Travel Audit affair:

Irregularities... but no mention of Dalli

The long-awaited National Audit Office’s report into the procurement of air tickets by government ministries was tabled in Parliament Monday evening, but the inquiry concludes nothing about John Dalli’s alleged irregular engagement of Tourist Resources Limited when he was foreign minister.
Instead, the report puts the entire spectrum of government ministries and offices under the spotlight in their rampant breaches of air tickets procurement regulations.
Asked for his reactions to the audit report yesterday, Dalli said: “The auditor general has looked into all the government air tickets procurement systems, and found nothing against me. On the contrary, it lists other ministries’ irregularities but finds no irregularities in my regard.”
The Office of the Prime Minister limited itself to saying that government will be studying the recommendations put forward in the report.

The report finds widespread breaches to procedures regulating official travel abroad across ministries and departments leading to extra expenses, missed rebates and discounts, and unaccounted expenses.
The report states that the shortcomings could not be attributed to unfamiliarity with or ignorance of government accounting and procurement, but to “non-adherence to existing regulations”.
The report finds that the environment ministry had the highest number of visits abroad made on club class in 2004, totalling 72, followed by the office of the prime minister, the finance ministry and the justice ministry.
Total government expenditure on overseas travel reached Lm1.46 million in 2003 and Lm1.51 million in 2004. As expected, the foreign ministry topped the list of overseas expenses, including airline tickets, subsistence allowance, accommodation and overseas hospitality.
The foreign ministry spent Lm535,284 in 2003 and Lm477,235 in 2004. The environment ministry more than tripled its expenditure in the same period, from Lm53,746 to Lm170,767. The office of the prime minister went up from Lm165,087 in 2003 to Lm177,919 in 2004.
The ministry for urban development and roads tops the list of ministries exceeding the average maximum taxi cost reimbursed – at Lm291.76, followed by the Civil Aviation Department and the finance ministry.
The ministry for justice and home affairs tops the list of outstanding travel funds at Lm7,146, followed by the education ministry at Lm1,226. The justice ministry also topped the list of travel documentation not submitted within three months of the trips, at Lm7,146, followed by the ministry for family and social welfare, and the judiciary.
The House of Representatives, Inland Revenue Department, VAT department, education department, tourism ministry, IT ministry, social policy ministry, social security departments did not send replies to a questionnaire sent by the audit office. The electoral office, Gozo Ministry and foreign affairs replied very late, after the 4 April 2005 deadline for their answers to be analysed.
The audit report recommends that government review existing travel policies and procedures to take into account current economic circumstances and developments in the travel industry.
It also recommends that the responsibility for authorising and monitoring the use of travel should be clearly assigned, guidelines for the payment of contingency allowances be drawn up, limiting the use of business class travel and encouraging the most economical options available.
The report recommends that in the long term, government can implement a capped reimbursement system for travel expenses based on actual costs, while travel arrangements can be contracted out to designated travel service providers. Alternatively, the government can establish a central travel management unit to oversee travel and establish, monitor and enforce travel policies across government departments.
Requested by Prime Minister Lawrence Gonzi on 7 July 2004, four days after Dalli’s resignation as foreign minister, the audit report is signed 23 October 2007 – almost a month before Gonzi rehabilitated his former leadership rival with a token economic advisor’s post.
The report was commissioned in the wake of stories carried on The Times alleging that Dalli’s ministry had purchased Lm40,000 in air tickets from Tourist Resources Ltd – a company connected to his former security officer.
Dalli had said the air tickets purchase was “the excuse used by the prime minister to accept my resignation, short of not being accused of any wrongdoing”.
“I know I have done nothing wrong, and that I did not abuse of public money in the procurement of the air tickets, which is why I suggested Lawrence Gonzi to order an audit into the matter,” Dalli had said about his resignation.
The report, finally released by the prime minister, vindicates Dalli’s stand about the air tickets, but raises the question once again as to what investigation Gonzi was referring to when he told Dalli that he could not have “a minister in Cabinet under investigation” on the day of his resignation. But Gonzi only called Commissioner of Police John Rizzo to Castille to investigate the report on 15 July.
On 11 June 2004, Dutch firm Simed gave Gonzi a private investigator’s report, penned by Joe Zahra and later found to be totally fabricated, that claimed Dalli’s brother Sebastian had collected a kickback for a hospital tender to go the way of Italian company Inso.
When Dalli resigned on 3 July, he was never put under investigation over any of the allegations. Instead he proposed to Gonzi to put his procurement of airline tickets to the Auditor General’s verdict.
This Gonzi did, which led many to believe that Dalli was under some sort of investigation, an impression reinforced by former PN secretary-general Joe Saliba, who in December 2006 told Super One TV that Dalli “will not be found to have done anything inappropriate” once the audit was finalised.
As questions mounted over the reason why Gonzi had accepted Dalli’s resignation short of any wrongdoing being found, Saliba later told PBS in June 2007 that Dalli’s resignation was accepted due to the criminal investigation into the fabricated Joe Zahra report.
Saliba’s declaration led Dalli to comment that the airline tickets audit was “totally irrelevant”.
He said his resignation had been forced by the fact that the prime minister had been given the fabricated private investigator’s report.
A spokesman for Gonzi yesterday said: “The case you are referring to is now closed.”
Dalli however reiterated his belief that Gonzi was sticking to the fabricated Joe Zahra report when he accused him of being “under investigation”.
“I reiterate my conviction that the real issue in the prime minister’s mind was Joe Zahra’s report, and this report underlines my position that has been the same throughout these years. The report confirms this, as I have been found to have acted correctly.”

Tracking government’s overseas travel

77% of reports never written
In 77% of visits reviewed, reports of visits abroad were not drawn up.

61% did not seek quotations
Quotations were not sought from at least three travel agents in 61% of the visits where travel arrangements were not made through the national carrier. Some of the quotations produced were undated.

48% without programmes
In 48% of visits, a copy of the official programme of the event attended was not provided, therefore it could not be ascertained that the duration of the stay abroad was justified and that relative deductions for accommodation, meals and accommodation provided by the host organisation were made.

21% did not use Air Malta
In 21% of visits reviewed, air travel and hotel accommodation arrangements were not made through the national carrier as stipulated by the Management Code.
In such cases, ministries and departments did no always benefit from rebates and other discounts offered by the national carrier on official travel and accommodation abroad.

13% of travel unapproved
In 13% of visits reviewed, it could not be ascertained that the approval of the ministry’s permanent secretary was obtained prior to departure as the relative approvals were undated.

6% lost half-price discount
In 6% of visits reviewed it could not be ascertained that the 50% flight discount on sectors operated by the national carrier was claimed as copies of the relevant rebate form were not retained nor could such rebates be traced through the ministry’s accounts.

9% expenses unjustified
9% of visits, expenses claimed out of contingency allowances included costs that were unjustified or unauthorised, or which were not necessarily incurred. These included taxi expenses, laundry, minibar, communications, telephone, internet and TV, theatre and museum tickets, toiletries and other miscellaneous expenses for which receipted bills were not always produced.

5% longer than necessary
In 5% of the visits where the official programme was available, the duration of the visit abroad was considered longer than necessary.
In such instances, the ministry or department incurred extra expenses in the payment of additional hotel accommodation and subsistence allowance and the added cost of unwarranted absence from work.

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