The Cyprus Broadcasting Corporation (CyBC) cannot survive without the annual €24-million grant it receives from the government and has failed to follow the correct criteria in its employment practices especially in its search for a general manager, Auditor-general Odysseas Michaelides said in his 2015 report, released on Wednesday.
He said CyBC has yet to confirm the academic credentials of half its staff, while the appointment of an acting general manager, as well as the invitation of applications for a permanent general manager, were both found to have been irregular.
In assessing the public broadcaster’s financials for the previous year, Michaelides found a working capital shortfall of €9 million, mainly on obligations to its staffs’ pension fund, as well as dues for employees’ “marginal benefits”.
“This suggests that the corporation’s ability to continue as a going concern relies on the continuation of receiving the state grant, and its non-obligation for immediate payment of dues to the pension fund and employees’ marginal benefits,” the auditor-general said.
With regard to CyBC staff’s academic credentials, the Audit Service reported that 11 individuals had not produced the credentials required by their job descriptions, while the broadcaster has yet to confirm the credentials of 45 – out of 91 – permanent employees, as well as 155 of 267 contractors.
The auditor-general also found a number of irregularities in the procedures followed in filling the post of general manager.
In March 2015, the CyBC’s board decided to appoint the human resource manager acting general manager, while retaining his previous post, until the post could be filled permanently.
But despite repeated letters to the interior ministry’s permanent undersecretary, in which the board asked that the appointment could be rubber-stamped by the cabinet, as required by law, such a decision has yet to be made.
Meanwhile, a subsequent invitation for applications for the permanent general manager post was published in August 2015 and included an unaccounted-for €7,000 pay hike.
“It appears that the terms of employment were differentiated with regard to the general manager’s annual salary (from €54,942, approved by the CyBC, to €62,000) by the interior ministry, which has no such jurisdiction,” the report said.
“Our service has raised several questions with regard to this, mainly relating to the lack of evidence backing the need for a pay rise.”
Michaelides also criticised a 1990 agreement to pay permanent staff an extra 3 per cent as “marginal benefits”, which was supposed to be funnelled to the health fund “unless otherwise agreed by the two parties”. The percentage was raised in 2010 to 7.55 per cent.
At the end of 2015, total dues payable by the CyBC into this fund were €7,644,164.
The figure does not include €2.7 million paid by the CyBC into a bank account named “CyBC-Marginal Benefits”, nor €145,000, which was paid by the broadcaster into an account named “Provident Fund for Managerial Staff” – later paid to CyBC managers.
But this was done arbitrarily, since no regulations are in place for such arrangements, and the Audit Service recommended that the CyBC takes measures to recoup the €145,000 already paid out to managers, as the law does not distinguish between “managerial” and other CyBC staff.
In addition, Michaelides recommended that, in light of the difficult economic conditions prevailing in Cyprus, the broadcaster takes “all corrective measures necessary” to end the marginal benefits not in line with the benefits paid by the central government.