The Finance Ministry was aware of shortcomings at Wasteserv at least five months before a damning audit in December, Times of Malta has learnt.
I recall that we had started a review process- Tonio Fenech
Wasteserv, the Government waste management agency, came in for some scathing criticism by the Auditor General in his annual review of public expenditure last December.
However, the shortcomings were known to the Government months earlier as a result of a financial review commissioned by the Finance Ministry to cut net costs at Wasteserv by €2 million.
A draft for discussion presented in July 2012, extracts of which were seen by Times of Malta, noted the problematic nature of the arrangement with JF Services to provide subcontracted employees.
It is unclear what the previous government did with the analysis and recommendations contained in the reviewers’ report, with former finance minister Tonio Fenech saying he could not remember whether it was ever brought to his attention.
“I recall that we had started a review process but given that you are speaking of a draft for discussion it may have still been at permanent secretary level,” Mr Fenech said yesterday.
He could not say whether any administrative and financial changes were implemented as a result of the report in the subsequent months, adding he would have been concentrating on the Budget.
“By September, I would have been focused on the Budget and it is highly unlikely I would have stopped to address the Wasteserv issue. Furthermore, after the Budget, we effectively entered into an electoral campaign,” he said.
A headcount in June 2012 showed that almost three quarters of Wasteserv’s 402 employees belonged to the subcontractor.
The Government-appointed reviewers said Wasteserv incurred a 5.8 per cent administrative charge on the subcontracted labour, which, in 2011, amounted to €250,000.
They also noted problems to control attendance: “This arrangement is also leading to added complications and administrative burden, including reconciliation of attendance and leave records.”
The reviewers also observed that absenteeism and sick leave, particularly at the Sant’Antnin waste recycling plant in Marsascala, was “very common and often systematic”.
The original rationale for the JF subcontract that started operating in 2008 was to have more flexibility on employee retention decisions in the event of eventual privatisation, according to the reviewers.
But what started as an agreement on the use of 100 subcontractor workers ballooned into 285 five years later.
The reviewers said the high staff turnover, which was understandable given the difficult work environment, was an opportunity to shed workers through natural wastage.
However, they noted this did not happen because the number of recruits exceeded the number of leavers and, until June last year, 43 new workers were employed.
The findings were later confirmed in a report penned by the National Audit Office.
The Auditor General found that JF Services was billing the waste company for vacation and sick leave of subcontracted employees in breach of its contract.
A sample invoice had showed that, out of six employees, five availed themselves of sick or vacation leave during the month under review and these were not deducted from the bills raised by the contractor. The Auditor General said Wasteserv paid the full amount listed in the invoice, which meant an overpayment of at least €533 per employee.
No verification of invoices was done as per contract conditions, the Auditor General said.
Environment Minister Leo Brincat, who is responsible for Wasteserv, was non-committal when asked if he would be taking on board any of recommendations in the review commissioned by the previous administration.
A spokeswoman said the minister would not decide of his own accord what measures would be implemented.
“The report will be analysed by Wasteserv’s board of directors, independently from the fact that this was commissioned by the previous Government ... which instead of evaluating its merits chose to shelve it,” she said.
When asked for a copy of the reviewers’ report, the spokeswoman said the minister did not exclude releasing it when the other reports on Wasteserv’s operations commissioned by Mr Brincat were published.
On taking office in March, the minister commissioned two separate reports: a strategic review of the waste management company and an investigation into the operations of the Marsascala waste recycling plant.
On May 17, when announcing Wasteserv’s new board of directors, Mr Brincat said the strategic review was expected to be ready in about six weeks and would be made public. The period expires at the end of this week.