• Only evidence of Cutajar's work was two calendar screenshots, four meetings and ITS organisational chart
• ITS hired Cutajar to do work she had no expertise in 
• Consultancy contract was backdated by at least a month
• Cutajar underdeclared income to parliament
• ITS could not show it needed a consultant in the first place
• NAO doubted claims made by ITS CEO and Konrad Mizzi's chief of staff

Updated 6.25pm with Cutajar's reaction

Rosianne Cutajar’s employment as an ITS consultant was "fraudulent", "irregular" and "in breach of all policies and procedures", the Auditor General has concluded.

In a damning report published on Tuesday, the National Audit Office (NAO) concluded that Cutajar’s 2019 contract was backdated by at least a month, that she was hired to do work she was not competent to do and that there was very little evidence to suggest she did any work at all.

This is the first time the NAO has looked into a state entity hiring an MP and its report comes just days after parliament's standards commissioner said he could not investigate the matter as it was time-barred according to the rules he is bound by. 

The NAO report was triggered by a request filed by Carmel Cacopardo, who at the time served as chairperson of ADPD – the Green Party, and who asked the auditor to investigate whether the contract constituted a misuse of public funds.

The ADPD said they now expect the police to press charges against those who allowed taxpayer funds to be defrauded. 

Cutajar, at the time a Labour Party MP, was hired as a consultant by the Institute of Tourism Studies in 2019 and resigned from that post in 2020 when she was promoted to junior minister.

Her consultancy role only came to light earlier this year, however, when chats between herself and Yorgen Fenech were leaked by author and blogger Mark Camilleri.

In those chats, Cutajar told Fenech “I’ve stopped giving a damn… I’ll become a consultant with Pierre of ITS, and pocket another wage.”

She then followed that with: “I don’t care, everybody pigs out”.

Cutajar reacted with defiance to the NAO report, saying she had not yet read it but that its conclusions were not necessarily true. 

"Just because there is no evidence doesn't mean I didn't do any work," she said. "I worked for every cent that I was paid."

What was Cutajar hired to do?

According to Cutajar’s contract, made public by The Shift News, she was hired as a consultant to ITS CEO Pierre Fenech on May 2, 2019.

The three-year contract required her to work for a minimum of 24 hours per week. By the time she resigned roughly eight months later upon her promotion to cabinet, she had earned a gross income of €19,195 from her ITS job.

That income was never declared to parliament, Times of Malta had revealed. The NAO report published on Tuesday confirms that.

According to the consultancy contract, Cutajar – an Italian teacher by profession who also worked as a journalist with Labour media station ONE - was to consult with Fenech directly and carry out tasks that included overseeing quality control, operations and business activities, reviewing financial reports and enforcing adherence to legal guidelines.

But the Auditor General found she was not qualified for several of those tasks – especially the ones requiring financial and legal expertise – and noted with concern that his office could barely find evidence that Cutajar did any work at all.

“In both these respects [financial and legal], Cutajar did not have the necessary expertise to fulfill these duties in a diligent and professional manner, thereby casting doubt on the rationale to engage the Consultant and the basis of her employment,” the NAO concluded.

Cutajar was unable to explain why she was given such a broad remit save for arguing it was “common practice” to do so. She said her work was only to coordinate the drafting of ITS strategy – something the NAO noted was not mentioned in her contract.

The NAO said Fenech failed to provide any documentation to justify hiring Cutajar in the first place, and also noted that the ITS board was never informed of the decision to hire her.

Six meetings and an organisational chart

The only evidence presented to the NAO to prove that Cutajar did any work in her almost eight months as a consultant were screenshots of calendar events of two meetings, the fact that she was sent ITS’ organisational chart, and journal entries of four meetings of another ITS official.

“The dearth of evidence casts doubt on what work was carried out,” the NAO said. “When seen in the context of earlier points raised by this Office regarding the irregular nature of this employment, the poor output, if any, of Cutajar aggravates concerns of negligence in the disbursement of public funds by all involved in this contrived engagement.”

When confronted with the meagre evidence for work, Fenech and Cutajar said she spent the initial months familiarising herself with ITS’s setup and operations and researching about higher education institutions. She said she was not requested to draft any reports.

But that did not go far in convincing the Auditor General, who concluded that “the unduly lengthy span assigned for familiarisation [was] considered unwarranted by the NAO given the expertise claimed as grounds for the employment of Cutajar”.

No proof that Cutajar’s job was needed

The NAO also could not find any documented evidence that ITS needed to employ a consultant in the first place.

“Despite the broad enquiries and the review of key documents by this Office, the need for this engagement could not be traced to any source,” the NAO said.

No ministry or ITS document ever mentioned the vacancy and the ITS board of governors was not even informed about it “despite the obligation at law for its involvement in such matters”.

The vacancy never even came up in minutes when the board discussed HR-related matters, and Cutajar’s role was not included in ITS’s HR plan, even after she had been hired.

Furthermore, the board’s minutes revealed that Cutajar’s job and her activity “remained obscure to the board throughout the period of her employment”.

The fact that she was not replaced when she resigned to assume a post in cabinet cast further doubts on the need for the consultancy in the first place, the NAO said.

CEO and chief of staff gave different versions

The NAO report noted inconsistencies in descriptions about the way in which Cutajar was handpicked and hired.

ITS chief Fenech told the auditor-general that he had discussed the need for a consultant at an April 2019 meeting with then-tourism ministry chief of staff Kevin Borg.

Fenech said Borg later informed him that after “consulting with the Ministry”, Cutajar was “deemed the idoneous candidate” and that the agreement was to hire the MP in a position of trust.

But no records of these exchanges were given to the NAO, and Borg denied having told Fenech that.

Borg – who the NAO said was less than forthcoming in his replies – said the ministry’s input did not extend “beyond a mere notification of the vacancy to a candidate, or a potential candidate to the employer”.

He also said he was not aware Cutajar was employed as a person of trust.

Reacting to the report on Tuesday evening, Tourism Minister Clayton Bartolo backed Fenech's version and said the report showed that "the tourism ministry of the time was involved" in Cutajar's hiring. He said he maintained full faith in the ITS CEO.

Cutajar’s job ‘in breach of policies and procedures’

The Auditor General also concluded that Cutajar’s recruitment was “in breach of the policies and procedures” regulating public sector employment and the employment of people in positions of trust.

When confronted with the list of regulations he failed to adhere to, Fenech pleaded ignorance and blamed Borg for not informing him about them.

But that was also insufficient to convince the NAO, which said ITS was ultimately the employer and therefore was in its responsibility to ensure adherence to the rules.

The report also noted with concern that then-tourism minister Konrad Mizzi could not remember anything related to his involvement in the matter, “thereby limiting this Office’s efforts at determining the extent and nature of the Ministry’s involvement”.

Furthermore, the NAO believes Cutajar was paid more than she should have.

According to a policy regulating consultants’ remuneration, the highest payable hourly rate was that of €18.59 in 2019. Cutajar was paid at an hourly rate of €21.63.

“The basis for remuneration set remained obscure and unsound, with the rate payable exceeding established thresholds,” the report said.

Contract was backdated

The damning report also noted the contract was fraudulent because it was backdated “by at least one month”.

Leaked chats showed that Cutajar told Yorgen Fenech about her intention to get the ITS consultancy job on July 11, 2019, while the official contract was dated May 2, 2019.

That meant she was paid for at least a month during which her contract was not even drafted, with the NAO noting that ITS’ first payment to Cutajar featured the settlement of “substantial arrears”.

When confronted about the anomaly, ITS boss Pierre Fenech told the NAO he was “incensed” with Cutajar as she knew she was already a consultant at the time.

Cutajar told the NAO she had texted in “a moment of anger” and that she was “not sure” why she had spoken about the employment as if it was yet to begin, as she had already done preparatory work in May.

The NAO said it was clear the date on the contract was incorrect, and known to be so.

“The financial beneficiary of this irregularity was Cutajar; however, the deceit was abetted through the actions of the CEO of ITS when agreeing to the disbursement of public funds he was responsible for administering,” the report concluded.

Cutajar did not declare all income

The Auditor General also found Cutajar failed to declare more than €14,000 in taxpayer income in 2019. He found she declared €74,000 but had gross earnings of more than €88,000.

The report said that while she declared her employment as MP and Commissioner for Simplification and Reduction of Bureaucracy in parliament in 2019, she did not declare her ITS consultancy.

Cutajar refused to answer the NAO’s questions in person or online and only replied to questions in writing.

The NAO accepted but stressed that this format was not in line with standard practices and “far from ideal given the centrality of Cutajar in this case”.

It also expressed concern over the fact that Konrad Mizzi and his then-chief of staff “offered limited cooperation” and failed to respond to crucial questions.

Times of Malta has sent questions about Cutajar's consultancy deal to Pierre Fenech, Konrad Mizzi and the police.

ADPD: Police must press charges

ADPD, whose then-leader Carmel Cacopardo triggered the NAO investigation, said it now expects the police to act. 

 "We expect the Commissioner of Police to immediately initiate criminal proceedings against all those involved in this abusive act which has defrauded the national exchequer, as well as against those who had the duty to stop it all but facilitated its happening through their inaction," party chairperson Sandra Gauci said.