http://www.baltimoresun.com/news/local/bal-md.briefs02.nov02,0,7253821.story

From the Baltimore Sun

maryland news

Audit faults cable TV fees verification

Originally published November 2, 2006

The Mayor's Office of Cable and Communications did not obtain the necessary financial records from Baltimore's cable companies to ensure that the city was receiving the money it was entitled to under its franchise agreements, according to a report by the city auditor issued yesterday.

The report covered July 1, 2004, to June 30, 2005. During that time, the city got $4.5 million in franchise fees based on 5 percent of gross revenues, according to the audit. The fees came from Comcast of Baltimore City and from Flight Systems Inc., which provided cable service around the Inner Harbor from 1999 to March 2005, when it was bought by Comcast.

City auditors said in the report that "the fees collected were neither verified nor reconciled to the franchisee's financial records to determine whether the city received the proper remittance."

In a written response to the audit dated Oct. 30 and presented yesterday to the Board of Estimates, the cable office said that supporting documentation required under a new franchise agreement that went into effect in March 2005 "has not always been provided in a complete or timely manner by Comcast."

The response noted "that there is no finding that indicates that the city has failed to receive all the franchise fees to which it is entitled."

It added that it has scheduled a Nov. 15 meeting with Comcast officials to make sure it has all required documentation from the company since March 2005.

[Eric Siegel]