PAC to probe audit offices' conduct

The Public Accounts Committee is to appoint a person or persons to investigate the conduct of the Office of the Auditor General in its investigation of the Voice of the Mediterranean (VoM).

The decision was taken on the basis of a motion moved by Public Investments Minister Austin Gatt. The opposition's three MPs on the committee voted against.

Dr Gatt explained that during the committee's debate on the auditor's report on VoM, a number of major inconsistencies and defects were noted. That could lead to the conclusion that the report was manoeuvred and pre-determined, he said.

Yesterday's PAC meeting also defeated a motion moved by the chairman, Labour MP Charles Mangion, calling for a magisterial inquiry into the way the radio station was run, so as to definitively determine the responsibility of everyone involved. The four government MPs on the committee voted against.

Dr Gatt declared that the government MPs were voting against because the audit report's claims of violation of financial regulations had not been proven and there had not been any indication of a criminal act having been committed. Therefore, the request for a magisterial inquiry did not make sense.

At the conclusion of yesterday's sitting, which brought the hearings on the Voice of the Mediterranean to an end, Dr Mangion stated that in his opinion:

¤ public funds allocated by the Foreign Ministry to the radio station had not been used wisely and in a way that assured good governance and accountability.

¤ irrespective of the legal argument as to whether VoM had been bound to follow the government's financial regulations, it was clear from the evidence given by councillors Alfred Zarb and Mannie Spiteri, that although no formal instructions had been given to the managing director and the chief executive of VoM, there had been an informal agreement in internal committees for established procedures to be followed. The managing director, Richard Muscat, formed part of those committees.

¤ There existed, as was also confirmed by the audit report, a serious lack of good governance and accountability, both by the government officials as well as by Mr Muscat. This could be seen from the fact that terminal benefits were paid to a part-timer, with the approval of the director, corporate services, without any research into whether such payment was justified.

Lack of good governance was also shown by the fact that funds from the Foreign Ministry used to be transferred to VoM by the permanent secretary without question on how they were being used, so as to ensure there was value for money.

There was also squandering of public funds by a person who had the duty to administer them in a way that was and, moreover was seen to be responsible.

¤ There were isolated instances where the investigations by the Auditor General were not necessarily thorough enough to remove every doubt on the interpretation of facts.

Dr Mangion said he was saying this without any reflection on the Auditor General, whom he greatly respected.

Replying, Dr Gatt said the main assertion which underpinned the Auditor General's report was consistently that VoM's managing director had ignored and violated the government's procurement and employment regulations.

This assertion was denied by the Attorney General, whose opinion was also backed by the Auditor General's own legal adviser.

Once this main argument had fallen through, the insistence by VoM's councillors that they had asked the managing director to follow the government's regulations were contradicted by the fact that these people had never given the managing director a directive in this sense.

It has also been conclusively proven that the managing director had followed the same procedures of his predecessors. Moreover, when the deputy managing director ordered a car and he reported him to the Maltese councillors, no action was taken.

The committee meetings, Dr Gatt said, had shown a lack of professionalism by the office of the Auditor General in the conduct of such inquiries and there were eight to 10 instances where statements made in the report were contradicted by what was said in committee.

Dr Gatt said the method used by audit officer John Burlò in the selection of an expert to assist the inquiry had to be condemned. In two instances Mr Burlò had not given his expert documented and available information. All these coincidences led him to wonder whether the report had been manoeuvred by someone who had wanted certain conclusions to be reached.

Parliamentary Secretary Tonio Fenech agreed with Dr Gatt and added that it was clear that the statements made on procurement had been based on judgement and there was nothing criminal in the way VoM had acted.