Auditor General Charles Deguara today presented Speaker Anġlu Farrugia with the Annual Audit Report on the Public Accounts for 2017, which highlights incomplete information on the EU presidency accounts, among other shortcomings.
The report comprises 22 reports on the operations of various ministries, departments and government entities, including an analysis of the Financial Report 2017, together with separate financial and compliance audit opinions. The salient parts of the Annual Report are found hereunder.
Letters of Comfort and Bank Guarantees, considered as contingent liabilities, are approaching €1.2 billion.
Following the enactment of the Government Borrowing and Public Debt Management Act in July 2017, the Treasury is now preparing a Medium-Term Debt Management Strategy.
Government’s plan to implement accrual accounting within Central Government necessitated, amongst others, the phased rollout of a Corporate Financial Management estimated at €11.6 million, out of which €10.87 million were eligible for European funds.
From the gross balance of approximately €3.4 billion arrears of revenue reported by ministries/departments as at end 2017, €526.3 million are estimated to be collectable arrears.
Completeness of information could not be ascertained by NAO in respect of the expenditure incurred on the EU Presidency 2017, whilst concerns emerged due to the absence of a complete audit trail and an inadequate level of verification before payment processing.
Weak internal controls due to fragmented documentation was the major concern in the audit relating to Foreign Students undertaking courses of study at the University of Malta.
An analysis of the expenditure incurred by the Ministry for Gozo, for services rendered to the elderly and persons with disability in Gozo, revealed weak internal controls, lack of audit trail and insufficient monitoring.
Enforcement action with respect to the collection of the Environmental Contribution was lacking. Separate issues were identified with regard to the establishment of the Trust Fund that is mandated by law.
Insufficient audit trail and an element of judgement in validation of drawn receipts were concerns in relation to the Fiscal Receipts Lottery held by the Public Lotto Department on a monthly basis.
The NAO satisfactorily noted that procedures and controls in relation to the initial Retirement Pension calculation were in place. However, due to the Department’s limited resources, contributory pensions were not being re-assessed on an annual basis as required by the pertinent legislation.
For the past two years, Arts Council Malta did not prepare its financial statements. Credit control was also found to be weak whilst considerable procurement was being undertaken through direct orders.
An audit at the Malta Philharmonic Orchestra revealed an unauthorised credit card facility. Expenditure incurred through the use of the credit card was only partially substantiated by supporting documentation.
A number of control weaknesses were found in the management of the Stock of Medicines and Surgical Materials at Mount Carmel Hospital. This included the lack of traceability of medicines up to patient dispensing level.
An audit on capital expenditure incurred on Information and Communication Technology at the Ministry for Home Affairs and National Security identified weaknesses in the management of fixed assets and shortcomings in procurement related matters.
An examination of the revenue generated at Mater Dei Hospital showed that information on medical services given to foreign patients did not interface with the billing systems. Deficiencies were noted in the revenue collection process while effort to collect dues was minimal.
The report also contains a significant number of recommendations which hopefully will address the shortcomings identified during these audit assignments.
This report may be accessed through the NAO website at www.nao.gov.mt as well as on the NAO facebook page www.facebook.com/NAOMalta.