The much-celebrated EuroPride Parade which was held in Malta in 2023 soared over its originally intended budget by over €2 million as the National Audit Office highlighted the over-spend and major shortcomings in procurement.

In its report on the Public Accounts, the NAO said that the original budget for the event "was substantially exceeded and the responsibilities for organising and managing the event were also unclear."

"Major shortcomings were noted in the procurement of goods and services required for the event," the NAO said.

EuroPride is a pan-European international event dedicated to the LGBTIQ+ community, which is hosted by a different European city each year. It features parades, artistic and human rights events across different venues.

In 2020, Malta, through the NGO Malta Gay Rights Movement, submitted its proposal to be the host country for this event in 2023, and confirmation to this effect was given in October of the same year.

The event had government backing, and was allocated €2,500,000 by the Ministry for Home Affairs which had under its remit at the time the Parliamentary Secretariat for Reforms and Equality - under whose remit the event fell under.

The NAO said that the allocated budget was exhausted by end of 2023 and there were still several pending invoices; thus, the Ministry requested additional funds in February, and again in April 2024.

In aggregate, the extra funds made available to cover the event's expenses, up to the time of writing of this audit report, totalled €2,196,7811, the NAO said. In June 2024, the ministry anticipated that another request for more funding of less than €50,000 will eventually be made. This was not effected by the time the audit was concluded.

The total expenditure recorded in the government's accounting system as at 31 July 2024 amounted to €4,638,005, thus exceeding the original allocation by 86%, the NAO said.

In its audit, the NAO sought to verify whether the spending on the event was in line with rules and regulations and whether procurement of goods and service was suitably approved by authorities.

Breaking down the spending on the event, the NAO noted that the bulk of the expense related to "Entertainment and artistic services"- with the cost of this running up to €1.45 million, which was already 58% of the originally allocated budget.

Another €826,143 was spent solely on "audio visual services" while €643,225 was spent on stage and venue set-up and design.  These expenses alone already exceed the government's originally intended budget for the event.

A further €413,604 was spent on security, €323,326 on marketing, €255,350 on visual content creation, €225,250 on accommodation and transport, €156,140 on venue rental, €143,774 on production and logistics, €78,080 on cleaning and other related services, €62,158 on medical and emergency services, and a final €61,489 on miscellaneous expenses.

The EuroPride event, which spanned over multiple days, featured a number of celebrity guests including Eurovision winners Netta and Conchita Wurst, and also pop superstar Christina Aguilera who headlined the event's official concert.

The NAO said that the Ministry said that the main causes triggering the event going over budget was adverse weather and the undervaluation of certain expenses such as security and other services provided by government entities such as the police, civil protection department, and Mater Dei Hospital.

The NAO however was sceptical of this, observing that the total security cost only amounted to 9% of total expenditure of the event and that the opening ceremony of the event was the only major event in the programme to be affected by adverse weather conditions.

It concluded therefore that these reasons "could not have been the sole cause of this variance" in the budget.

"No evidence was provided that the spending in excess of the allocated budget was adequately authorised by the right level of authority. The only approvals forwarded were those obtained from the Ministry responsible for Finance for the release of additional funds to cover more than €2,000,000 outstanding invoices," the NAO also highlighted.

The NAO also highlighted "major shortcomings" when it came to procurement, commenting that given that the bid to host the event in Malta was won in 2023 and the agreement for it was finalised in October 2022 it was presumed that there was sufficient time to plan the event and procure what was required in compliance with regulations.

This, however, did not turn out to be the case, the NAO noted.

The NAO noted that none of the purchases of both goods and services for the event were acquired following the issue of a tender, even when the threshold requiring it to be such was exceeded.

"Furthermore, no quotations were obtained for a considerable number of other purchases, which were procured directly from the open market, and for which no direct order approvals from the respective Permanent Secretary or the Ministry responsible for Finance were available," the NAO said.

Only one direct order was approved - and it was approved retrospectively regardless, the NAO said.

The NAO also noted that certain items of procurement had been split up, likely in order to get around the requirement of a tender being issued. Certain services such as the stage setup and rood structure - which were required for the whole event - were split in two, with the value of the procurement of each one being just under the threshold where Public Procurement Regulations require a tender to be issued.

"Under no circumstances would it have made sense from a logistical perspective to have different service providers setting up a stage and roof structure during the two consecutive weeks of the event," the NAO said.

The NAO also noted that there multiple purchase for similar goods and services, and that there were at least eight instances where quotations for lighting, video and stage setup were provided no more than two days before the required service was to be delivered.

"From an operational standpoint, as well as considering the nature of these expenses, one cannot envisage how service providers were willing to provide these services at such a short notice. Additionally, no reference was made to the required layout, design, desired appearance and availability of equipment, which would surely have been discussed at some stage," the NAO said.

"This suggests that the service provider had been selected directly beforehand (without obtaining direct order approval), also implying that the quotations were very likely obtained merely to conceal the bypassing of procurement regulations," it added.

Replying to the NAO's findings, the event management asserted "its strict adherence to national procurement regulations" and said that contract splitting is not a practice it employs "under any circumstances."

"While the audit's observations regarding procurement practices are being acknowledged, it is important to note that certain goods and services procured for this event were acquired under time-sensitive circumstances. In certain instances, meeting the event's operational timelines required expedited procurement actions," the ministry observed.

Limited options on the market meant that options for some items were restricted, which is why the options for procurement were limited, and staggered purchases reflected the "complex and dynamic nature of this event," it continued.

"However, the validity of the audit's point regarding procurement regulations, and the need to commit to a more consolidated procurement framework that balances regulatory compliance with the inherent operational dynamics of event management, is being acknowledged," it concluded.