Vitals Global Healthcare should have been disqualified from bidding for a hospitals privatisation deal as the government had signed a memorandum of understanding with them before a request for proposals was issued, the Auditor General told a public inquiry on Friday.
Testifying at the inquiry into the assassination of Daphne Caruana Galizia, Charles Deguara said that when his office had requested a copy of that MOU, they were originally told that it “had not been found,” only receiving the document at a later stage.
The NAO had subsequently reported plainly and clearly that the signing of that MOU prior to the issue of the RFP “was wrong” and should have led to the disqualification of the tender.
Describing both his office and that of the Ombudsman as an “office of oversight,” Deguara explained that since they lacked executive power, their only option was “to name and shame,” publicly pointing out who cooperated and who did not.
The Vitals case was the only one encountered throughout his years in auditing experience, where an MOU had been signed in such manner, the board was told.
Although each case that came up for scrutiny was to be assessed on its merits, the general yardstick to be used was that of good governance, Deguara said, likening the office’s role to that of a doctor who examined the patient and prescribed the necessary medicine.
“We can only give the government that medicine. Then it’s up to the executive to implement or not.”
Asked whether the NAO carried sufficient clout, Deguara replied in the affirmative, explaining that if as an auditee he failed to hand over any requested document for audit and was consequently named and shamed, he would “not sleep at night.”
But did the government take note of the auditor’s reports, the board asked.
Over 80% of recommendations issued by the NAO were addressed, said Deguara.
Although that figure was a “positive indication” there were a number of systematic failures that needed to be flagged.
Large-scale projects call for adequate planning which, unfortunately, was generally lacking, the board heard.
Before embarking upon such projects, the need must first be identified and then followed by a clear expression of interest, with the greater the number of tenders the better.
Once bids are submitted, the adjudication must be handled in a clear and transparent manner, Deguara said, stressing that such criteria were “a sine qua non.”
Proper project management was another systematic failure as was the lack of record-keeping.
About the latter, Deguara said that his office has constantly harped upon the need for the keeping of meeting minutes, not only as memory aids but also to ensure continuity and transparency. “We’re fed up of saying the same thing. It feels like a voice in the desert,” he exclaimed.
As questions turned to the Electrogas project, Deguara said that the auditor had been handed “almost all information.”
As for the Montenegro wind farm project, an internal audit was being carried out by Enemalta but the NAO had never been tasked with running an audit on that.
Another topic touched upon during Friday’s testimony was the office of the chief of staff which, Deguara said, was a political role to be kept distinct from that of the permanent secretary who had an executive function. Should a chief of staff retain a footing in the business world, the judges asked.
“As a citizen, I would say no. But as an auditor we’ve never audited that,” came the reply. However, there was a code of ethics and it all depended on the individual concerned.
When projects were not handled well, the important thing was to flag the shortcomings so that lessons might be learnt and wrongs are not repeated, Deguara concluded, pointing out that journalists played an important role in this regard.
The inquiry continues on Monday.