Former finance minister Tonio Fenech has a clear conscience over how he administered the National Lotteries Good Causes Fund, after a report by the Auditor General spoke of an over-commitment of funds.
In a report tabled in Parliament on Tuesday, the National Audit Office found that commitments made by the previous administration effectively tied up the funds well into the future, to the possible detriment of other deserving causes.
All the money to be available to the fund up to the end of next year has already been committed.
But Mr Fenech insisted that the over-commitment criticised by the auditor was actually the result of the implementation of recommendations made by the National Audit Office in a similar report in 2011.
He said the NAO’s main bone of contention then was lack of evidence that the funded projects had been completed and over how the money had been spent.
He explained that he had introduced the practice of issuing a commitment letter when a project is accepted for financing. The money is handed over after a project is completed and invoices are presented.
In the meantime, however, the NGOs undertaking the project, which do not have available cash, obtain a bridge loan from a bank on the basis of the commitment letter.
“The fund is replenished by between €1.7 and €2 million a year and projects take time to complete.
“Had we not done that, most of the projects this year would have fallen through. If you introduce rigorous, bureaucratic levels, you’ll be killing NGOs and their project ideas,” said Mr Fenech.
“The shortcomings mentioned in that report had been addressed and recommendations implemented, but now the NAO is criticising it just the same.
“I have a clear conscience. The report said there was no malpractice and, overall, it is positive and shows how well we administered the Good Causes Fund.
“The law gives the finance minister a free hand to do anything with the fund. But instead, from a vacuum, I created guidelines for better governance.”
On the criticism that funding parameters established in the guidelines were not respected, Mr Fenech said they did not put the minister into a straightjacket but allowed leeway for certain projects.
Even the €1 million granted to the Malta Football Association to upgrade more than 20 football pitches around the island was justified, he said.
The government in a statement yesterday said the report confirmed how the fund was used haphazardly and for partisan politics.
However, Mr Fenech noted that the NAO found no evidence of Finance Minister Edward Scicluna’s original claim that he (Mr Fenech) had allocated funds to organisations in his electoral districts.