Internal report proves elusive

The Education Division's two most senior officers yesterday told the Public Accounts Committee they had never viewed the internal audit report quoted by the National Audit Office in a performance audit on the school transport system.

Among other things, the NAO report, laid on the Table of the House last September, concluded there was strong evidence that overpayment for state school transport services "was carried out fraudulently".

It estimated the overpayments at 10 per cent of total payments last year. Extrapolating the figures worked out in terms of the sample used on the full school population making use of the service, the NAO said the overpayments would add up to Lm89,490.

Opposition member Evarist Bartolo said he had good reason to believe that the internal audit report, dated July 12, 1999 had already indicated abuse and serious shortcomings in the system.

But both Paul Attard, permanent secretary at the Education Ministry, and Charles Mizzi, director general at the education division, said they were unaware of such a report.

NAO staff who worked on the school transport performance audit told the PAC they had seen the report in question when examining the files belonging to the department.

Mr Attard said that when he had taken over as permanent secretary in 2000 he had collected some 500 reports that were scattered here and then but the said internal audit report was not among them.

Mr Mizzi said one had to be careful as the education division had its registry and other divisions had their own registries.

At the beginning of the meeting Mr Mizzi said that following the NAO report steps had been taken to improve the situation but the management structure had not yet been strengthened. However, there had been changes in the internal control system that issued school transport payments.

The assistant director responsible for financial administration, Anthony Cachia, who assumed office only this March, said that arithmetical errors had been identified in the accounting system and the person assigned to do the job had now been changed.

Action was also taken to ensure that the route register at the division was identical to that in every school and this would contribute to checking the issue of "phantom trips".

Thirdly, a new system was introduced as to how the "trips not performed" formula was raised and filled.

Mr Bartolo said he could see none of the persons directly responsible for the school transport system present for the PCA meeting.

Mr Mizzi replied that the person who used to be directly responsible for the system was not a civil servant but a Public Transport Authority employee seconded to the division. The division felt it should be its own officials that should face the PAC rather than ask the people involved to attend in view of the ongoing police investigations into the matter.

Mr Mizzi told the PAC that procedures with regard to the transport service were tightened when compared to last year and a new contract with service providers had also been signed. The division had realised there existed a cartel and, in fact, the service providers had insisted that the contracts should be negotiated jointly rather than individually.

He said the division faced a shortage of human resources and in fact a number of services were being run on a shoestring. It was not possible to dismantle one service in order to strengthen another. Mr Mizzi said he saw no solution unless the right complement possessing the necessary skills and qualifications was made available.

The point was also picked up by Mr Attard who pointed out that a middle management problem existed throughout the whole civil service. For example, there were 129 senior principals in government employ and the education ministry only had four. There were a total of 557 principals but only 30 of them served in the ministry.

In conclusion, Mr Attard said the ministry and the division were determined to trace the person/s responsible for the abuse indicated in the NAO report and also to strive to recoup the public funds that were mishandled.

PAC chairman Leo Brincat said the proceedings of the sitting together with the comments made in the NAO report would be brought to the attention of the government's Management and Personnel Office in order to make it aware of the "precarious situation" depicted by the ministry and division officials.