The tourism authority has gone around €20 million over its allocated budget, with the government so far withholding the extra funds needed to pay its creditors.
Government sources told Times of Malta that the Malta Tourism Authority is currently projecting to overshoot its €108 million budget for this year by €21 million, without having secured prior approval.
The MTA has in recent weeks filed a request to be handed the additional funding, however, this has so far not been approved despite creditors starting to queue up demanding payment, sources said.
The authority has been told to give a detailed breakdown of the spending, which one senior government insider described as “difficult to justify”.
It is understood that Prime Minister Robert Abela was briefed about the matter earlier this month.
Tourism Minister Clayton Bartolo is expected to soon make a parliamentary statement about the situation at the authority when the MTA’s financial estimates are discussed in the House.
Part of the spend is understood to have gone towards paying salaries of staff needed at the airport to carry out COVID checks on all incoming passengers during the pandemic.
However, industry insiders say this would not have cost tens of millions of euros.
The MTA, they said, also appears to have splurged on “events, luxuries and sponsorships”.
These include overseas travel and pricey accommodation and entertainment for staff, as well as exorbitant sums on MTA-organised events.
The MTA has repeatedly faced claims of financial mismanagement.
MTA staff had repeatedly stayed in expensive Valletta hotels at taxpayers’ expense during entertainment events organised last year
Neither the MTA nor the Tourism Ministry replied to a request for comment.
In April, Johann Buttigieg stepped down as MTA chief executive after three years in the role.
No reason for his resignation was given, but it came at a time when the authority was facing criticism for the way it spends public funds.
The MTA’s former head of events – Buttigieg’s second in command – was effectively demoted in January after Times of Malta exposed how he had booked lavish hotel rooms using taxpayer funds.
Lionel Gerada, who used to handle most of the authority’s spending, was stripped of all decision-making powers and his role was subsequently abolished.
MTA staff had repeatedly stayed in expensive Valletta hotels at taxpayers’ expense during entertainment events organised last year.
The MTA’s events team had decided to stay at the prestigious Phoenicia Hotel for the two-week duration of the Christmas attraction, Fairyland, which the entity organised outside City Gate, Valletta.
The MTA also spent around €350,000 on promoting Malta’s entry to the song festival in 2021.
In 2020, parliament’s Public Accounts Committee had looked into the way MTA dishes out hefty sums in sponsorship deals for events.
That scrutiny had been paused with the committee instead turning to the controversial Electrogas energy deal.
Press reports subsequently showed how the MTA had handed out more than 200 major sponsorships to event organisers during the pandemic, including during the lockdown period.