The Annual Audit Report, which was submitted to the Hon. Speaker of the House of Representatives in December 2006, covers audits carried out during the second part of 2006, in respect of financial year ending 31 December 2005. It also makes reference to other audits published in the Mid-Year Audit Report that was laid on the Table of the House on 27 July 2006.

The following were the main areas of concern identified in the Annual Audit Report: 

Arrears of Revenue reported by Ministries and Departments to NAO totaled Lm 412.4 million of which an amount of Lm 80.6 million was reported as collectible as at 31 December 2005.  

An audit at the Public Registry in respect of searches revealed that no regular back-ups of the database for searches were submitted to the Public Registry by the responsible company. No arrears of revenue were being reported by the Department even though a considerable amount of charges/fees was still uncollected in respect of searches. 

From a review of the audit reports and the relative management letters submitted by local government auditors for all Local Councils, a number of concerns were reported.  Furthermore a considerable number of Local Councils have also registered various weaknesses with respect to the accounting of the Local Enforcement System (LES).  It was also observed that Joint Committees’ financial statements were not submitted in time to coincide with the audit of the Local Councils. 

At a selected Joint Committee for the year ended 31 March 2005 tribunal pending payments in respect of the pooling period stood at Lm 504,335, reflecting an increase of 40% over last year. Bad debts provision was estimated at Lm 136,515, reflecting an increase of 60% over the previous year.  

The tribunal outstanding payments totaled Lm 596,032 as at February 2006, of which: 

• Lm 111,315 related to 65 motor vehicles. Nineteen of these vehicles had each accumulated pending payments over Lm 2,000 and;
• Lm 155,880 related to 69 owners.  Twenty-two of these had accumulated pending payments over Lm 2,000 each with the top offender exceeding Lm 26,000.

Although the Traffic Regulation Ordinance requires the non-renewal of motor vehicles road licenses with unpaid fines or penalties 1,736 motor vehicles with pending payments as at March 2006 had their license renewed.  

Heads of certain educational establishments in Gozo are not keeping inventories in conformity with regulations.

The Gozo Education Office (GEO) Salaries Section processes the payroll of the teaching and non-teaching staff engaged in Gozo Schools as well as of its employees. However control is weakened because most payments cannot be verified by the Section once source documents are located at the Registry of the Malta Education Division or at the Treasury.  Moreover instructions for salary deductions not timely received are resulting in overpayments which GEO is at times finding difficult to recover.  

The Social Security Department’s SABS computerized system does not incorporate a nominal bank account that can be reconciled to the bank statement.  Furthermore the Department does not keep a list of unpresented cheques for each reconciliation period.  From reasonableness test carried out to verify the correctness of unpresented cheques as at end of 2005, which amounted in total to Lm 1.34 million, it resulted that over 20% of the list consisted of payments issued prior to year 2004. 

An ageing analysis of the total population benefiting from Invalidity Pensions for the year under review shows that 3% are under forty years of age and 16% are under fifty years of age, representing 322 and 1,526 beneficiaries respectively. Medical reassessments are not made in instances where a beneficiary is granted invalidity pension indefinitely.  An updated procedures manual was not available and several informal policies were being adopted by the Department in the calculation of invalidity pension.  

In a special report on the main themes and key issues emerging from the implementation of electronic (e-) government, NAO discusses the need for more attention to be given by senior management in Ministries and public entities to the: 

• leadership and ownership of e-government initiatives and projects;
• development of strategies that encourage the public to interact electronically;
• use of technology-enabled change to transform back-office processes and structures; and
• establishment of management information systems and monitoring processes to periodically review and improve the type and level of services offered online.

The Office carried out a preliminary survey at the Occupational Health and Safety Authority (OHSA), focusing on the Authority’s work relating to the construction industry. Although the Authority has strived to raise occupational health and safety awareness and enforcement of relevant regulations within all economic sectors, including the construction industry, the lack of human resources available renders the Authority a reactive rather than a pro-active institution in all aspects of its activities.