AUDIT REPORT The Broadcasting Department under the Communication and Multimedia Ministry, better known as Radio-Television Malaysia (RTM), entered into RM111.30 million worth of deals without formal contracts.

This is according to a finding in the second series of the Auditor-General's Report 2013, which was tabled in Parliament today.

The report states that out of 426 television programmes meant for TVi, a new channel launched in 2011, 413 of them did not have a formal contract.

This is despite Treasury rules requiring any procurement of over RM50,000 to be done with a formal contract.

RTM only relies on letters of acceptance (SST) as the legal document for these deals.

"As a result of not having a formal contract, the government's interest in the procurement is not guaranteed," the audit report says.

RTM also entered into a deal with cable network service Astro to have TVi aired on its platform, in exchange for advertising the satellite broadcaster's product on its own network.

Likewise, the deal also does not have a formal contract.

"This can affect the government's interest if any misunderstanding happens in future," the report says.

'RTM spent more than it had'

Furthermore, the report found RTM had overcommitted itself by RM21.79 million through the approval of the 426 programmes, worth RM111.83 million, through direct negotiations, even though it only had an approved budget of RM90.04 million.

Also, the RM90.04 million budget under the Digital Broadcasting Content Development Project (PKPD), which was only meant for TVi, was also spent on TV1 and TV2 without approval.

"Procurement spending for TV1 and TV2 worth RM43.70 million is outside the scope of the PKPD project and did not receive approval form the Economic Planning Unit and the Treasury," the audit report adds.

Furthermore,Treasury rules require a pitching process if a government agency were to engage in direct negotiations. However, this was not complied with by RTM for 10 television programmes worth RM2.29 million.

The report also found RTM failed to issue penalties to companies that were late in delivering their programmes, causing the government to lose RM182,142.

"The audit found 42 programmes, which were late by 24 and up to 217 days, were not imposed with compensation penalties," it says.

The audit was from 2011 until June 2013.

Since 2013, the annual report of the National Audit Department of Malaysia has been divided into parts, which are then released three times a year.

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