The latest annual report of the Auditor General of the Public Accounts at the end of 2004, is, as in former years, dominated by concern over the issue of arrears of revenue. The total outstanding amount at the end of 2004 ran up to Lm482.2 million. At the end of 2003, the relative figure was Lm36l.5 million.

Way back in l996, outstanding revenue arrears totalled Lm249.6 million. In l987, when the problem was already severe, the relative figure was Lml28.2 million!

Who is looking after the national till?

The timely collection of revenue, and control over the extent of arrears of revenue, is the responsibility of Accounting Officers as defined in Section 2 of the Financial Administration and Audit Act l962. Treasury Circular 2/2005 further states that “since the collection of monies due to Government is a fundamental need for the execution of the Government’s programme, Accounting Officers will be held accountable for any shortfalls”.

Dereliction

Heads of Department are required to submit an Annual Return of Arrears to the Accountant General by not later than the end of March for transmission to the Auditor General.

The Auditor General has repeatedly pointed out that not all revenue-collecting sources submit their returns. Some returns are incomplete or based on estimate, which means that the total outstanding amount reported by the Auditor General for 2004 is, at best, tentative and certainly incomplete.

No wonder the Auditor General has officially informed Parliament that the low collection and large increases in arrears, without valid reasons given, is still of great concern.

The Auditor General states that, as from the financial year 2005, Ministries/Departments are now also required to submit a copy of the Statement of Arrears to the Budget Office at the Ministry of Finance.

Although such returns had to be submitted by the first day of last April, various collecting sources were not submitted in time. Other returns were incomplete.

Naming and shaming

The Auditor General shamed offending laggards by naming them. They include the Ministry of Social Policy, the Ministry of Education, the Ministry of Foreign Affairs, the Ministry of Youth and the Arts, Malta Enterprise, the University of Malta, the Malta Transport Authority (including the Roads, Licensing and Testing Directorates), Heritage Malta and the National Statistics Office.

This is unacceptable and raises the issue as to whether the Office of the Auditor General is treading water, whether the financial affairs of the public service are in reliable hands, and why Parliament has been incapable or unwilling to take the bull by the horns and do its duty.

These may sound as strong words. They raise the primary issue as to why the government has to resort to imposing higher taxation, when it could first raise hundreds of millions in outstanding arrears

The fact that this festering sore is, not only uncontrolled, but is actually becoming more menacing, highlights the urgency of the situation, which, no doubt, is noticeable as far as Brussels.

Civil Service inadequacies

This is not a crisis situation that can be tackled in patches. The first, and perhaps the foremost, point of concern is the inadequacy of the civil service.

Why is it that one never hears of disciplinary action against offending Accounting Officers? Why aren’t relapsers ever brought to book? Why isn’t there anyone to take political responsibility for a situation that has plainly and steadily got out of hand?

This is an area outside the Auditor General’s’ jurisdiction. The initiative has to come from the government and from Parliament.

It is worth pointing out at this stage that the Office of the Auditor General has been harping, year after year, that the Government’s Public Account was not formally reconciled with the Central Bank account as from, June l992. At that time, the Auditor General’s Office noted a discrepancy of Lm1.7 million which could not be explained.

The Treasury has dug its feet in and still maintains that January 2002 should be officially recognised as the start-off date for reconciliation of the Public Account at the Central Bank of Malta, thus leaving the nine-year period between June 1992 and December 2001 unaccounted for.

Treasury clout

It appears that the Treasury has a bigger clout than the National Audit Office, as a result of which someone has gotten away without having to explain a Lml.7 million discrepancy.

The Auditor General has also disclosed that in 2004, the Government Securities Board was not set up, “thus hindering inspection of the List of Securities held by Government” as at the end of December of that year

It is government inertia, not the unremitting vigilance of the Auditor General that stands out again and again.

In turn, this explains why public finances are in a mess. It is due to the persistent dereliction of all those concerned, that public finances are bogged down. It all boils down to lack of discipline and lack of resolve.

The Auditor General’s Annual Report has come to assume the nature of an indictment, embarrassing senior civil servants and politicians alike, and a rebuke to the institutions and media commentators who are insensitive to Malta’s real plight.

[email protected]