MCAST was warned of payroll issues years before €2.3m fraud came to light

A public spending watchdog raised alarm about the lack of proper payroll controls at MCAST, ahead of a €2.3 million swindle allegedly carried out by its finance manager.

Former PN councillor Francine Farrugia was on Thursday charged with embezzling large sums from the education institution, through “double salary” payments to her accounts and Revolut.

Alarm bells about the lack of internal payroll controls at MCAST were first raised back in 2019 by the Auditor General.

An audit by the National Audit Office turned up “various inaccuracies” after a random test of allowances and payments by MCAST to its employees. 

“Although if taken individually, amounts were not always material, the incidence of inaccuracies is of concern,” the Auditor General wrote.

MCAST confirmed during the audit that the payroll’s inbuilt validation system “does not function”.

“As a result, if an obvious error is recorded, for instance, 100 hours of overtime are inputted by a lecturer for a particular day, this is not being automatically flagged by the system,” the Auditor General said.

MCAST pledged to have such a system in place “by the first quarter of 2021”.

Fast forward two years, and a follow-up audit found the payroll validation system was still in “testing phase”.

In the meantime, MCAST told auditors that management was carrying out a random 5% payroll sample on a monthly basis, before releasing payments.

The Auditor General’s own random sampling, however, was quick to flag overpayments.

From a sample of three employees, it was found that one employee was receiving an allowance they were not entitled to, and another employee had to refund €7,000 for salaries “erroneously paid” while on parental leave.

“Such instances reconfirm that certain mistakes are still being made in the computation of salaries. This implies that thorough checking is not being done before each payroll run,” the Auditor General said.

In response to the audit, MCAST again pledged to have an inbuilt payroll verification system set up by September 2023.

'Double salaries' discovered by police

A court heard on Thursday how Farrugia “did double salaries” between September 2023 and May 2025.

It was confirmed during the sitting that the alleged crime was not uncovered by MCAST, but by the police.

Her bank accounts were analysed and showed that she had transferred €422,420 there and €1.9 million into her Revolut account.

The police contacted MCAST in July to inform them of the investigation and prevented a €122,000 transfer to Farrugia's account. 

Police found that Farrugia had bought a property in Malta and entered into several promise-of-sale agreements on other properties. She also bought vehicles and luxury clothes during the two-year period.

She spent €113,000 at Harrods in London on clothes and jewellery, the court was told. 

Farrugia has denied all criminal charges. A court denied her bail and remanded her in custody following her arraignment on Thursday. 

Education Minister Clifton Grima said he felt "anger" and "disappointment" at what had transpired but stopped short of ordering a probe into MCAST's financial processes. 

Instead, he said the college would continue to "safeguard the principles of good governance, accountability, and transparency.” 

On Friday, MCAST said it had suspended Farrugia, adding that "an external audit is underway".