Eight out of every 10 recommendations by the National Audit Office for better financial and compliance standards with respect to government expenditure across various entities have been partly of fully implemented.

However, some of the issues flagged at the Malta Film Commission, the VAT Department and Mater Dei Hospital have not yet been addressed.

An evaluation of the level of the implementation of recommendations was carried out by the NAO in a follow-up report which focused on eight audits carried out in recent years.

These were: procurement at the Armed Forces, government expenditure on Church Schools, revenue from trading licences at the Commerce Department, expenditure by the Foundation for Educational Services, revenue collected by the Malta Communications Authority, internal controls at the Malta Film Commission, expenditure on medicines and surgical materials at Mater Dei and the level of internal control on the expenditure at the VAT Department.

In general, most of the recommendations had been addressed or were in the process of being implemented. However, there were some areas where no or little progress had been registered.

Mater Dei

The NAO had issued a set of recommendations following an audit made in 2016 which had revealed shortcomings, including on issues related to the management of the allocated funds, security controls and stock records.

Four years down the line, the Office noted that, over the last months, efforts to address the situation had been hampered by the coronavirus outbreak which directly impacted the supply of medicines and surgical materials.

While acknowledging that progress had been registered in areas like the security and the management of stocks through computer records, it pointed out that there was much room for improvement within the overall operations of the Central Procurement and Supplies Unit. The latter insisted such progress depended on a reasonable injection of financial recurrent expenditure and human resources.

Areas which had not been addressed included concerns on discrepancies between actual supplies delivered and those recorded on the computer system.

Insignificant progress was reported with respect to the recommendation to furnish the Auditor General with a stocktaking report.

VAT Department

In a 2015 audit, the NAO had raised concerns on a lack of internal controls within the human resources and payroll function, while non-compliance with procurement regulations in the provision of legal services had also been flagged.

In a significant development last year, the department was integrated with the Inland Revenue and, consequently, the administration and HR were merged.

In its follow-up report, the NAO noted the considerable efforts undertaken by the VAT Department to address the shortcomings but said the need for the enhancement of controls in specific areas persisted.

Insignificant progress was registered in terms of temporary absence records as no copies for logbooks outlining outdoor activities by VAT inspectors was furnished.

A more serious shortcoming which had not been addressed related to non-compliance with public procurement regulations whereby the department was awarding contracts, such as for legal services, without a call.

Film commission

In 2016, the NAO had flagged control issues with respect to allowances paid to officers with salaries, in some cases, exceeding the amounts stated in the organisational structure. 

It transpired that by the start of this year the organisational structure had not yet been updated while divergences between the salaries and allowances paid to officers as per payslips and those stipulated in employment contracts were again noted. 

Following queries raised during this follow-up, in November 2019, the Film Commission carried out an exercise to align salaries and allowances paid to its staff with the employment contracts.