Changes were made to the majority of capital projects in tourist areas after tenders had been adjudicated and unnecessary payments were made on social benefits, both incurring substantial costs for the government last year, the Auditor General has found.
In his Annual Audit Report on the Public Accounts for 2012, the Auditor lambasts a variety of government departments, authorities and directorates for overruns, unapproved expenditure and other breaches of the finan-cial regulations.
An audit of the expenditure incurred by the Ministry for Resources and Rural Affairs, for upgrading works at main touristic areas, revealed inadequate planning in that the majority of capital projects experienced unplanned changes and additional work after the issue and adjudication of the tenders.
This caused substantial cost variations to the budgeted tendered amounts, which could also trigger lack of transparency and unfair competition for the amounts in question, according to the report.
In the area of social benefits, the practices and procedures at the Social Security Department created unnecessary overpayments and limited the recoverability of the amounts. The Auditor said these amounts were at times substantial.
The report says Letters of Comfort and Bank Guarantees reached €1,242 million (against €1,142 million in 2011). These constitute Contingent Liabilities for the government.
Substantial excess of actual over budgeted figures of various items of expenditure was once again reported.
Substantial cost variations to the budgeted amounts could also trigger lack of transparency and unfair competition
The Ministry of Education and Employment, according to the report, does not have a reliable system in place to reconcile the actual refunds of overpaid Students’ Maintenance Grants, against that actually deposited at the Central Bank of Malta. The inadequacy of overall internal controls and lack of audit trail were “a major concern”.
The main shortcomings included refunds not deposited at the Bank, missing receipt books and official receipts not issued.
At the Malta Tourism Authority (MTA), internal controls in various areas were found to be weak or entirely lacking.
Officers working at Head Office were not always recording their attendance, so that attendance records and overtime claims could not be verified.
Manual records at certain Tourist Information Offices were incomplete and unreliable. Weak budgetary control on overtime, as well as variances in the basic pay, was also encountered.
The procurement of services by MTA, the Housing Authority, the Malta Enterprise and the Land Transport Directorate within Transport Malta was not always in line with standing regulations.
At times, such procurement was made directly from the open market without a public call for quotations or tenders, and on occasions, without Finance approval.
Completeness of revenue generated by the Medicines Authority could not be ascertained due to the absence of an integrated IT system.
Besides other control issues, testing revealed concerns with employees’ employment contracts.
The Malta Statistics Authority lacked a formal system for authorising its procurement activities. The audit also revealed that the rates charged by the National Statistics Office for customised requests were not transcribed in accordance with pertinent legislation.
Figures from the Government Property Department, covering accrued rent on government property, were distorted and at times could not be corroborated.
Other weaknesses related to rent collectable from commercial tenements were identified. These included expired lease contracts that were not renewed and overlooked reminders for overdue rent.
Various shortcomings in the procurement, administration and payment of a number of services were revealed during an audit at the Department of Correctional Services within the Ministry for Justice and Home Affairs.
The Welfare Committee, within the Ministry of Health, Elderly and Community Care, has been operating without a chairman and the respective board for the past five years, in breach of the Social Security Act.
Several shortcomings were noted in a number of contracts in force and long-expired contracts that were still in use.
An inefficient system was also observed for the collection of the contributions due by elderly people.
Such contribution is payable for their care and upkeep in state-owned residential homes and institutions.
A copy of the report was yesterday presented to Speaker Anġlu Farrugia. It can be downloaded from the NAO website.