The University of Malta runs the risk of not paying employees every four weeks because of a strained cash flow caused by delayed government payments.
The dire situation was highlighted by the National Audit Office, which reprimanded the university for tackling the problem by postponing tax transfers to the government collected from employees.
But the university said in a statement this afternoon it was not facing a cash-flow crisis and its finances were stable and healthy despite the ongoing challenges and the ambitious expansion programme underway.
In its annual report for 2013, the NAO found the university owed the Inland Revenue Department more than €9 million in income tax and social security contributions already deducted from employee wages. This amount was three times higher than the money owed to the government a year earlier.
This earned the university the NAO’s rebuke: “Under no circumstances are payments to be temporarily postponed in order to fund the shortfalls in budgetary allocations.” In its response, the university acknowledged the importance of adhering to legislation on tax transfers but blamed the government for the problems.
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UNIVERSITY STATEMENT
In a statement this afternoon, the university said it was not facing a cash-flow crisis and its finances were stable and healthy despite the ongoing challenges and the ambitious expansion programme underway.
The NAO comments, it said, referred to a specific period in 2013 during which it was experiencing some cash-flow shortages as a result of the significant capital projects that were underway, and which resulted in expenditure that had to be paid before cash was made available through the normal channels.
“The NAO report looked at the snapshot of the year-end financial statements of the university, which year ends on September 30, but did not highlight that the balances due to the university had been settled shortly after the said year-end.
“At present, the situation is completely different to that reported as all dues from and to government have been long settled.”
The university said that following the NAO’s comments, it had reached an agreement with the government on a better way of synchronising cash transfers to avoid transitory cash-flow glitches