House debates new internal audit mechanism

The House yesterday also started to debate the Internal Audit and Financial Investigations Bill, whose purpose is to regulate internal audit and financial investigative functions to protect the financial interests of the government. That will include funds Malta may receive or may be required to manage under Malta's international obligations.

The bill was moved by Justice Minister Austin Gatt who said the auditor-general worked hand in hand with the Public Accounts Committee and audited accounts after they were closed. The Audit Office carried out financial and administrative investigations when asked to do so by the House.

The auditor was not there to audit or investigate matters which were ongoing but came into the picture after an act would have already been committed.

The auditor, Dr Gatt said, had the same functions as auditors in the private sector.

Another function of the auditor-general was to hold financial investigations according to the powers given to him by the constitution.

Such investigations were usually carried out after reports of abuse or on the auditor's own initiative as a value for money audit.

Such audits were not easy and he was very critical of certain reports made, Dr Gatt said.

However, there was no doubt such investigations were important and should be given a lot of importance by permanent secretaries.

The aim of this bill, the minister said, was to create an Internal Audit and Investigations Directorate to investigate matters which were ongoing.

The directorate would be headed by a board nominated by the prime minister which would have the cabinet secretary as its chairman.

Its other members would be a director nominated by the prime minister, the permanent secretary in the finance ministry, a person of recognised standing in the accounting or auditing profession who would not be a public officer, and another person nominated by the prime minister.

Board members, he said, were being given the power to seize data and information from relevant entities.

This legislation, Dr Gatt said, was also necessary for Malta to join the EU as it was obliged to make good use of the funds it received from the union.

Malta would be a net beneficiary of Lm81 million in the next three years and several organisations would also be benefiting from EU funds. It had to be ensured that such funds were well administered and spent.

Opposition finance spokesman Leo Brincat said the opposition was strongly against this bill. The opposition was not against internal audit, but this bill was humiliating as it was being moved at the prompting of the EU. The directorate would be paid for by Maltese taxpayers' money to protect the EU's own funds.

Mr Brincat's remarks will be reported tomorrow.