Not so eco­nom­i­cal: econ­omy min­istry over­spends its clean­ing bud­get by €55,857

Malta Independent - - NEWS - Helena Grech

The Min­istry for the Econ­omy, In­vest­ment and Small Busi­ness (MEIB) ef­fected pay­ments to a ser­vice provider be­yond the pe­riod al­lowed by the Fi­nance Min­istry re­sult­ing in the con­tract price be­ing ex­ceeded by €55,857.

A re­port pro­duced by the Na­tional Au­dit Of­fice on the pub­lic ac­counts for 2015 re­vealed as such, de­scrib­ing the con­tract price as be­ing “sub­stan­tially ex­ceeded.”

The full doc­u­ment com­prises of 21 re­ports on the op­er­a­tions of var­i­ous min­istries, de­part­ments and other govern­ment en­ti­ties, in­clud­ing an anal­y­sis of the Fi­nan­cial Re­port 2015.

The re­port also noted that a “lack of sup­port­ing doc­u­men­ta­tion and ap­provals were also iden­ti­fied while test­ing ex­pen­di­ture in­curred fol­low­ing Malta’s par­tic­i­pa­tion in the Expo Mi­lan 2015. Con­cerns re­lat­ing to travel abroad were also noted.”

In re­la­tion to the clean­ing ser­vices con­tract, it high­lighted that on 14 March 2014 the Fi­nance Min­istry is­sued “its def­i­nite ap­proval for the pro­cure­ment of clean­ing ser­vices at MEIB of­fices on 28 March 2014.

“The ser­vice was to be pro­vided for a pe­riod of four months, at an hourly rate of €6.33 (VAT ex­cluded). The ap­proval was granted on con­di­tion that the to­tal amount of €12,000 (VAT ex­cluded) was not ex­ceeded.”

It noted that fol­low­ing the fi­nance min­istry’s ap­proval, the con­tract signed be­tween the clean­ing ser­vice com­pany and MEIB was dated 27 March 2014 – a full day be­fore it re­ceived the nec­es­sary ap­proval from the Fi­nance Min­istry.

“Al­though MFIN’s def­i­nite ap­proval cov­ered a four-month pe­riod, pay­ments were is­sued to the ser­vice provider for clean­ing car­ried out be­tween April 2014 and March 2015. No doc­u­men­ta­tion was traced in the Min­is­te­rial file re­viewed ev­i­denc­ing that this clean­ing ser­vice was for­mally ex­tended.

“Since its en­gage­ment on 27 March 2014 till 29 April 2015 (i.e. the date on which the last pay­ment was ef­fected by MEIB), the ser­vice provider was paid a to­tal of €70,0172, thus ex­ceed­ing the limit im­posed in MFIN’s def­i­nite ap­proval, as trans­posed in the con­tract, by €55,857.

“In the ab­sence of doc­u­men­ta­tion to prove oth­er­wise, pay­ments ef­fected to this ser­vice provider over the pre­scribed thresh­old were nei­ther cov­ered by Fi­nance au­thor­ity nor by a bind­ing agree­ment be­tween the con­tract­ing par­ties.

“The Per­for­mance Guar­an­tee sub­mit­ted by the ser­vice provider cov­ered only a three-month pe­riod, ef­fec­tive from 7 April 2014. For the re­main­ing nine-month pe­riod to March 2015, no Per­for­mance Guar­an­tee was in place, re­sult­ing in the Min­istry not be­ing legally cov­ered.”

In its rec­om­men­da­tions, the NAO wrote that should the MEIB en­vis­age a sit­u­a­tion where con­di­tions laid out in ap­proval from the fi­nance min­istry no longer ap­plies and changes are needed, it should seek ap­proval im­me­di­ately. It stressed that con­di­tions laid out by the fi­nance min­istry must ad­hered to:

“The Min­istry is to en­sure that all the con­di­tions laid out in fi­nance ap­provals are abided with. Where it is en­vis­aged that the ser­vice will be re­quired for a longer pe­riod than catered for in the orig­i­nal ap­proval granted, guid­ance is to be sought from MFIN ac­cord­ingly. More­over, the agree­ment and Per­for­mance Guar­an­tee are to cover the full pe­riod for which the ser­vice is needed.”

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