Audit Report On The Advertising Revenue Reported By Time Warner Cable Of New York City For Its Citycable Advertising Division

AUDIT REPORT IN BRIEF

This audit determined whether Time Warner Cable of New York City (Time Warner): calculated and reported accurately its gross advertising revenue to the City; paid the appropriate franchise fees to the City; and corrected the conditions cited in a prior audit report.

Audit Findings and Conclusions

The audit found that Time Warner could not account for 3,194 (11.87 percent) of the 26,902 invoice numbers listed on CityCable’s invoice registers and Billing Detail reports for the audit period. CityCable did not provide documentation that established whether these invoice numbers were for canceled transactions or whether they related to revenue received but not reported to the City. Therefore, we could not determine whether Time Warner accurately reported its gross advertising revenue to the City, and calculated and paid the appropriate fees due.

We did confirm that Time Warner corrected the conditions cited in the prior audit report (FN00-098A). In that regard, Time Warner reported and paid franchise fees on NY 1 revenue; ESPN cross-channel advertising revenue; production revenue; bad debt recoveries; and for January 2000, QUICS’s advertising revenue distribution. We also verified that bad debt write-offs for the audit period were accurate and properly documented, and that Time Warner Cable’s corporate offices in Stamford, Connecticut, now administers and books its corporate MSNBC cross-channel advertising revenue—therefore, that revenue is no longer reportable to the City.

Audit Recommendations

The audit recommended that Time Warner maintain detailed documentation to ensure that all invoice numbers are accounted for and that DoITT ensure that Time Warner implements the report’s recommendation.