Police to investigate possible fraud in schools transport

The police have been asked to look into the findings of a report by the National Audit Office which concluded there was strong evidence that overpayment for state school transport services "was carried out fraudulently".

The report, tabled in parliament yesterday, estimates 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. This excluded "overpayments resulting from amalgamated trips which could not be effectively audited", it added.

The overpayments, the report says, "arise from trips not performed and phantom routes included in invoices for payment".

The NAO informed the government's education division about the possibility of fraud and the division, in turn, yesterday asked the police to investigate.

Entitled "Performance audit - School transport system", the report notes that the school transport section, falling under the education division's operations department, is responsible to plan and manage school transport. "The section is poorly managed by one official whose duties range from planning and setting routes to finalising payment for the service," the report notes.

During the 2001-2002 scholastic year, close to 90 per cent of the 18,718 eligible students attending 83 different schools made use of the service provided by 739 vehicles, at a cost of about Lm1 million.

The audit, carried out by the NAO's value for money section, focused on the operations, management and control of the service provided. It also addressed reliability, quality and the financial aspect of the service.

The audit obtained views of heads at all schools making use of student transport. End-user perception was also tested through a statistically-determined sample survey of over 600 students and/or parents.

Although, on average, end-users declared themselves satisfied with the level of service, shortcomings were identified. The school transport section was found inadequate in carrying out planning and managing the service due to a severe lack of human resources. Following union directives, the majority of school heads refrained from taking responsibility for monitoring the service.

Lack of ownership, combined with the inadequacies at the education division, opened the way to service shortcomings and possible abuse in payments, the report said.

There was unduly early morning pick-up times; long periods of afternoon unsupervised waiting; inconsistent pick-up times; missed trips; trip amalgamation; over-crowding and lack of supervision during the trip.

Throughout the audit period, the education division was carrying out negotiations for a new agreement with the only three transport service providers. Providers maintain a common front with the consequence of strengthening their negotiating position.

The NAO report proposes recommendations aimed at enhancing service delivery through:

¤ more formal responsibilities being included in the service contract currently being negotiated;

¤ more efficient planning, management and control at division level and

¤ a more effective monitoring function through a greater ownership of the system by schools.

Nationalist MP Dolores Cristina asked in parliament whether it was true that the Minister of Education had failed to act on a report by the Auditor General four months ago dealing with fraud to the tune of Lm100,000 in the education transport system as had been claimed by opposition education spokesman Evarist Bartolo.

Education Minister Louis Galea said Mr Bartolo had in fact been referring to yesterday's report.

The fact that reports being processed by an institution such as the NAO were leaked out was something which both the Auditor General and relevant departments should see to because it was a practice that could be damaging.

However, Dr Galea added, it was not true that the education division did not take action. The Auditor General had sent him a draft of the report on July 30 after having informed him about it some time earlier.

As soon as it was in possession of the report, the division embarked on investigations to ensure that things were done in the correct manner.

Dr Galea said he had inherited a school transport system that was not regulated in any way. Fee adjustments used to be made from time to time but no established conditions governing trips were in place.

The minister said he had tried to organise the trips and negotiate a package with the three public transport providers, ensuring that the remuneration they received was reasonable for the service they were giving the division and laying down a number of conditions. These included the requirement that children could not be taken to school more than an hour before classes started and also that they could not be taken back home later than one hour from the time school ended.

The auditor's draft report, Dr Galea said, arrived when the package was being discussed.

The report was evaluated by the division so that it could submit its reaction to the auditor and also to take the necessary steps.

The system started being monitored by top division officials in order to ensure that what the auditor was requesting would be delivered.

Now that the report was published, it would be passed on to police so that criminal steps would be taken, Dr Galea said. (The government yesterday released a copy of a letter sent by the education division's director general, Charles Mizzi, to the Police Commissioner. Mr Mizzi asked the police to investigate the possibility of fraud in the payment of school transport. The letter included a copy of the NAO's office.)

Dr Galea said in parliament the report proved that the country's auditing and accountability mechanisms were working.

Labour leader Alfred Sant enquired about the administrative analysis in progress and whether it had been internally established that payment had been effected for transport which in fact was never provided.

Dr Galea replied that internal investigations continued. He was not in a position to say that what the auditor was saying had resulted or not. It was being studied. However, for the next scholastic year, there was a mechanism in place aimed at guarding against such abuse.

Dr Sant pointed out that whereas the Auditor General had concluded that fraud had been committed, the education division was still unable to agree with such a conclusion notwithstanding the fact that four months had gone by.

Dr Galea said the division had not yet concluded its investigations. He also pointed out that he had been given the draft report on July 30 and not four months ago.