ARMS Ltd continued to hire more meter readers even after it introduced automated electricity and water readings, according to a new audit which found the utility billing company has a generally bloated staff.

A confidential draft of an unpublished Auditor General report questions why ARMS kept on hiring more meter readers between 2012 and 2020, leading to higher spending on salaries.

In fact, the number of meter readers increased by 43 per cent during that time, rising from 30 to 43.

The National Audit Office says in the report that the introduction of remote meter reading technologies should have led to meter readers playing an “increasingly diminished role”.

While the report acknowledged that meter readers remain important when it comes to verifying the accuracy of smart meters, the Auditor General says it is “questionable” whether the number of such employees is strictly necessary considering the increase in the number of automated readings obtained by ARMS.

The audit found a general bloating of staff at the state agency, leading to an increase in spending on salaries and wages from €2.6 million in 2012 to €7 million in 2020.

Spending on salaries increased from 39 to 61 per cent of ARMS’ expenditure

This meant spending on salaries increased from 39 per cent to 61 per cent of ARMS’ total expenditure during the same period. Between 2012 and 2020, the number of staff at ARMS increased by 119 per cent, from 135 employees to 296 employees last year.

The Auditor General contrasted the rise in staff with an increase in the number of bills issued by ARMS of “only” 18 per cent during the same period.

This increase in staff has seen the cost of wages and salaries per bill issued by ARMS shoot up from €1.39 in 2012 to €3.17 last year.

The NAO had words of praise about how the introduction of smart electricity meters had led to a reduction in losses from unbilled electricity consumption.

The same could not be said for the system used to monitor water consumption, with the NAO stating the “questionable smartness” of the technology used for remote water readings led to “various technical faults”.

While apparent losses for unbilled electricity consumption decreased from 7.64 per cent to 1.42 per cent with the introduction of smart meters, the report says unbilled consumption of water remained stable at 30 per cent of total supply.

A study by ARMS and the Water Services Corporation (WSC) calculated that there are 17,928 water meters flagged for inspection due to suspected faulty readings. The NAO said it is “abundantly clear” that there is a significant gap between the cost of introducing the remote water reading systems and the ensuing financial savings by ARMS.

Over the past months, WSC and ARMS implemented an intelligent algorithm that identifies meters requiring an inspection.

These algorithms are an effort to smarten the remote data acquisition technology from water meters, the NAO said.

ARMS has faced criticism in recent weeks after Times of Malta revealed that the same draft NAO report found that consumers could have paid “extra charges” totalling €6.5 million on their electricity and water bills.

NAO reacts

In a statement later on Friday, the NAO said it "strongly deplores" the fact that draft extracts still under discussion with interested stakeholders "are being leaked by person/persons extraneous to the Office". 

"Indeed, as established by international auditing standards, the NAO is in continuous engagement with these principal stakeholders involved who, in a spirit of trust and transparency, are continuously kept up to date on our work on such assignments. 

"Thus, the NAO regrets such irresponsible leakages from persons whose only intention is clearly to sabotage the work of this Office for their own particular agenda."

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