Editorial

It is difficult, if not impossible, to eliminate abuse and fraud altogether in an administrative system, particularly if it is big, such as the public service, but surely precautions can well be put into place to deter wrongdoers. One problem is that, over time, precautions meant to check abuse and fraud may lose much of their effectiveness unless they are rigorously enforced, as they are supposed to, all the time.

Auditor reports often highlight lack of internal controls in government departments but the observations made often fall by the wayside and sometimes flagrantly repeated. It is only when fraud or abuse is brought to light, as has happened at the VAT department, that issues of internal control and accountability are raised again at national level. This is unacceptable as it shows carelessness and irresponsibility in administration.

The magnitude of the fraud being investigated at the VAT department is such that raises a number of pertinent questions. How is it possible that fraud at such scale could go undetected for so long? Finance Minister Tonio Fenech tried to explain this away by saying that when fraud involved collusion by a number of members of the same department it is very difficult to detect. This is not a very convincing argument as effective controls ought to have been in place to prevent the occurrence of such fraud. In a department so vitally important in the collection of revenue as the VAT department, one would have thought that its operations were closely monitored day by day and that internal controls were really up to scratch all the time to ensure that no avenues were left open to any possible abuse.

Seen in this context, as it should, the minister's reaction to what happened at the VAT department may give the impression that the department was allowed to operate completely on its own, unsupervised. This is certainly not a question of being wise after the event. The minister is suddenly very clear about what needs to be done but should not the running of the department been kept under constant review from the moment it was set up? The fact that it was not does not reflect well on whoever is directly in charge of the running of the administrative set-up and, also, on the government that prides itself on its commitment to seriousness and accountability. Who is going to take political responsibility for what has happened? Somebody must. The buck must stop somewhere.

The minister said they now intended carrying out "a detailed review of the operations within the department to identify the weaknesses of the system and present procedures, particularly those relating to the controls that are in place to detect wrongdoing, and ensure that these are not only strengthened but regularly checked". He also said that his ministry would "implement swiftly any recommendations that would come out from the review ..." This is the very least the public expects today. It is a shame that there had to be such a clamorous case of fraud before the ministry is taking action to ensure the proper collection of revenue.

Details of how internal controls at the department simply failed to be adhered to will no doubt emerge when the case comes up for hearing in court. Hopefully, the fraud case at the VAT department will now lead to greater foresight, responsibility and accountability in the running of government departments. Or is this too much to hope for?