Last Monday the Auditor General published the annual audit report on the Public Accounts for the financial year 2022. He did so, as is customary, after presenting the said report to Mr Speaker for the consideration of Parliament.
The audit report, which is over 300 pages long, contains around 250 recommendations for action meant to address the shortcomings which were identified in this year’s audit report.
The National Audit Office identified five key findings as a result of this year’s audit, namely: limited internal controls, insufficient enforcement of amounts due, a lack of an audit trail, weakness in the payroll system, and, most worrying of all, the “habitual” bypassing of procurement regulations in the public sector.
Various news items in the local media, reporting on the audit report, focused on the issue of the weakness in the tax collection system and the amounts of taxation due which are contested, have not been collected or have been written off. The matter is serious enough.
However most worrying of all is the issue of the “habitual” bypassing of procurement regulations by a number of public sector entities. This denotes the effort to bypass procurement rules, throughout the public sector, and seek corners away from the glaring spotlight of internal controls thereby avoiding proper governance. As a result of this bad practice, in addition to subjecting the public purse to unnecessary expenditure, this distorts competition and locks out various potential suppliers from participating and competing in a fair manner in line with procurement regulations.
This method of operation is unfortunately becoming a common practice in the public sector through the use of direct orders, when these are not necessary, and in particular by the splitting of contracts into a number of smaller contracts to facilitate this practice with ease.
Lack of adequate planning within the various entities is also the cause of non-observance of public sector procurement regulations. At times this lack of adequate planning is the result of administrative incompetence. At other times it is just planned that way and then used as an excuse to facilitate the renewal of contracts without going out to tender. It is also used to justify the use of the negotiated procedure as a result of which a public entity negotiates a contract for services or supplies required with one or two entities.
This is resorted to under “extraordinary circumstances” but the Auditor General chastised at least one department (AACC – The Active Aging and Community Care Department ) for repeatedly avoiding going out to tender and using a negotiating procedure instead.
The Auditor General lists the contracts for the relevant services entered into by the Active Aging and Community Care Department, through the negotiated procedure, namely Cleaning Services, Nursing Services, Meals for Homes, Clerical Services and Domiciliary Services!
The Ministry for Gozo, on the other hand was taken to task by the Auditor General for “habitually” splitting services of substantial value into several contracts in order to facilitate the issue of direct orders instead of issuing a public call for tenders. This is a fragmentation of purchase requirements and is an infringement of procurement regulations. It was authorized directly by the Permanent Secretary of the Gozitan Ministry!
At times one wonders what all those appointed in managerial grades in the public sector are doing. Specifically, one can query the role of Permanent Secretaries in managing and monitoring adequately the departments under their responsibility.
Permanent Secretaries are the top civil servants in the different ministries. Are they properly equipped to manage the Ministries for which they are responsible?
Enforcing accountability and ensuring good governance in the public sector, at the end of the day is the responsibility of each of the Permanent Secretaries in the different Ministries. Through this audit report, the Auditor General is once more drawing their attention as to what needs to be done in order to follow a road map away from bad governance, towards good governance.
An obvious unwritten conclusion of the audit report is that some of the Permanent Secretaries are definitely not fit for purpose. The fact that none have resigned or been fired since the publication of the audit report speaks volumes.
published in The Malta Independent on Sunday: 24 December 2023
Blog ta' Carmel Cacopardo 