The publication of the Auditor General’s annual report has become a landmark for serious watchers of the Malta scene. It has been improving every year in content and presentation. The latest report – for the year 2003 – leaves no room for doubt that the scrutiny of Malta’s public accounts is meticulous and minute.
Perhaps it strays at times to pursue trivial details where it could profitably focus on the bigger issues. This is no reflection on the professionalism of the National Audit Office that was established by law in 1997 to operate independently of the executive branch of government.
The latest report runs into 283 pages. It encapsulates the findings and conclusions reached, following a wide range of financial and compliance audits in terms of an ongoing audit plan
Budgeted ordinary revenue for 2003 was Lm770.5 million, but actual revenue realised amounted to Lm739.2 million, or Lm3l.3 million less than budgeted.
Appropriations for expenditure for the same year ran up to Lm895 million. And there was the need for supplementary estimates for the same year for an additional Lm37 million.
Disclosures
The report dissects these figures and, in the process, throws further light, inter alia, on the ‘performance’ of government investments and their market value. It discloses, among other things, that a total of Lm156 million in loans, and Lm48 million in related interest (Lm204 million in all) outstanding on 31 December 2003, were due by “companies not covered by Repayment Agreement”. Some of these companies have since ceased operations and others were undergoing liquidation procedures.
Among the “companies” involved, which are still operating, there are Gozo Ferries Ltd, which borrowed an interest-free loan of Lm29 million and the Water Services Corporation, whose interest-free loan ran up to Lm3.3 million.
The Auditor General reports that a return, submitted by MGI (Malta Government Investments) showed that the total cost of investments in its charge (relating to 80 companies) amounted to Lm3l.7 million as at 31 December 2003. However, it is estimated that the net book value of these companies only amounted to Lm6.4 million, after an accumulated provisional loss of Lm25 million!
Evidently, although much water has already passed under the bridge, the mess of former years has not yet been tidied up.
Even more worrying is the fact that although the ruling Nationalist administration has been in office for the past 17 years, except for a brief 22-month interruption, it has not managed to put its own house in order – certainly not in terms of collecting in due time revenue due to it
The Auditor General has reported that “arrears of revenue, totalling over Lm360.8 million as at 3l December 2003, of which one third are estimated as not collectible, is still an area where significant improvement can be registered by introducing efficient procedures for the collection of debt enforcement procedures for the settlement of finer, and correct documentation for the settlement thereof”.
Powerful punch
This is, in itself, quite a mouthful. But the punch is far more powerful than it seems at first sight – not only because the Auditor General has been saying the same thing, year in, year out, and being ignored where it matters, but also because all the money invested in the much-vaunted Tax Compliance Unit does not seem to have had the desired impact – which is to induce, at public expense, the general body of citizens to render unto Caesar what belongs to Caesar.
Is there a lack of political will or is it incompetence that allows bureaucracy to shirk its duty by malingering and procrastination?
Why does the Auditor General have to repeat, year after year, a litany of irregularities and sheer disregard of regulations, as if the potentates of the Civil Service couldn’t care less?
And, if the apparatus of the National Audit Office has failed to strike the fear of Parliament (if not the fear of God) in the bureaucracy, why hasn’t Parliament asserted its authority?
Post-independence experience
The experience of the post-Independence years has shown that successive governments invariably opted for a quiet life. Ministers prefer the status quo and would rather be free of as much scrutiny as can be avoided.
It was a significant break-through when Parliament set up the paraphernalia of public audit on the Executive. But, each successive year experience underlines the fact that scrutiny without diligent and effective remedy leads nowhere.
At best, it could be an expensive exercise for the sake of appearances; at worst it is like treading water.
It is not enough to have the service of efficient detectives. These need the support of policemen to follow up their findings with prosecution without fear or favour.
During the past years, substantial public funds have gone down the drain through abuse, dereliction of duty and a blatant disregard of service regulations under the nose, if not the eyes, of the Executive, after being alerted by the Office of the Auditor General.
Fertile environment
What action has been taken to investigate and follow up the Auditor-General’s reports? And if any action was taken, why has there been no remedy for the grave shortcomings and outright abuses reported with monotonous regularity?
The list of such irregularities (and illegalities) is endless. It ranges from unofficial use of government-owned vehicles, and lack of proper authorisation for such use after office hours, to lack of segregation of duties in the procurement process, from non-observance of procurement regulations to payment vouchers not covered by VAT fiscal receipts, and from disregard for general financial regulations in write-off procedures to lack of control over cash and bank balances.
All this offers a fertile environment for corruption
Why isn’t the Auditor General’s annual report on the top of the agenda of investigative and political reporters and seasoned columnists?
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