AL­FRED GRIXTI Not pleased with how NAO slammed Sedqa in report

Malta Independent - - FRONT PAGE - Kevin Schem­bri Or­land

Foun­da­tion for So­cial Wel­fare Ser­vices (FSWS) CEO Al­fred Grixti was not pleased with the way the Na­tional Au­dit Of­fice (NAO) han­dled the Agen­z­ija Sedqa au­dit find­ings that caused some con­tro­versy ear­lier this year, but has given as­sur­ances that ev­ery is­sue has been ad­dressed.

Last May, the Pub­lic Ac­counts Com­mit­tee held a hear­ing re­gard­ing the NAO’s report on Agen­z­ija Sedqa, the gov­ern­ment’s drug and al­co­hol abuse agency, which read that Sedqa had sub­mit­ted “fab­ri­cated and amended doc­u­ments” for the au­dit. The NAO also crit­i­cised some work­ers re­ceiv­ing ex­tra va­ca­tion leave, cer­tain pay­ments, etc.

The NAO had said: “Dur­ing au­dit test­ing, var­i­ous queries in re­spect of salaries arose; con­se­quently, these were thus for­warded to Sedqa for clar­i­fi­ca­tion. On five such in­stances, the NAO was pro­vided with ei­ther a fab­ri­cated or amended doc­u­ment. In two such in­stances, doc­u­ments for­warded fol­low­ing the NAO query were dif­fer­ent to the ones al­ready in its pos­ses­sion.”

As a re­sult, listed un­der ac­tion taken in a report re­gard­ing ac­tion on the NAO’s an­nual 2014 report, the fol­low­ing was writ­ten: “Dis­ci­plinary ac­tion will be taken in sim­i­lar cir­cum­stances. Sum­mary dis­ci­pline has been taken in the case in­di­cated by the NAO. In­struc­tions to main­tain proper records were cir­cu­lated among the staff.”

FSWS CEO Al­fred Grixti said that the two in­di­vid­u­als who were re­spon­si­ble, who held ju­nior ex­ec­u­tive po­si­tions, were un­der a lot of pres­sure.

“We still have a man­ual at­ten­dance sys­tem here. Ev­ery em­ployee has his or her own at­ten­dance, over­time, va­ca­tion leave, sick leave and time-off in lieu sheets. There are 100 em­ploy­ees at Sedqa, mean­ing that there are over 7,000 such forms in a year, given that we are paid ev­ery four weeks. Ev­ery­one was un­der the im­pres­sion that a few went miss­ing. In re­al­ity, they weren’t miss­ing. The NAO au­di­tors spent months at Sedqa, and spent a deal of time go­ing over these sheets in its pay­roll of­fice. At the PAC hear­ing I ar­gued that we ac­cepted it was a short­com­ing based on hu­man er­ror. If you have 13 files go­ing to and fro, taken by our au­di­tors, my un­der­stand­ing up un­til the PAC hear­ing was that they were mis­placed. The NAO, how­ever, then said that they weren’t mis­placed. I stood up and said it was en­trap­ment. I said I wanted an ex­pla­na­tion.

“Man­age­ment spoke to the work­ers in the of­fice con­cerned,” he said, re­fer­ring to those who sent the dif­fer­ent doc­u­ments. “It was only the at­ten­dance sheet that went miss­ing. They said they had been pres­sured and de­cided that they could re­com­pile the in­for­ma­tion us­ing other doc­u­men­ta­tion at their dis­posal, and get the sig­na­tures of the em­ploy­ees in ques­tion”.

He said that one mis­take was made: they wrote 2015 in­stead of 2014.

“I had spo­ken to the Au­di­tor Gen­eral, and I have noth­ing per­sonal against him or his staff, but this was re­ally un­fair.

“They re­ally pres­sured two peo­ple at the bot­tom of the food chain and they pan­icked and re­did the sheet. I’m not say­ing they did the right thing. I would rather have had these two em­ploy­ees come and say the in­for­ma­tion had been lost, but they were tricked into it.”

He handed this news­room a copy of the ex­pla­na­tion given by the two, which read: “On in­stances we were pres­sured to pro­vide doc­u­ments in­stantly, even though such doc­u­ments were al­ready handed to the au­di­tors. Nev­er­the­less, the au­di­tors kept in­sist­ing that we did not hand such doc­u­ments, there­fore we re­placed the orig­i­nal claim sheet since we thought it was mis­laid.”

Mr Grixti said: “I spoke to them the day after the hear­ing and then they wrote that state­ment. They have since asked to be trans­ferred to other units. “I hon­estly felt I should not take any dis­ci­plinary ac­tion, as they are young, in their mid-twen­ties.”

He said: “I think it was the daily phone calls, emails, etc. But the au­di­tors were also there, at Sedqa. I have since given in­struc­tions that they ask for re­ceipts when they hand over doc­u­ments to the au­di­tors. I had lost it dur­ing the Com­mit­tee when the NAO con­firmed that they had the doc­u­ment.”

No def­i­nite ap­proval for di­rect or­der

Another key find­ing in the NAO report was that there was no ev­i­dence of a def­i­nite ap­proval for a Di­rect Or­der on 29 Novem­ber 2014, the date on which the FSWS held an event in or­der to com­mem­o­rate the 20th an­niver­sary of the foun­da­tion of Aġen­z­ija Ap­poġġ and Aġen­z­ija Sedqa.

The NAO report read: “Var­i­ous ex­penses were in­curred, in­clud­ing that of ca­ter­ing ser­vices at a cost of €18,900. Ap­proval for a Di­rect Or­der was ob­tained in a timely man­ner, how­ever it was only granted ‘in prin­ci­ple’ and FSWS had to re­vert to the Fi­nance Min­istry for a def­i­nite ap­proval prior to any com­mit­ments be­ing made, once the ser­vice providers and ac­tual costs for the pro­vi­sion of ca­ter­ing ser­vices were known. Such def­i­nite ap­proval was not made avail­able for re­view and in­stead the same ‘in prin­ci­ple’ ap­proval was pre­sented to the Na­tional Au­dit Of­fice (NAO), ver­bally in­sist­ing that this was suf­fi­cient. This may im­ply that the ac­tual costs in­curred were not prop­erly au­tho­rised.”

Ex­plain­ing this is­sue, he said: “Even though this cer­e­mony was or­gan­ised by the FSWS, the bud­get was pro­por­tioned, so funds came out of Ap­pogg, Sedqa etc. On a tech­ni­cal­ity, and I ad­mit it was my fault, we re­ceived the ap­proval in prin­ci­ple, and then we went ahead. The NAO are say­ing that after get­ting the quotes, we should have gone back to get ap­proval. Did we abide by the pro­ce­dures, get­ting quotes, etc., the an­swer is a def­i­nite ‘yes’.

“At the be­gin­ning, to or­gan­ise this cer­e­mony, keep­ing in mind that Agen­z­ija Sap­port still came un­der the FSWS, we needed a venue big enough. The only one avail­able on the day was Bay Arena which, with ca­ter­ing, would come to around €40,000. The Min­is­ter said no, telling us to leave Sap­port out, since they had their own cer­e­mony a few years be­fore, and to cap it at 750 peo­ple. While we had an ap­proval in prin­ci­ple, we ended up spend­ing around €26,600 all in all, con­sid­er­ably less than €40,000. So, to be pre­cise, I didn’t go back but my rea­son­ing was that I had per­mis­sion in prin­ci­ple. The venue, the St Agatha Au­di­to­rium, ended up cost­ing €2,500. Ca­ter­ing came to around €18,900. We did not for­mally go back to show what we found but, come on, you need to be prac­ti­cal.”

Turn­ing to the use of a cer­tain ve­hi­cle the NAO report read: “Dur­ing the year un­der re­view, Sedqa was mak­ing use of a hired ve­hi­cle for gen­eral use by one of the Units within the Agency. Up to time of au­dit, the con­tract agree­ment en­tered into with this sup­plier was not made avail­able for ver­i­fi­ca­tion. Hence, it could not be as­cer­tained whether a valid agree­ment was in place and whether charge­able rates were cor­rect or not”. This, Mr Grixti said, went back to 2005. “Why wasn’t it flagged be­fore?” he said, while adding that this was Sedqa’s first au­dit. “Should a pub­lic en­tity like ours, in so many years of ex­is­tence, have been au­dited just once?

“I’m not be­ing par­ti­san, but I’m ask­ing this in terms of value for money for the tax payer.”

He said that now Sedqa will be au­dited once ev­ery other year.

On this is­sue, he said that an ad­vert for car rentals had been is­sued, and that they had filed the eval­u­a­tion report. What was miss­ing was the ac­tual writ­ten agree­ment. It had been ap­proved by the board and ev­ery­thing. At the time, how­ever, there was never wrote an ac­tual agree­ment. The ve­hi­cle sup­plier even con­firmed that a ver­bal agree­ment had been made and was sub­se­quently re­newed over the years with the same con­di­tions. “We have since re­placed that ve­hi­cle”, he said.

“In ad­di­tion, the NAO said that man­age­ment ‘claimed’ that the ver­bal agree­ment had been re­newed over the years. I took is­sue with them for us­ing that phrase. If I didn’t give you an an­swer that is one thing, but I send you a fully doc­u­mented an­swer and you use the word ‘claimed’? You are a jour­nal­ist, you know that the word makes a dif­fer­ence” he said.

There were a num­ber of is­sues men­tioned in the NAO report re­lated to staff, in­di­cat­ing that there was a sys­tem­atic prob­lem. “I think it is over­stated,” said Mr Grixti. “Sedqa had a bud­get of €3 mil­lion that year, and at the end of the day the over­pay­ment amounted to €741, so it’s not as if we were mak­ing over­pay­ments amount­ing to €7,000. I was ap­pointed to the post of CEO on 1 April 2014.”

Mr Grixti said that he had had no time to per­form a due dili­gence ex­er­cise that year, and that he had had to fol­low what the Foun­da­tion’s au­di­tors were say­ing in their re­ports. “For five years in a row, which in­cludes the one which they were con­clud­ing, they said that it was a clean sheet and that any short­com­ings were im­ma­te­rial. This means there were some small

short­com­ings, and thus the is­sue of over­pay­ments was con­sid­ered by the au­di­tors to be im­ma­te­rial and didn’t make a dent. We asked the work­ers to give back the over­pay­ments, and all but one has done so. That one em­ployee is check­ing out the cal­cu­la­tions with the union.”

As for the prob­lem re­gard­ing va­ca­tion leave, where it was found that six work­ers were en­ti­tled to 203 hours as an­nual va­ca­tion leave, rather than the nor­mal 192 hours, Mr Grixti ex­plained: “It is to do with pub­lic hol­i­days fall­ing dur­ing the week as well as a long-stand­ing cus­tom. Through this cus­tom, care work­ers are on duty alone dur­ing the night at our res­i­den­tial care ser­vices and they do not take a break. In­stead, they work their break, but there is a tra­di­tion, which I found here, that apart from be­ing paid the ex­tra three-quar­ters of an hour, these are added up and added to their va­ca­tion leave en­ti­tle­ment. I find this strange and don’t agree with it. How­ever, the union ac­cepted it as back in the 2003 col­lec­tive agree­ment they said they knew what the law stated and were will­ing to take that. It was not, how­ever, spec­i­fied in the sub­se­quent col­lec­tive agree­ment, and the com­ment made by the au­di­tors was to in­clude it in the next col­lec­tive agree­ment and then ev­ery­thing would be fine.”

There was also an is­sue over the ve­hi­cle log­books not be­ing cor­rectly com­pleted.

“There was that is­sue and, prior to the ar­rival of the au­di­tors, I had asked about it and was told they don’t keep them any longer. I told my se­nior man­age­ment team in Septem­ber 2014 that I wanted them to be­gin keep­ing log­books once again. This was way be­fore the au­di­tors wrote up this report, but at the same time ev­ery ve­hi­cle we have, given that they are gov­ern­ment ve­hi­cles, is logged with the Fi­nance Min­istry fleet man­age­ment sys­tem. We have to fill in a form each time we fill up the ve­hi­cle with fuel, giving the mileage, how much fuel was put in the car, etc. So re­ally and truly, the use of log­books has been su­per­seded, now be­ing con­trolled cen­trally.

“On the other hand, I de­fended my em­ploy­ees. Tak­ing the res­i­den­tial care ser­vices, if some­one is over­dos­ing, would you stop to fill in the log­book or rush the per­son to hospi­tal? What is the pri­or­ity?

“These are things the au­di­tors did not ap­pre­ci­ate, in my opin­ion. I want to see au­dits, but ones that fo­cus more on value for money.

There are 100 em­ploy­ees at Sedqa, mean­ing that there are over 7,000 such forms in a year, given that we are paid ev­ery four weeks. Ev­ery­one was un­der the im­pres­sion that a few went miss­ing. In re­al­ity, they weren’t miss­ing. The NAO au­di­tors spent months at Sedqa, and spent a deal of time go­ing over these sheets in its pay­roll of­fice

Sedqa had a bud­get of €3 mil­lion that year, and at the end of the day the over­pay­ment amounted to €741, so it’s not as if we were mak­ing over­pay­ments amount­ing to €7,000. I was ap­pointed to the post of CEO on 1 April 2014

“When it comes to the an­nual au­dit, their fo­cus is too much on what we call ‘com­pli­ance’. I’m not say­ing they have an agenda, but I did have a dis­agree­ment with them.”

Mr Grixti ex­plained that part of his crit­i­cism of the NAO is that it is ba­si­cally dot­ting the i’s and cross­ing the t’s. “In my opin­ion, it is not serv­ing the coun­try well enough due to its ap­proach. You will be cru­ci­fied if you don’t cross all the t’s. I want them to look at things that are def­i­nitely value for money, such as the use of over­time and whether it is nec­es­sary. For ex­am­ple, do you need more work­ers?

“I am not against the in­sti­tu­tion. I am a pub­lic ser­vant and my in­come comes from pub­lic funds. I man­age a bud­get of over €20 mil­lion and so I need to be ac­count­able for ev­ery last cent.”

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