Shortcomings in the administration of the Good Causes Fund are being addressed through the adoption of guidelines recognised by the National Audit Office, according to the Finance Ministry.

A comprehensive report by the Auditor General into the public accounts of 2011 revealed there was “insufficient documentation” to show how the funds granted to beneficiaries were used from 2006 to 2010.

There were also other shortcomings outlined in the audit report about the fund, which is administered by the ministry. For example, funds were distributed before the completion of projects and without a signed declaration from the beneficiaries acknowledging receipt.

Replying to questions from The Times, the ministry said the NAO’s recommendations were based on a “minimum number of applications” received between 2006 and 2010, adding that more than 1,788 transactions had taken place over the entire period.

“The National Lotteries Good Causes Fund committee has been adopting a set of guidelines since 2008, which have been drafted by the Finance Ministry. These address the recommendations made by the NAO and this has also been recognised by the same NAO.”

The ministry said a committee had been tasked with analysing and scrutinising the applications to ensure funds were given to the most “applicable” projects that satisfied the criteria established in the guidelines.

The ministry said funds used to be granted before the completion of projects because NGOs would have asked for pre-financing since they did not have liquidity.

“This practice was stopped in the revised regulations to take into account the NAO’s concerns although this is limiting the possibility of certain NGOs obtaining the pre-financing required.”

Nowadays, a commitment letter is issued and financing only granted when a project is completed and fiscal invoices are presented.

The ministry added that the National Lotteries Good Causes Fund committee presented a quarterly report to the Minister and an annual report, which is tabled in Parliament.