Negative Audit Report for RTV FBiH: Šabić Increased Salaries for Some Directors

Radio Television of Federation of BiH received a negative opinion from Federal Auditors for its operations last year, reports the BiH news agency Patria (NAP). Auditors pointed out a number of objections to the work of the public broadcaster in FBiH, emphasizing that laws, particularly on public procurement and accounting, as well as internal salary regulations, were not respected.

According to the financial report, RTV FBiH operated with a profit of 353,449 KM last year, but this was 25% less compared to the previous year. A decline in revenue from RTV fees and marketing was also noted.

- RTV FBiH has a capital of 353,537 KM, which is insufficient to cover the total accumulated loss from previous years, thus the loss exceeding the capital is reported at 1,381,039 KM – stated the auditors. The write-off of receivables exceeding half a million marks is also questionable.

Auditors discovered that RTVFBiH has the largest contracts with marketing agencies “Ujedinjeni mediji” and “Media group”, and that revenue from marketing services last year amounted to 9,941,309 KM, which is 8% less than the previous year. However, the auditors find the discounts these agencies receive for selling advertising space on the public broadcaster questionable.

- The highest revenue was generated from advertising services provided through marketing agencies: Ujedinjeni mediji d.o.o Sarajevo and Media group d.o.o Sarajevo, to whom agency discounts are given for advertising (24% and 18% respectively). These agencies perform marketing services for a larger number of advertisers, thus receiving agency discounts based on the volume of services rendered. In addition, they also receive other discounts (loyalty discounts, advance payment discounts, discounts if the agency exceeds the agreed amount based on which the discount from the price list was used, and others). Given the amount of approved discounts that ultimately affect the billed services and the reported revenue of RTV FBiH, we cannot confirm the justification and reasons for granting them, nor the amount of approved discounts – conclude the auditors, reports NAP.

Furthermore, the negative audit opinion is also based on violations of the BiH Law on Public Procurement, with several examples cited.

- In 2013, procedures under the BiH Law on Public Procurement were not followed for the procurement of goods and services for which a tender process to select the most favorable bidder was required, specifically for: legal services (97,661 KM), office supplies (105,531 KM), taxi services (89,853 KM), and software maintenance services (36,865 KM) – the report states.

As highlighted in the audit document, at the end of last year, RTV FBiH had 373 employees, of which 350 were on indefinite contracts and 23 on fixed-term contracts. Auditors note that there is still a large number of employees without the appropriate qualifications for their positions.

- According to the presented data, 86 employees are assigned to positions requiring higher education than they actually possess. Based on the documentation provided, it was determined that employees who do not meet the required educational qualifications were stated in their employment contracts as being obliged to provide proof of acquiring the appropriate qualifications by 01.10.2013. It was found that the majority of employees did not acquire the necessary qualifications after this date, but according to the presented documentation, they remained in their existing positions without a reduction in salary – the audit states.

Auditors also objected to the increase in the total amount spent on employee salaries and the lack of adequate internal controls. It was stated that the monthly net salary of General Director Džemal Šabić was set at 4,500 KM, increased by length of service. However, auditors object to Šabić increasing the salaries of certain executive directors outside of the Salary and Benefits Regulation for Employees.

- After the election of executive directors, the general director issued a Decision on Salaries for Management Employees (Executive Directors) with defined coefficients for salary calculation, which are not defined in the Salary and Benefits Regulation for Employees. Employment contracts were concluded with the executive directors on 31.12.2010 for an indefinite period, with the provision that during 2013, certain executive directors had their coefficients adjusted based on monthly Decisions of the General Director, which increased the initially determined coefficients for salary calculation – states the report, among other things, reports NAP.