Issue link: https://maltatoday.uberflip.com/i/768342
maltatoday, SATURDAY, 31 DECEMBER 2016 2 News Government spends €250 million in excess of budget PAUL COCKS IF you thought the finance minis- ter's budget speech was where the buck stops when it comes to min- istries and departments trying to finagle as much money as possible out of public finances, think again. For 2016, the year that is about to end, the budget was drawn up in 2015 and the full speech delivered in parliament in October last year. But all ministries can request sup- plementary funds during the year and, in fact, two weeks ago on 7 December, finance minister Ed- ward Scicluna tabled in parliament a 49-page document listing all supple- mentary estimates for 2016. The supplementary estimates were, of course, approved by the gov- ernment while the opposition voted against them. What is amazing is that more than €250 million of supplementary funds were approved to cover excess recur- rent and capital expenditure. Some individual supplementary fund allocations stand out. The Office of the Prime Minis- ter had originally been allocated €640,000 for travel expenses but then requested a further €1.6 million dur- ing the year, bringing the total travel expenses of the OPM to a staggering €2.24 million. Other noteworthy supplementary fund allocations within the OPM were for information services and the CHOGM (Commonwealth Heads of Government Meeting) held in Malta in 2015. The OPM in fact requested an ad- ditional €480,000 for information services – including online and so- cial media advertising – in addition to the €520,000 originally allocated. And although €3 million had been budgeted to cover payments falling due in 2016, a further €3.2 million were approved under supplementary expenditure. Budget? Who cares? The 2016 budget had allocated €3.3 million to the Ministry of Education and Employment for personal emol- uments (salaries and wages) but the ministry required an additional €1.5 million by the end of the year. The document tabled by Scicluna ex- plained the supplementary funding as "necessary in order to cover esti- mated emoluments due for the year in terms of recurrent requirements". The Employment and Training Corporation (ETC), now JobsPlus, which falls under the same ministry, requested an additional €7.5 million in addition to the €11 million origi- nally allocated. According to the fi- nance ministry, the additional funds were requested "to cater for the en- tities' requirements, in response to demands arising". The Foundation for Educational Services, which had €520,000 al- located in the budget, received €964,985 in supplementary funds. The finance minister's document put this increase down to "require- ments arising as a result of the en- tity's activities and programmes". The Ministry for Social Dialogue's budget for salaries had been set at €1,595,000 but was supplemented by a further €600,000 during the year, taking the total expenditure to €2.2 million. The ministry's actual budget for in- ternational memberships rose from a mere €11,000 to over €180,000, while its budget for travel – set at €75,000 – was supplemented by a further €100,000. Scicluna's report justified these increases as "required to cover the Ministry's commitments and other operational requirements". The Ministry for Economy also re- ceived €12.6 million in supplemen- tary funds in 2016. These included, among others, an additional €210,000 to supplement the €45,000 originally budgeted for information services. Contractual services under the ministry had been allocated €107,000 but these rose to €2,385,000, which "became necessary to enable settle- ment of compensation due to monti hawkers". The ministry also requested that its €14,000 budget for professional ser- vices be increased to €270,000. A whopping €8.6 million in sup- plementary funds were also used by the ministry to meet the cost of investment incentive programmes managed by Malta Enterprise, for which €12 million had already been originally budgeted. The Ministry for Health and Safety saw its budget for professional ser- vices – set at €60,000 – increase by €825,000. A €1.1 million allocation for Pro- jects Malta in a vote under the min- istry, was supplemented by a further €2,075,000, having "undertaken approved initiatives which necessi- tated the provision of supplementary funding during the year". €6 million in supplementary funds were allocated to the Ministry for the Family and Social Solidarity to aug- ment its €13 million budget for con- tractual services. The report tabled in parliament said the increase was provided "mainly to cover services rendered in this sector, including changes in contractual fees of cleaners, carers and domiciliary services". The Ministry for Tourism saw its €9,000 budget for professional ser- vice sky-rocket to a staggering €1 million while its budget for salaries – set at €2.5 million – needed to be supplemented by a further €500,000. And €40.5 million budgeted for the Malta Tourism Authority turned out to be nowhere near enough, as an additional €15.8 million were ap- proved. €1.8 million were spent on over- time by the Correctional Services, where only €1 million had been budgeted. The Office of the President too went over budget in a number of items, including travel, for which the €165,000 that were budgeted were supplemented by a further €330,000. MaltaToday asked the ministries and the Office of the President to provide further details as to why the supplementary funds were request- ed, what they were spent on and why the original amounts budgeted were – in many instances – so far off the mark. By the time we went to print, only Minister Dalli and the Office of the President had answered our emails. The ministry for civil liberties and social dialogue said the original amount of salaries provided in the original estimates was not enough to meet the salaries of existing staff and hence had to be increased to meet the existing wages. As regards the international mem- bership, this was increased due to the fact that the Ministry had to pay the membership to the Open Govern- ment Partnership entered into by the previous administration. This membership, which was never paid before, amounted by itself to ap- proximately €187,000. "Regarding travel, the additional expenditure was due to the increased number of international meetings mostly related to the preparatory meetings for the Presidency. Hence, all the additional expenditures can be accounted for. With respect to the salaries, the Ministry's estimates were correct but the funds allocated were below that required. The addi- tional expenditures related to Inter- national memberships and certain travel commitments only became evident during the year and thus required the additional expenditure requested." The Office of the President ex- plained that during the year under review, the Office received approxi- mately 53 invitations to travel on of- ficial duties, out of which ONLY 19 were accepted. Three of these were outgoing State Visits, three were outgoing official visits, whilst 13 were working visits. The above also required an additional six advance visits. "All the visits that the Office of the President decided to partake in, were the ones that the office deemed es- sential in building further Malta's reputation in the international fora including United Nations, UNESCO, Council of Europe, the European Commission, The International Or- ganisation for Migration, Women in Parliament Global Forum, the Coun- cil of World Women Leaders, and UN Women, etc," a spokesman said. The Office of the President said it endeavours to keep expenses to a minimum, in fact, in all instances, officials that according to Govern- ment protocol are entitled to travel in business class, actually travel in economy. There were also instances were the President herself travelled on low-cost airlines. "Another case in point to contain costs, is the recent working visit to Australia. This was in fact scheduled for 2017, however it was brought forward to 2016, since The Presi- dent was officially invited by Flinders University and the South Australian Health, Medical and Research In- stitute to deliver keynote speeches, thus absorbing part of the cost." The spokesman said that the hos- pitality vote covered all expenses incurred for incoming State and Of- ficial visits of Heads of State. "The Office of the President, has no visibility of what and when state visits will be taking place, as these are handled by the Office of the Prime Minister and the Ministry of Foreign Affairs," he said. "Therefore, the Of- fice of the President can never accu- rately anticipate the annual budget requirement for such hospitality." He explained that the vote also covers all hospitality provided in re- lation to the Presentation of Creden- tials and Farewell Calls of Foreign Ambassadors accredited to Malta. In 2016, there were 26 newly Accred- ited Ambassadors to Malta. This also includes Official Delegations that are sent by Government to call on the President, Foreign Ministerial Visits, and other official foreign delegations and foreign dignitaries that visit the Office of the President, including delegations related to Malta's EU Presidency. "The opportunity arose for this office to take advantage of the cars that were available during CHOGM, namely, two security vehicles and the President's official vehicle, all of which had been in service since the Presidency of Professor De Marco." These had to be replaced, due to the high maintenance and running costs. During the last year of op- eration, maintenance costs on the President's previous official vehicle totalled to nearly €11,000. Further- more, fuel consumption has been reduced by 50%. The spokesman confirmed that the Office of the President was more than willing to make available all rel- evant documentation pertaining to the above-mentioned expenses for viewing by Media Today. Opposition demands explanation In an adjournment speech in par- liament on 19 December, opposition spokesman Chris Said demanded that the government provide a de- tailed accounting of how the supple- mentary funds were spent. He said the government tried to hide these additional funds and was avoiding explaining what the sup- plementary funds had been used for. Said insisted the Auditor General look into the matter, especially those cases where the money was not spent on tangible long-term projects but allocated to professional and contractual services, which could be used to divert money to someone's pocket. "This year's excess expenditure is unprecedented. Amounts add up to millions of euros which were spent and not budgeted," he told Malta- Today. "And this excess expenditure is not in capital expenditure (invest- ment in the future of our country) but in votes like travel, adverts (prop- aganda), professional services etc." Said said that one could under- stand how every year, there could be some overruns, but insisted that this year's unprecedented amounts clearly deserved an explanation. "Unfortunately, whilst Prime Min- ister Muscat speaks about transpar - ency, every time he is faced with questions on his actions, instead of giving explanations, he resorts to personal attacks," he said. "And whilst I am aware that the National Audit Office has much on its plate, I still believe that such ex- cess expenditure should be investi- gated." Said insisted taxpayers deserved an explanation and justifications for each and every euro of their money spent. Purpose of Expense Approved Budget Supplementary Funds Allocated Total Funds Allocated Actual Spending % compared to original budget Travel € 640,000 € 1,600,000 € 2,240,000 350% Information Services € 520,000 € 480,000 € 1,000,000 192% CHOGM 2015 € 3,000,000 € 3,200,000 € 6,200,000 207% Wages & Salaries € 3,300,000 € 1,500,000 € 4,800,000 145% ETC (JobsPlus) € 11,000,000 € 7,500,000 € 18,500,000 168% Foundation for Education Services € 520,000 € 964,985 € 1,484,985 286% Salaries € 1,595,000 € 600,000 € 2,195,000 138% International Memberships € 11,000 € 191,000 € 202,000 1836% Travel € 75,000 € 100,000 € 175,000 233% Information Services € 45,000 € 210,000 € 255,000 567% Contractual Services € 107,000 € 2,385,000 € 2,492,000 2329% Professional Services € 14,000 € 270,000 € 284,000 2029% Investment Incentives € 12,000,000 € 8,600,000 € 20,600,000 172% Professional Services € 60,000 € 825,000 € 885,000 1475% Projects Malta € 1,100,000 € 2,075,000 € 3,175,000 289% Ministry for the Family Contractual Services € 13,000,000 € 6,000,000 € 19,000,000 146% Professional Services € 9,000 € 1,000,000 € 1,009,000 11211% Salaries € 2,500,000 € 500,000 € 3,000,000 120% Malta Tourism Authority € 40,500,000 € 15,800,000 € 56,300,000 139% Travel € 165,000 € 330,000 € 495,000 300% Utilities € 210,000 € 125,000 € 335,000 160% Materials and Supplies € 85,000 € 100,000 € 185,000 218% Hospitality € 100,000 € 150,000 € 250,000 250% Equipment € 15,000 € 170,000 € 185,000 1233% Office of the Prime Minister Office of the President Ministry for Tourism Ministry for Health & Energy Ministry for Economy Ministry for Social Dialogue Ministry for Education & Employment