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Matthew Vella
The evidence in the magisterial inquest conducted into the mismanagement at the heart of the contentious Foundation for Tomorrow’s Schools has revealed how Education Minister Louis Galea himself had negotiated the fee payable to engineer Emanuel Farrugia for his role as a consultant to the foundation.
According to the minutes of a FTS board meeting held on 10 September 2003, right at the heart of the budding controversy that was to see FTS become the scope of investigation for Magistrate Consuelo Scerri Herrera, Louis Galea is reported to have informed the board that Farrugia had been in Malta since August and was presented with a draft contract for employment. Farrugia is a French resident. Galea is reported to have said that Farrugia had agreed to a fee of either Lm20 an hour, non-taxable, or a taxable Lm30 an hour.
Farrugia’s lucrative deal would be accepted by the FTS board, now having already terminated CEO Alfred Ferrante’s contract following revelations of mismanagement and breach of financial regulations in the issuing of direct orders. The board accepted that Farrugia would be paid Lm30 an hour inclusive of tax, on the basis that the engineer would dedicate up to eight hours a day for a minimum of two weeks a month for FTS-related assignments.
Additionally, Farrugia was given an expense account capped at Lm2,000, a car and all its running expenses, a Lm1,000 allowance for business entertainment, and a monthly air-ticket from France.
Farrugia was in fact employed at a time when MaltaToday had already been probing the alleged irregularities surrounding over Lm400,000 in direct orders issued to the private sector by the FTS, the Ministry of Education’s arm responsible for the upkeep and construction of schools.
CEO Alfred Ferrante, whose three-year contract was terminated following accusations of mismanagement by the FTS board, would later detail the manner in which several favoured architects, engineers and other contractors were awarded direct orders, in evidence given throughout the magisterial inquiry.
Minister Louis Galea had already attended several FTS board meetings, one of which on 16 July 2003 was to communicate that he had received messages indicating some problematic issues in the way the operations of the foundation are being conducted, specifically referring to the Auditor General and the Minister of Finance.
He complained that there was no strategic master plan and several management problems. The board had then agreed that a capital projects director would be engaged, a new role which would be higher than that of the CEO himself, and eventually redefine the role of Ferrante within the foundation.
Tension at FTS
FTS chairman Conrad Thake, whom Ferrante said had pointed out several favoured recipients for work carried out on school construction projects, told Scerri Herrera in his deposition that Ferrante “used to feel there used to be too much bureaucracy” at the foundation.
“My instructions were to follow the strict regulations… if nobody would grab my attention for something that is not according to procedure, I wouldn’t have known so I would approve payment,” Thake said about the payments for direct orders. “I don’t know of any payments made without the approval of the Finance Ministry.”
He also detailed episodes of great tension between Ferrante and the foundation’s financial controller, Chris Pullicino:
“There could have been tension between the CEO and the financial controller. Why? Because maybe the CEO used to feel there used to be too much bureaucracy. One has to understand that certain work must be carried out with a certain rhythm, and the CEO must deliver. The financial controller’s work is to see that procedures are being followed and everything is in line. Obviously there’s a liaison between them… Just a few weeks before Ferrante’s contract was terminated, he almost asked me to reprimand Pullicino.”
Thake denied ever having received phone calls from Minister Louis Galea to issue payments to certain contractors, as alleged by Ferrante, who also said that Galea would go onsite at the schools to give instructions to contractors with whom he enjoyed a certain familiarity. Ferrante also said payment was issued for work which he had not approved because the orders to start work would have arrived from elsewhere. Thake said Minister Galea had never directed him to issue direct orders for work to be done. “In my presence… to my knowledge, no.”
Conrad Thake said the work at FTS used to be apportioned fairly and reasonable. “There was no architect who would take an exaggerated amount of work… for example, as a principle, certain architects would have two orders only. If one finishes on time and others fail, we would give more work to the former… sometimes we would receive advice on who to choose, as in the case of drainage problems, we would engage architect Philip Grech, who is the former head of the drainage department, and is a drainage specialist.”
Irregular direct orders
According to board member Dr Peter Fenech, who appears throughout the entire inquest as having been instrumental in exploring the allegations of mismanagement at the heart of the foundation, FTS had inherited several contracts from within the Education Division’s workings which had to be re-negotiated or terminated. According to Fenech, the irregular direct orders in 2002 totalled Lm250,000 out of a total of Lm270,000 which, he said, had never been justified by Ferrante.
He detailed cases of urgent direct orders issued under the denomination of ‘special cases’, in which he admits that financial procedures were never followed.
“There was a directive by the Minister… he had received complaints, in writing, also from parents, and he gave the order, ‘look, this case has to be taken up and closed’, and obviously we had to conclude the work. He wanted the work done at the earliest and immediately. It could be that we engaged two architects, for which we issued ‘special case direct orders’, because the Minister had given us clear orders that he did not want to finish his term and leave this particular school project pending. He wanted the problem to be solved.
“In this case, the Minister demanded that FTS solves the problem at the earliest… the only way was by direct orders, which were not issued according to financial regulations.”
According to Fenech, the Sandhurst school project entrusted to Architectural Project had been pending since 1996, the firm having been paid a monthly retainer of Lm3,852. “FTS had inherited such contracts… the Education Division never followed the financial regulations, and certain ongoing projects inherited from the division had not observed the 2002 regulations,” Fenech told Scerri Herrera.
The board had in fact decided to terminate the contract after the project had not yet been completed, “so work stopped, and we needed an architect, who was nominated according to the financial regulations.”
“It is true that there was a breach of the financial regulations, but at least it was one which meant that wings one and two of the school were concluded in twelve months, with wing three completed for Lm13,000.”
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