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Karl Schembri
The European Commission has just launched an investigation into a Lm500,000 grant by government to PBS for public service programmes that were instead used for operations, MaltaToday can reveal.
The investigation was launched following a story carried by this newspaper last month, and confirmed by Culture Minister Francis Zammit Dimech in parliament later, detailing how the state broadcaster failed to use a staggering 33 per cent of the funds channelled by the government for quality programmes also known as Extended Public Service Obligation (EPSO).
Confirmed by an internal KPMG audit report commissioned by the Culture Ministry and released to the public only in edited version, PBS’s failure to use the funds correctly is known to have infuriated the ministry as it compromised the station’s possibility to argue for further funding for quality programmes, at a time when the board of directors is under attack for totally ignoring the public service broadcaster’s ethos.
A spokesperson for the European Commission confirmed that the grant was the subject of an investigation from Brussels given that State aid had to adhere to EU regulations.
“The guiding principles of the application of State aid rules to public service broadcasting are: clearly defined and properly entrusted public service mission, proportionality of the public funds made available to public service broadcasters (exclusion of overcompensation), including a clear separation of accounts between public service and purely commercial activities and the necessity for public broadcasters to respect market principles as regards their purely commercial activities,” the spokesperson said. “The respect of these principles should be subject to regular control by the responsible national authorities,” the Commission spokesperson told MaltaToday.
The spokesperson said State funding can also cover operational cost “if the funding is needed to perform the public service properly defined and entrusted”, but both PBS and the government have so far failed to give a clear indication on how one-third of the subvention was spent.
In fact, of the Lm500,000 government subvention passed on to PBS for the year 2004/2005, the station used only Lm331,252 on quality programmes, using the remaining Lm168,748 to finance its commercial operations.
The revelation compromises PBS’s position when it gets down to argue for more funds for quality programmes, given that it proves that instead of spending its Lm500,000 on EPSO programmes it channelled one-third of the funds into its operations while broadcasting very low-quality programmes.
The station was in fact lambasted by its own editorial board in the same year for commercialising almost all of its programme schedule and for the exclusive bottom-line driven vision of the board of directors.
The funds are meant to finance programmes that fall within the station’s public broadcasting mission deemed commercially unfeasible, such as children’s programmes, current affairs, cultural programmes and drama, although the figure of unutilised.
The minister’s spokesman said the unutilised Lm168,748 was mainly because of advertising revenue that made good for programme costs, according to a complex accounting formula set out in the national broadcasting policy that was meant not to penalise the station for attracting advertising.
PBS sources said the station was left in total chaos during the first year of restructuring, with the structures not yet in place and no accounting software available to register revenue from advertising and direct programme costs.
kschembri@mediatoday.com.mt
Links: www.maltatoday.com.mt/2006/09/17/t2.html
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