Within the context of the ongoing public consultation process launched by the Office of the President in connection with the reform of the Constitution, Auditor General Charles Deguara presented to President George Vella with various proposals for amendments intended to strengthen the National Audit Office.

"The proposed Constitutional amendments are deemed necessary in order to render the National Audit Office more effective in its address of emerging issues and challenges, as well as in view of the office's role in contributing to good governance across the public sector."

The delegation from the National Audit Office included Deputy Auditor General Noel Camilleri. Dr Denise Borg Muscat and Dr Amanda Borg coordinated the extensive consultation process within the office that led to the proposed legislative amendments. Supporting this process was Professor Ian Refalo, the office's legal consultant.

The NAO said that it has come across situations whereby it felt the need for the functions of the NAO to be extended to audit and report on any persons or body corporate in receipt of public funds, irrespective of whether they are controlled by Government. "The issue to be addressed would allow the NAO to drill down to the level of the individual, institution or company in receipt of public funds. The NAO is presently unable to exercise the right to inquire how public funds were utilised at the beneficiary level. The inappropriate utilisation of public funds by beneficiaries certainly bears impact on economy, efficiency and effectiveness considerations, as well as raising compliance concerns in terms of adherence to the relevant funding agreements. The fact that such public funds may also be funds of the European Union would make such an extension even more necessary."

The Office said that in order not to overburden the NAO, it is suggested that the undertaking and effecting of such audits would be left at the discretion of the Auditor General. "The choice of which funds to audit in this respect would be largely based on the percentage and/or materiality of the public funds allocated. Moreover, the Auditor General should be given the function to follow the entire trail of expenditure incurred from public funds and determine to what extent such expenditure has been successful in achieving the intentions or objectives such funds have been allocated for." An amendment was proposed.

Among the other proposals, the NAO mentions that it is at times faced with situations where witnesses do not come forward to provide the Office with relevant information relating to the audit. "The inability to obtain the necessary information would seriously hinder the Office in coming to meaningful conclusions and curtail its powers to audit. It is also unfortunate as the inquiries conducted by the Auditor General are not criminal ones and are not meant to secure a conviction or otherwise for any wrongdoing committed. The Office is mainly concerned with the proper use of public finances.  Such inquiries are meant at discovering any malpractice with a view to bringing these to the attention of Parliament. A potential solution to this problem would be to provide in the law that the identity of the person who discloses information would be safeguarded."

"Another issue that needs to be addressed in the law is litigation in relation to reports, statements and other communications made by the NAO. This issue has already been raised in court  as an individual sought to sue a former Auditor General on the basis of libel. "Naturally, the possibility of such litigation would considerably curtail the freedom of expression of the Auditor General and his officers, and it is important that such communications be considered as privileged in order to ensure that the Auditor General has the greatest freedom and latitude to express his opinions in his reports. In the above-mentioned case, the court found for the Auditor General and dismissed the claim brought against him. The point for reform is that this matter should be expressly and explicitly provided in the law so that no doubt whatsoever may persist on the issue."

Read the full report here