Homeless people serviced by non-governmental organisation YMCA were the biggest victims of an "atypical" agreement between the NGO and Housing Authority, the Auditor General has found. 

In an audit report presented to parliament this evening, the Auditor General found that the Authority had agreed to donate the ownership of half an Msida property to the YMCA without setting timeframes on the project's completion or capping the amount of public funds to be allocated to the project. 

"These circumstances contributed to a project delay of around three years, and prohibited the NGO from accommodating the maximum number of 25 persons stipulated by the Public Social Partnership (PSP) Agreement signed with the Ministry for the Family and Social Solidarity," the Auditor General's report found.

During 2014 and 2015, YMCA's service users decreased by more than half. 

"In turn, together with the significant decrease in fundraising by YMCA, the foregoing negatively influenced the revenue generated by the NGO for its operations," the report found. 

The report noted that the NGO's corporate governance structure fell short of expected standards, with accumulated accruals of around €675,800 with respect to employees’ income tax, social security contributions and utility bills by the end of 2015 and payment procedures which failed to adhere to accounting practices.

Although NGOs are legally obliged to present annual audited financial statements, YMCA has not done so since 2012.  

The report nevertheless found that despite the significant concerns, YMCA had generally implemented its service delivery contractual obligations. 

The Auditor General's analysis was carried out following a request by the Social Solidarity Ministry's Permanent Secretary and focused primarily on a Joint Venture Agreement signed between the Housing Authority and NGO back in 2008 and the PSP signed between YMCA and Social Solidarity Ministry. 

Among the report's key findings were: 

• The Housing Authority approved €300,000 in project funding without a comprehensive estimate of works 

• YMCA submitted quotations rather than contractually stipulated tender documents - a procedure that was "tacitly endorsed" by the Housing Authority

• Despite the Joint Venture Agreement stating that a Housing Authority representative should attend YMCA board meetings, no representative was ever appointed 

• YMCA failed to present audited accounts for 2012 to 2015 despite "repeated reminders and exhortations" from the Social Solidarity Ministry

• YMCA did not always maintain or make available "critical" documentation related to its operations 

The report recommended that the Housing Authority steer clear of such deals in the future, noting that "donations of this type do not constitute typical arrangements". 

It also urged YMCA to step up its corporate governance structures and "absolutely refrain from pre-signing open cheques and making cash payments involving substantial amounts." 

The agreement between the Housing Authority and YMCA dates back to 2008 and was subsequently extended in 2012 and again in 2015 as the project fell victim to consecutive delays.