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News maltatoday, WEDNESDAY, 11 DECEMBER 2013 Government-guaranteed debt climbs to €1.2 billion in 2012 MATTHEW VELLA Auditor General Anthony Mifsud presents his report to Anglu Farrugia LETTERS of Comfort and bank guarantees by the Maltese government have reached €1,242 million, against €1,142 million in 2011 – liabilities that are being borne by taxpayers for government debt on public corporations. The guarantees cover debt such as that incurred by public entities like Enemalta, and is not visible in the government's official general debt. The Auditor General yesterday presented the Annual Audit Report on the Public Accounts for 2012, in which he found substantial excess of actual over budgeted figures of various items of expenditure was once again reported. By mid-October 2013, when the respective write-up was concluded, the audited financial statements of two local councils and one regional committee were still not forwarded to NAO. Audit reports and management letters prepared by local government auditors revealed that a number of weaknesses and concerns reported in previous years still prevail. For the third consecutive year, no audit opinion was expressed on the financial statements of Mosta Local Council, due to the various material shortcomings encountered. The audit reports of another 57 Local Councils and four Regional Committees were qualified with an 'except for' audit opinion. 25 local councils and a regional committee recorded a negative working capital in the statement of financial position. 31 councils registered a financial situation indicator below the established benchmark of 10%. And 32 councils and a regional committee registered a deficit. In other findings, internal controls in various areas at the Malta Tourism Authority (MTA) were weak or entirely lacking. "Officers working at the Head Office were not always recording their attendance through the recognition device in place, thus attendance records and overtime claims could not be verified. On the other hand, manual records maintained at certain Tourist Information Offices were incomplete and unreliable. Weak budgetary control on overtime, as well as variances in the basic pay, was also encountered," the NAO said. The procurement of services by MTA, the Housing Authority, the Malta Enterprise and the Land Transport Directorate within Transport Malta, were also found not always in line with standing regulations. "Procurement was made directly from the open market without a public call for quotations or tenders, and on occasions, without finance ministry approval." Completeness of revenue generated by the Medicines Authority could not be ascertained due to the absence of an integrated IT system And an audit of the expenditure incurred by the Ministry for Resources and Rural Affairs, for Upgrading works at Main Touristic Areas, revealed that the majority of capital projects experienced unplanned changes, as well as additional work after the issue and adjudication of the tenders, thus defining the planning as inadequate. "This caused substantial cost variations to the budgeted tendered amounts, which could also trigger lack of transparency and unfair competition for the amounts in question." Once again, the education ministry was found not to have a reliable system in place to reconcile the actual refunds of overpaid Students' Maintenance Grants, against that actually deposited at the Central Bank of Malta. "The inadequacy of the overall internal controls and lack of audit trail were a major concern. The main shortcomings included refunds not deposited at Bank, missing receipt books and official receipts not issued." Figures provided by the Government Property Department, covering accrued rent on Government property, were distorted and at times could not be corroborated. Other weaknesses related to rent collectable from commercial tenements were encountered. These included expired lease contracts that were not renewed and reminders for overdue rent that were overlooked. A copy of the Report will be available on the NAO website as soon as it is presented in the House of Representatives.

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