PAC hears NAO official testify on Film Commission investigation

There was no full breakdown of costs for the 2022 Malta Film Week and awards, an official from the National Audit Office told MPs on Tuesday.

The official was giving a presentation of the NAO’s findings to parliament’s Public Accounts Committee, which is probing the audit report on the Film Commission concluded last year.

The NAO report covers the period between 2018 and 2022 and includes a specific focus on the Malta Film Week and lavish Film Awards held at the start of 2022.

The audit had been planned in 2022 by the NAO but the office subsequently received two separate requests – one from Arnold Cassola and one from Opposition members on the PAC – to investigate the Film Commission on various counts.

The NAO official said the audit confirmed the findings of two reports the Film Commission had drawn up to quantify the impact of the cash rebate scheme on the economy. The NAO review confirmed the principal positive economic impacts of the 40% cash rebate scheme, finding no reason to dispute the conclusions of the commission’s own findings.

But the NAO report was less glowing on the 2022 Malta Film Week and awards events, which were characterised by a lack of transparency.

“The lack of documentation and absence of financial statements meant we had difficulty to conclusively determine the completeness of costs incurred,” the NAO official said.

The film week and awards ceremony cost €1.3 million, an expense that does not take into account the value of bartering agreements.

The expenditure was financed through a €400,000 budget allocation, sponsorship from the Malta Tourism Authority to the tune of €500,000, a contribution of €330,000 from Malta Film Studios, an offshoot of the Film Commission, and almost €100,000 in sponsorships from private companies.

Asked about the sponsorship money, the NAO official said there were no contracts or agreements in place the office could review to evaluate the arrangements. “This was a problem we faced... the lack of documentation prevented us from determining the costs of the event,” the official said, adding no breakdown of costs was presented.

The lack of documentation held by the Film Commission, lack of established goals prior to the event and no key performance indicators it was difficult for the NAO to reach any conclusion whether the film week and awards were value for money.

The NAO official replied in the negative when asked by Parliamentary Secretary Andy Ellul, a member of the PAC, whether the NAO engaged any experts in the film industry to quantify the return on investment of such an event that saw popular people giving Malta publicity on social media.

“We did not engage experts but we asked whether this work was done by the Film Commission. The onus was on the commission to quantify the impact of its own event,” the official replied.

The official also noted that the funds contributed by Malta Film Studios were not diverted from other projects. “We found no evidence that the funds from Malta Film Studios were taken away from other projects.”

The official also noted that the commission had taken up its recommendations in subsequent years when it organised the Mediterrane Film Festival.

The PAC will continue discussing the NAO findings on Tuesday 4 February when the NAO is expected to conclude its presentation.

In subsequent sessions, the PAC will call up witnesses to be questioned about various aspects amenating from the report.

The PAC is chaired by Opposition MP Darren Carabott. It is the only parliamentary committee chaired by the Opposition. Its members include Opposition MPs Graham Bencini and Claudette Pace, apart from Carabott, and government MPs Andy Ellul, Glenn Bedingfield, Amanda Spiteri Grech and Alex Muscat.