The Manoel Theatre has made insignificant progress in improving management problems first flagged by the Auditor General in 2018.
In a follow-up report published on Monday, Auditor General Charles Deguara said the theatre had only made adequate progress in implementing 25% of the National Audit Office's recommendations.
Some of the persisting issues include failures to abide by public procurement rules, the lack of an adequate fixed asset register and the failure to produce timely management accounts.
In its report, the National Audit Office noted several instances where contracts awarded by the theatre were not being published in the Government Gazette, as per requirements.
This included a €1.7 million contract for finishes, joinery, lighting, and sanitary works signed in May 2021.
The audit uncovered how the theatre also failed to seek permission from the Finance Ministry to grant four direct orders.
On the financial management front, the Auditor General said the theatre’s board of directors was not being given adequate and timely access to management accounts.
The National Audit Office had emphasised in its 2018 report how “adequate and timely accounting information” not only assists in the day-to-day operations of the theatre but also in the creation of policies through which targeted goals are achieved.
Furthermore, the theatre was found to have an “incomplete” fixed asset register in place.
By way of example, improvements to the premises, as well as several other tangible assets totaling €3.8 million in value, were not included in the fixed asset register.
Other items such as restoration and structural works were marked as intangible assets in the register, with the officer in charge claiming that they did now know how to report such expenditure, the Auditor General said.
The report says the theatre was “urged” to compile a more reliable and complete asset database, to keep track of asset values.
A lack of progress was also noted in the theatre’s management of capital expenditure.
The theatre’s management confirmed to the Auditor General that a budget for capital expenditure was still not compiled.
It was noted how despite the number of ongoing capital projects, EU funds that were available for these projects had not been tapped by the theatre.
The Auditor General said the theatre's board had also failed to hold regular board meetings. Although the board is meant to meet at least once every two months, only five board meetings were held during the financial year ending August 2022.
One area of improvement noted by the Auditor General was in the preparation of audited accounts. In its 2018 report, the National Audit Office said that the last available set of audited accounts dated back to August 2013.
This time around, the theatre was able to present audit accounts up until August 2021.
However, the audited statements for 2022 were not yet finalised, the Auditor General said, even though they were meant to be presented to the Culture Minister by October 2022.
Last year, the theatre's CEO Massimo Zammit was suspended amid allegations of misconduct ranging from financial mismanagement to workplace harassment and unprofessional behaviour, according to a report drawn up by an external board.