An audit report on the debt-ridden Enemalta found so many glaring shortcomings in the running of two of its key committees for the period 2008-2011 that it would not be altogether unreasonable to equate them with two of the worst-run local councils.
The shortcomings are so blatant, so daring and so extensive that they wipe out any semblance of organisation, let alone good governance.
They may have been “substantially remedied” by the beginning of 2011 but, besides the legal ramifications, there must surely be a political case to answer, particularly in view of the magnitude of the faults found and the impact these might have had both on the financial situation of the corporation and on the pockets of the consumer.
The practice of good governance takes time to evolve and there are always people who attempt to torpedo organisation and methods but this is in no way an excuse for the kind of mind-blowing deficiencies found by the Auditor General. And in the wake of the story over a minister’s involvement in the reclassification of bids for legal services, one can hardly now blame Prime Minister Joseph Muscat if he attempts to milk the report for every ounce of political capital he can possibly get.
The Labour government is at present giving so much cause for either plain disagreement or sharp criticism that it must consider the Auditor’s report on Enemalta as a godsend, coming as it does at the height of the outrage the Prime Minister has caused by his unmeasured words over immigration.
The word used by Dr Muscat for the collection of shortcomings found by the Auditor is mismanagement but, in truth, it is far more serious than that. According to the report, the purchase of fuel in the period covered had bypassed what the Auditor called “the most fundamental principles of good practice”. The lack of minute-taking was bad enough but what is one to make of the finding that, in some instances, the committee awarded tenders to bidders who did not submit the most favourable offer?
In the words of the Auditor General, a series of contractual extensions directly conceded to an oil bunkering company represented at best “an affront to the principles of good governance”.
Ministerial interventions, says the Auditor, directly impacted on the setting of the hedging strategies of the risk management committee. On some occasions, the committee failed to capitalise on favourable market conditions.
Unbelievably, the committee did not seem to operate for 10 whole months. How could this have been possible? Did they operate in a complete vacuum? Were they accountable to no one?
The more one reads of the report, the more one gets the impression that some of the corporation’s operations were running out of control. There were even instances, according to the Auditor, when the committee was informed of hedging-related decisions as a fait accompli by one of the committee’s members. What?!
Had the rest of the committee members always assented to this? Were there ever protests made? If yes, to whom were they referred? What action, if any, had been taken?
These are legitimate questions that ought to be answered.
Hopefully, the lessons have now been learned and that greater importance will be given to transparency and accountability, not just at board level but across the board and not just at Enemalta but at all government-controlled entities.
The appointment of an internal audit unit and of an independent observer on the oil procurement committee are steps in the right direction.