One of the companies that supplied services in connection with national celebrations in 2014 failed to submit seven bank guarantees amounting to €265,205, the National Audit Office found.
The guarantees were required of the company, National Events Ltd, in the call for tenders issued by the government’s National Celebrations Foundation.
The NAO also reported that it had not been provided with agreements involving €603,474 that were undertaken by the foundation for services provided by three of the suppliers.
The expenses of the foundation, set up to organise the festivities marking four historical anniversaries celebrated during 2014, were yesterday scrutinised by the Public Accounts Committee (PAC).
It was debating the Auditor General’s findings related to the Office of the Prime Minister in the financial and compliance audits of the 2014 government accounts.
Mario Cutajar, the Principal Permanent Secretary, and other OPM officers testified before the committee.
In its audit of the OPM’s expenditure, the NAO identified shortcomings in the areas of compliance with fiscal obligations, general-use vehicles and inventory.
Instances of lack of adherence to the public procurement regulations were also discovered.
A sample of 44 transactions amounting to €1,192,009 and representing 23 per cent of total payments was reviewed. From the sample, 13 transactions, totalling €709,394, were related to the foundation.
In six cases it resorted to the finance ministry to obtain approval for a direct order when a public call for tenders or quotations ought to have been published.
The NAO remarked that 40 per cent of the foundation’s expenses that it had looked into did not follow a call for quotations.
Justice Minister Owen Bonnici highlighted a possible conflict between individual artists’ particular requests and the public procurement regulations. The Auditor General agreed that there may be scope for tweaking the procurement regulations to allow for limited justified flexibility.
€8,500 were paid to release a musical band from exclusivity so it would perform at the Music and Steel Festival, besides the fee.
The auditor referred to other OPM transactions that he considered as not having been in line with the financial regulations.
Justice Minister Owen Bonnici highlighted the possible conflict between individual artists’ particular requests and the public procurement regulations
No quotations were sought in respect of €23,222 worth of services given by a particular supplier for the Gvern li Jisma’ campaign. The OPM explained that this was because of short time frames, adding that the prices were fair and reasonable.
A marketing agency was paid €9,440 for quantitative and qualitative research. The justification provided by the OPM consisted of the provider’s experience in the sector.
Another payment of €16,352 for research services was advanced without a call for quotations. Moreover, the finance ministry’s approval of a direct order was issued after the services were rendered.
The Principal Permanent Secretary said he had given clear instructions that approval was to be sought in time.
The NAO noted that three service providers, owed €117,541 by the OPM, did not have a VAT receipt book on the ground that they did not previously issue VAT receipts since they operated in the business-to-business sector.
Eventually the suppliers sent the fiscal receipts after being contacted by the OPM, following the NAO’s request.
Testing was carried out on the OPM fuel consumption of two fully-expensed vehicles assigned to senior officers and on the maintenance of logbooks of three general-use vehicles.
The NAO noted that three logbooks were not regularly inspected to monitor fuel consumption and to report any irregular use of cars. One logbook lacked certain important information when refuelling, including the requisition number and litres taken. The other two lacked any refuelling information.
The OPM acknowledged that vehicle logbooks were not being rigorously checked mainly due to lack of resources within the transport section and confirmed that logbooks will continue to be reconciled with the Fleet Management System, retaining a two-tier checking process.
Two locations were chosen to ascertain the correctness of the OPM inventory, namely the Directorate for Finance and Administration and Villa Francia.
The former’s inventory database had not been updated since June 2013 and key details were sometimes lacking as part of the asset description.
However, during the course of this audit, OPM commenced a thorough exercise in order to update its inventory.
The NAO reported that it could not carry out testing of the inventory items at Villa Francia, even in view of the international events taking place last year.
The Principal Permanent Secretary informed the PAC that the OPM was updating the premises’ inventory.