Ministry 'lacked control' on travel expenses

The Ministry of Foreign Affairs lacked adequate control on travel expenditure, potentially contributing to an increase of 25 per cent over its original budget, according to the National Audit Office (NAO) Audit Report for 2006.

The report, which was tabled in Parliament yesterday, said that agendas or programmes relating to visits abroad were not found in any of the advances files. Certain expenses paid through the ministry's credit card were not deducted from the subsistence allowance.

Documentation supporting travel abroad was at times incomplete and unclear.

Approvals for hospitality expenditure, as well as that for the purchase of a number of assets, were only obtained after the expenditure was incurred. And payments were not always supported by a fiscal document.

The NAO noted that a number of ministries, departments and entities failed to send their annual 2006 return of arrears to the Treasury Department for onward transmission to the NAO.

Some departments also lacked submission of detailed breakdown of figures, hindering audit testing.

The report noted that creditors in respect of medicines and surgical materials at the Government Pharmaceutical Services increased throughout the year by €6.52 million and totalled €28.42 million as at the end of 2006.

Of the total, 31 per cent were outstanding for over 150 days. Moreover, by the end of July 2007 about €39.37 million were already paid in respect of medicines and surgical materials.

The report said that at the Electoral Office employees and other third parties were being additionally compensated for work performed during office hours in connection with elections with certain remuneration bypassing the Final Settlement System for tax purposes.

A number of concerns and weaknesses also resulted following a review of the audit reports submitted by local government auditors for all councils. These included that 34 audit reports representing 50 per cent of local councils were qualified; 10 councils recorded a negative working capital in the statement of affairs; 49 audit reports were delivered by June 30, 2007 while the other 19 did not meet the deadline. The financial statements of one council were not received for the second consecutive year; 23 councils failed to submit a reply to the management letter by October 31, 2007.

An audit on the issue of visas at the Immigration Branch of the Police Department gave one to understand that the period being taken for the processing of application for extension of stay was too long. Furthermore, the Immigration Officers' decision for approval or non-approval was not sufficiently documented.

The inventory at the Police Department showed various shortcomings with regards to the valuation of motor vehicles and other assets, including furniture, fixtures and fittings.

The report also found that a number of social assistance beneficiaries in a selected sample were receiving an incorrect rate of benefit.

An automatic assessment for social assistance introduced in March 2005 was barely being used as a result of the very complex process of inputting data. Various weaknesses were noted with respect to medical panel reviews.

The NAO said it faced limitations on the scope of its audit in examining Customs procedures regarding withheld, seized and forfeited merchandise. Proper procedures regarding destruction of goods and valuation were not in place. Lack of security and stock control deficiencies were also noted.

The full report can be viewed at NAO's website http://nao.gov.mt .