioned (1) and (2) above. 4) Managing directors and members of Board of Directors will not be entitled to receive bonuses.
The report further says that, contrary to the prescribed rules, the management of PTVC headquarters in Islamabad paid Rs 40.786 million and Rs 101.126 million in bonuses to the officers and staff during the years 2008-09 and 2009-10 respectively on the eve of Eid festivals. The irregularities were committed when the corporation had sustained operating losses of Rs 1.066 billion and Rs 287.921 million during those two years, it adds.
The audit report says, “Ministry of Finance granted vide sanction dated October 3, 2009, an amount of Rs 1.034 billion in the assignment account No. ACC-2447.9 to cover the losses incurred by PTVC during the previous year. PTVC treated this as “Other Income” in the accounts for the year ended June 30, 2009. As per International Accounting Standards (IAS)-18, revenue can only be recognised if it is probable that inflow of economic benefits would occur. Further as per IAS-10 adjusting events are only those that provide evidence of conditions that existed on the balance sheet date.” The audit report points out that the violation of the IAS-18 and 10 resulted in overstatement of profit for the year 2008-09.
“The treatment as well as disclosure resulted in a profit of Rs 118.957 million whereas the Corporation would have sustained a loss before taxation of Rs 915.043 million for the year 2008-09. Thus due to non-observance of government instructions, the profit was overstated in violation of the International Accounting Standards (IAS), which resulted in an inadmissible payment of Rs 141.912 million on account of bonus,” it adds.
In another audit objection, the report reveals that PTVC (HQ) in Islamabad had imported seven transmitters worth Rs 46.781 million from China from Public Sector Development Programme (PSDP) funds during 2005-06 but the transmitters were lying in parking area of PTV (HQ) in miserable condition since then. “Due to non-installation of transmitters since their import, the funds of Rs 46.781 million were blocked,” the report says.
