Many government entities make a habit of flouting procurement rules, often resorting to “irregularities” to keep their services running, according to a review of government spending throughout 2022.

This was revealed in a wide-ranging report published by the auditor general on Monday, following a series of 26 financial and compliance audits into public spending.

The review found a litany of such irregularities, ranging from backdated contracts to contracts awarded without a public call and services being charged to ministries long after the contract has expired.

In several cases, entities were found to have awarded contracts without approval from the finance ministry and without issuing the necessary paperwork.

In some instances, this was down to “inadequate planning”, with entities forced to resort to these methods or face their services being disrupted.

Negotiated procedures, backdated approvals

One culprit, the Ministry for Active Ageing, is chided for its “frequent” use of negotiated procedures, a form of procurement in which only firms invited by the entity are allowed to place a bid, as well as for continuing to use service providers after their contracts have expired.

This, the auditor general says, “departs from the spirit of the public procurement regulations and hinders competition”.

In one instance, repeated negotiated procedures were used to keep a company providing meals for elderly homes on board, instead of issuing a new tender.

In total, the company was paid €5.4m to provide this service between 2016 and 2023, despite its original contract having expired in December 2015.

A similar practice was adopted for the provision of other services, such as cleaning and domiciliary services, with approvals often found to be backdated.

37 direct orders to a single company in a year

The Ministry of Active Ageing is far from the only offender.

The Gozo Ministry, the report says, is characterised by its “habitual bypassing of procurement regulations”. The ministry is found to have repeatedly split higher-cost services into multiple contracts each costing just under €10,000, seemingly to avoid procurement rules.

The ministry issued 37 direct orders to a single company for security services in the space of just under a year, between December 2021 and November 2022, for a total of €209,000. This despite that very same company already having earlier won a tender for security services that was still in force.

Similar irregular arrangements were found for several other services across the ministry, from project management to clerical services, where several clerks were found to have been engaged directly without the approval of the finance ministry.

Weak checks and balances

More broadly, several entities were found to have “insufficient” internal controls, meaning that the necessary checks and balances to ensure that procurement rules are followed are missing.

In several cases key information, such as the planned completion date of a project, was missing altogether, making it impossible to judge whether targets were met in time. In others, there appeared to be little oversight over spending or record-keeping.

Some entities buck the trend, with the auditor reserving praise for the Malta Council for Science and Technology in particular. The report highlights MCST’s “accountability, transparency and overall good governance”, praising its practice of independently auditing projects before issuing final payments.