Arts Council Malta has said it has already taken action to address criticism of its financial systems in a damning report by the National Audit Office.

The NAO report found that the council had prepared no financial statements for the last two years. It also highlighted the “habitual” use of direct orders amounting to €2.1 million last year and the failure to hold board meetings as required by law.

In a statement on Wednesday, the Arts Council said it had taken the report on board and “welcomed its recommendations to improve its financial systems”.
The council said its external auditors were currently finalising the 2016 financial statement, which would be finished by the end of the month, while the 2017 statement was expected to be finalised by next April.

Board meetings, it said, had been held regularly and in accordance with the law throughout 2018, after the report found that only three - below the legal minimum of six - had been held last year.

The council, however, defended its use of direct orders, which the NAO said should be used only on in “exceptional” cases, on the basis that 69 per cent of these orders were of an artistic nature, where procurement is typically carried out in this way.

“This is fully permissible, accepted as good practice and in accordance with the Government Public Procurement Regulations. It is also the practice adopted on an international basis by all ACM’s counterparts abroad,” the council said.

It also noted that the €2.1 million figure cited by the NAO included the work of two other entities, Żfin Malta and Pjazza Teatru Rjal, administered by the Arts Council.

It nevertheless reiterated its commitment, quoted in the NAO report, to reduce the number of direct orders not related to artistic work.

“Meanwhile, recruitment is underway for adequate human resources to strengthen the Council’s finance, procurement and administration departments in order to ensure that the NAO recommendations are fully implemented during 2019,” the council added.

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