Auditor slams poor controls in road-building projects

An inquiry by the Auditor-General has found that the Transport Authority (ADT) had adopted an unorthodox payment process for road contractors whereby the contractor account was at times in credit., a report issued today showed. It was also found that project supervisors were nominated by the contractors themselves.

The inquiry, into control mechanisms deployed by the ADT in managing variations in road construction projects was requested by the Public Accounts Committee. The report was presented to Parliament.

Whilst noting the timely completion of the projects, financed under the Italian financial protocol, the auditor found that:

• Treating the projects as a departmental tender resulted in safeguards afforded by the Public Procurement Regulations being replaced by new, untested systems.
• Ministry of Finance approval for ADT to manage the projects outside the most commonly applied provisions in the public sector procurement regulatory framework did not take into account extra-budgeted expenditure. From an originally-allocated Lm12.9M (Italo-Maltese Financial Protocol funds dedicated to road works), project expenditure totalled Lm16.5M.
• ADT delegated project management responsibility to (external) supervisors who had been nominated by the contractors. No evidence was found to prove that ADT abided by Ministry of Urban Development and Roads instructions to maintain its own controls.
• NAO checks on a sample project revealed that ADT had adopted an unorthodox payment process whereby the Contractor account was at times in credit.
• Errors were encountered in bills. These had gone undetected for some time before being adjusted and in one instance the error went unnoticed.
• The role of the Supervisor was not correctly defined and the perception of transparency, effectiveness and accountability was clouded by the perceived link between Contractor and Supervisor. The various roles assigned to the Supervisor within the contract blurred this separation further.

The full report will be available at www.nao.gov.mt from tomorrow.