A government scheme to fund local council projects was characterised by haste, ambiguity and decisions lacking in fairness, according to the National Audit Office.

The audit, which looked into a €1 million scheme unveiled last year to help finance capital projects proposed by local councils, found various shortcomings.

One example was the requirement for councils to propose projects with private sector involvement.

According to the NAO, some councils interpreted this to mean alternative public sector funding, and this was accepted by the adjudication board.

“Projects were favourably scored for sourcing alternative public sector funding, which, in this office’s opinion, cannot be classified as private sector involvement,” the Auditor General said in a 75-page report tabled in Parliament.

It also noted the ambiguity of considering revenue from advertising and interest-free payment to contractors by instalment as a form of private sector involvement.

One such example was the Paola council, which sought funds from the scheme to renovate Ġnien Wied Blandun, a public garden, and listed the Planning Authority’s urban improvement fund as private sector involvement.

The NAO noted the inconsistency applied by the evaluation board, which had turned down applications by some councils, such as Lija, on the basis that they could tap other public funds. The NAO was also critical of the chance councils were given to revise project characteristics after the submission deadline. The process allowed for one-on-one meetings between the councils and the evaluation board, but the NAO found no documentation recording the outcome of the meetings.

It said this “detracted from the fairness of the evaluation process”, since it gave the adjudication board wide discretion, which the NAO was unable to determine”.

“The assessment of applications on the information submitted by the stipulated deadline would have allowed for greater equality between projects and ensured process transparency,” it added.

It recommended that such clarification meetings and assistance should have been provided before the submission deadline, something the evaluation board said it was willing to consider for the future.

The setting up of an appeals board was received positively by the NAO. The investigation was requested last year by Opposition MPs, who had cried foul over the scheme, which they said was lacking in transparency.

The scheme was captained by Justice Minister Owen Bonnici, who is also responsible for local councils.

In a statement yesterday, the Nationalist Party said the NAO findings in this case continued to confirm the government’s lack of good governance.

“Joseph Muscat’s leadership style is diametrically opposed to that which he promised during the electoral campaign and is characterised by corruption, secrecy and rampant abuse,” the PN said.

Fund facts

The Local Councils Capital Projects Fund was unveiled in January 2015, and the projects were selected by March of that year.

The fund was to disburse €1 million, which increased by a few thousand after the appeals board overturned four decisions to refuse funding.

The fund was intended to finance capital projects that added value to the social aspect of the locality and addressed government priorities.

Thirty projects from 29 local councils were chosen for financing.

The largest share of allocated funding was for the upgrade of sports facilities and recreational space. This received €255,000 for 2015.