Education Minister Louis Galea and the Foundation for Tomorrow's Schools will shortly publish a document that "will take the Auditor General's report to bits", Dr Galea said, describing the report as shoddy and littered with mistakes.

The report, tabled in Parliament two weeks ago, speaks of "serious shortcomings" in the way the foundation carried out its business, saying basic rules of good governance and accountability of public funds, as contemplated by the financial regulations, "were widely disregarded or circumvented".

Asked by The Times to explain the shortcomings, Dr Galea said the foundation's board was going through the Auditor's report "chapter and verse" and would be showing it to be "full of flaws".

"We would have preferred not to have to do this. Had the Auditor General given the foundation a copy of the draft report, the inaccuracies it contains would have been highlighted internally and the Auditor would have had the opportunity to verify that things were not as he portrayed them to be," Dr Galea said.

The minister said the Auditor General had "lightly dismissed" the problems that the FTS had inherited when it was set up and failed to see that its vision and way of doing things was different.

"In more than one instance the Auditor criticises the foundation for doing more with less. For instance he used as his benchmark the costs that were involved in building the school at Santa Lucija, most works for which had been completed before the FTS came into being. That school cost twice what it would have cost had it been built as a private school and took at least three times as long to build.

"He then criticised us because the FTS designed cheaper schools and saved large amounts of money, such as with Sir Adrian Dingli Girls Junior Lyceum and now the new secondary school at Karwija. He even goes one step further, questioning how it could be that education department staff the FTS used on these projects were more efficient than those in the private sector."

In many instances where the Auditor General said the foundation issued direct orders, these were indeed in line with the public service procurement regulations of 1996 and in some instances tenders were issued, or quotations collected, and files that prove it still exist, Dr Galea said.

"In other instances the Auditor says that suppliers were awarded direct orders when the Auditor himself comments that the same suppliers had a period contract with the Department of Contracts and hence it was normal practice to buy through such suppliers at the pre-established rates.

"In instances where the Auditor remarked about purchase of single items that seemed expensive, more than one item had been purchased at that price. The Auditor said a photocopier and accessories were bought for Lm2,498 when in fact two were bought and a tender was issued. He criticised the purchase price of a single-door fridge when the relevant invoice clearly shows that six were bought. He criticised the FTS for spending Lm10,710 for a lift on a direct order basis and for another direct order of ventilation plant and equipment valued at Lm4,832 when tenders were in fact issued.

"When the Foundation for Tomorrow's Schools was set up, there were teething problems and there were some problems with procurement regulations not being strictly adhered to in a number of instances. This was rectified as soon as we got to know about it even though the mistakes committed were not made so that anyone would pocket anything but to speed things up.

"The Auditor states that Lm2 million were given in direct orders. The amount was actually Lm1.758 million and of these only Lm270,000 were questioned as not having been according to the procedures. But when this came to light in 2003, the issue was addressed. Indeed, since then, many orders have been approved by the Ministry of Finance as well.

"Had the people involved in those 'breaches' been working in the private sector they would have been given a performance bonus but because public funds were involved they got rapped on the knuckles instead and some people lost their jobs," Dr Galea said.

"I used to insist with the FTS board that they had to be more efficient than the private sector but do things the way the public sector does them where the spending of money was involved. After those unfortunate episodes involving the non-observance of procedures, things went smoothly.

"Well, smoothly... when you go according to the book, you have to wait longer. In some instances it took a year and seven months between putting a tender together for the construction of a number of lift shafts and ramps to the final award by the Department of Contracts. The Auditor does not worry about the hardships that such a delay causes to a child with special needs attending a school where these services are needed," Dr Galea said.

"We are now drawing up a report and we are basically doing what the Auditor should have done. I will be ready to reply to any questions before the public accounts committee, in Parliament and anywhere else.

"If Super One were to give us three hours of air time, we could show them where the Auditor went wrong."

Dr Galea said the Auditor had criticised the foundation for giving work to cooperatives made up of government employees and which were paid out of public funds.

"Instead of leaving them idle the FTS made use of this resource but instead of patting the foundation on the back for using these people, the Auditor criticised it. We have now stopped utilising them and one of the cooperatives has folded," Dr Galea said.

The minister questioned whether it was acceptable that an institution paid out of public funds could produce such "a shoddy report" that was littered with mistakes.

"It took the Auditor two-and-a-half years to produce this report. His profession is verification. But the report makes us doubt whether they are able to do that. What I am I supposed to do now, sit back and shut up not to criticise the Auditor? I will not take this lying down," he said.

Dr Galea said one of the most baffling things was that the report spoke of tenders, direct orders and other issues but nowhere did it feature the repercussions that carrying out the jobs had on students, parents and teachers.

"As a politician, I insist on observance of financial regulations and I can say that there is probably no government agency that is rigorously following financial procurement regulations as the FTS is.

"But I have a political responsibility towards children, parents and teachers too and I am committed to deliver better schools for the future and I intend to do that come what may," Dr Galea said.

"I cannot accept a report that is so riddled with mistakes. The report was used in an intensive campaign by the Malta Labour Party. Journalists testified before an inquiring magistrate who probed the same issue and found no criminal wrongdoing and accepted evidence that 80 per cent of those being given construction tenders came from my district.

"The magistrate did not even bother to verify this or ask FTS or myself about it. We checked it later. I guess there are some 80 per cent of construction contractors in my districts. Only eight per cent of the tenders went to people in my district and I had nothing to do with them.

"There were claims of nepotism, of FTS engaging an architect who happens to be my wife's cousin. It also happens that this architect is also related to former Labour MPs Joe Cilia and Louis Buhagiar," Dr Galea said.