COA red flags PTV's P60-M payment to Tulfo's program for airing DOT ads

The Commission on Audit (COA) has raised the red flag on state-run People's Television Network Inc. (PTNI) for its payments made to Ben Tulfo's blocktimer Bitag Media Unlimited Inc. (BMU) amounting to P60.010 million in airing the advertisements of the Department of Tourism (DOT) headed by his sister, Secretary Wanda Teo.

BMU, as blocktimer, runs the "Kilos Pronto" program on the state-owned television network.

In its audit report on PTNI covering the year 2017, the COA said PTNI's payments to BMU, representing segment buy and spot placement in airing the DOT's commercial advertisements "were not supported with proper documents such as the Memorandum of Agreement and Certificate of Performance contrary to Section 4 of Presidential Decree 1445 and COA Circular No. 2012-001."

Section 4 of the PD 1445 or the Government Auditing Code sets the fundamental principles for financial transactions and operations of any government agency, while the COA Circular No. 2012-001 prescribes the guidelines and documentary requirement for government transactions.

According to the COA, the disbursement vouchers -  P22,089,560 on May 11, 2017, P18.96 million on November 8, 2017, and P18.96 million on December 15, 2017 - were not supported with MOA between BMUI and PTNI, certificate of performance, duly approved budget utilization request, and billing statement detailing the deliverables.

"Interview with the Accounting personnel revealed that there was no Memorandum of Agreement (MOA) or contract by and between PTNI and Blocktimer BMUI relative to the airing of DOT commercial advertisements in said program," the state auditor said.

"The MOA on file was between PTNI and DOT, specifically requiring PTNI to air a 6-minute segment buy in PTVs Daily News-type magazine segment, Kilos Pronto, plus a 3-minute DOT spot within the program," it said.

The COA said that a review of the MOA between DOT and PTNI showed that there was no provisions requiring PTNI to remit to Blocktimer BMUI collections from DOT for the segments/spots aired within the program, “Kilos Pronto"

The COA said that since there was no MOA wherein the terms and conditions of the agreement are supposed to be spelled out, there was also no basis for the computations on how the three payments were arrived at.

"Verbal requests for the submission of copy of the MOA were made with the Finance and Airtime Management/Programming Divisions, however, the Audit Team was informed that the MOA was under review by the Legal Unit," the state auditor said.

The COA said it found out that the certificate of performance to determine the actual airing time as well as the frequency of airing or the actual segments of the DOT commercial advertisements shown within the "Kilos Pronto" program as the basis to evaluate if all the deliverables of the contract had been complied, were also not submitted.

The state auditor also found that budget utilization request (BUR) was not signed by PTNI's Budget Unit head as to availability of funds, instead, a marginal note was written stating “subject to attachment of the revised contract."

"PTNI officers and personnel failed to exercise due diligence in the processing of the payments to Blocktimer BMUI with the end view of ascertaining that all payments made were in accordance with the duly approved contract/agreement/MOA entered into by and between PTNI and Blocktimer BMUI and duly supported with sufficient and relevant documents necessary to establish validity of the transactions," the COA said.

"Due to the absence of the documents mentioned and the deficiencies noted, the accuracy, legality and validity of the payments made to Blocktimer BMUI in the amount of P60,009,560.00 could not be ascertained," it said.

It required the state-run television to submit the MOA between PTNI and BMU, copy of certificate of performance for airing of DOT commercials in "Kilos Pronto," billing statement supporting computation of payments to Bitag Media; and a duly signed dudget utilization request on the availability of funds.

GMA News has reached out to PTNI through its listed phone numbers, but no one was answering the calls.

Other observations

Apart from the payments made to BMU, the COA also issued other observations on PTNI such as the liquidated damages of P67.179 million were not imposed on various suppliers who incurred delays in the delivery of contracted goods or services.

The SEA Games and Economic Relief Assistance Allowance granted to the network's officials and employees amounting to P10.456 million lack approval of the Official of the President.

The PTNI also designated contract service personnel as members of Bids and Awards Committee Secretariat and Technical Working Group and were paid honoraria in violation of Department of Budget and Management Circular 2004-5.

The COA also disovered that PTNI paid P1.300 million for a non-existent project for the development of a parking lot extension.

A special disbursing officer incurred a shortage amounting to P1.085 million and a notice of suspension was issued for cash items totaled P1.174 million due to incomplete documentation.

The legality, validity, and accuracy of payments made by PTNI for the salaries and other benefits of contractual and contract service personnel amounting to P77.32 million could not be established as these were not documented as required. —ALG, GMA News