A magisterial inquiry into the operations of the Foundation for Tomorrow's Schools found violations of public sector procurement regulations which did not constitute a crime in terms of the law.

The report was tabled in parliament yesterday by Justice and Home Affairs Minister Tonio Borg along with reactions by Attorney General Silvio Camilleri.

Education Minister Louis Galea in a statement noted with satisfaction that Opposition's allegations of "serious abuses, if not corruption" were not proven in his regard, his ministry's, the chairman or the board of the foundation.

The inquiry was carried out by duty magistrate Consuelo Scerri Herrera at the request of opposition education spokesman Carmelo Abela.

The magistrate said the time had come for violation of government financial regulations to be considered a crime since funds given by the governments to bodies such as the foundation were, after all, the people's money.

Dr Galea said the non-observance of financial administrative regulations in the awarding of a number of orders by the foundation was not hidden and both the government and the FTS were taking all necessary action. The foundation was right in taking steps when it became aware that financial regulations were broken. However, it did not result that there was corruption.

He said the shortcomings were the result of zeal to carry out the work at the schools with haste so that they would be completed in time of the opening of the scholastic year.

It was perhaps time that the financial regulations or/and the structures involved, to became more efficient so as not to hinder those who were zealous in carrying out their work. There had to be a proper balance between efficiency, lack of procrastination and the right controls - a balance which today appeared to be difficult for one to find.

The inquiry found that a public officer at the Education Division, George Camilleri, claimed overtime from both the Education Division and the FTS and was paid Lm811.23 twice for the same work. The FTS reported the case immediately and the permanent secretary at the Education Ministry had taken steps and recouped the money in November 2003.

The magistrate recommended that criminal action be taken against Mr Camilleri. The Attorney General also said that there was sufficient evidence to charge Mr Camilleri.

In her report, the magistrate said she also wanted to draw the attention of the Commissioner of Police to comments made to the inquiry by Alfred Ferrante, former CEO of the foundation, which seemed to indicate favouritism by architect Conrad Thake in the engagement of certain architects who were either Mepa employees or related to the minister.

In his reaction, the Attorney General said that "the magistrate did not receive the evidence of the architects towards whom Dr Thake allegedly showed favouritism and which, in the magistrate's view, could amount to the offence of embezzlement".

Dr Camilleri noted that "the hypothesis of an offence of embezzlement is an allegation of a very serious criminal offence which carries with it a maximum punishment of six years' imprisonment and which clearly falls within the scope of an inquest under the Criminal Code, as against allegations of an administrative or regulatory nature which do not raise criminal law issues and as such do not fall within the purview of such an inquest.

"It was therefore within the function of the magistrate conducting the inquest, once the magistrate had concluded that further investigations were necessary, to determine whether the offence of embezzlement had been committed, to fully investigate such a serious allegation to determine whether a criminal prosecution should be instituted.

"Indeed," he said, "it was incumbent on the magistrate to do so - and yet the investigations in this respect were not pursued by the magistrate."

On this point, Dr Camilleri concluded that "the facts alleged during the inquest, even if proved, could never amount to the offence of embezzlement under article 127 of the Criminal Code as suggested by the Magistrate conducting the inquest."

He said that it did not result that there was any misapplication or purloining of the elements of the offence of embezzlement. However, Dr Camilleri said, he had requested the police to carry out further investigations but there was nothing which lended support to any possibility of an offence.

Dr Camilleri said that he had also asked the police to question Mr Saviour Balzan on his allegations concerning persons appearing on behalf of others close to Minister Louis Galea or who are in partnership with him. But once again, he said, no criminal offence had been established.

The Attorney General also reacted to a complaint by the magistrate that she was not given enough assistance by the police to hold the inquiry.

Dr Camilleri said Mr Abela had opted to file his report directly with the duty magistrate instead of the police, as was the norm, and at the same time, the Labour MP had made it clear in his report that he was not making his report to the police because he feared there would be "administrative difficulties".

Dr Camilleri said that "it was reasonable for the police to confess a preference to be involved in the investigation to the least extent possible and to having the witnesses heard at the law courts instead of at police headquarters."