Publication of IAID inquiry ‘will ensure full transparency’

The publication of an inquiry by the Internal Audit and Investigation Department will not be in breach of the law, the Office of the Prime Minister said today.

An inquiry into the government’s expropriation of the Old Mint Street was ordered after MaltaToday on Sunday reported that inside information from a highly-placed official inside the Government Property Division would have allowed the exact identification of lands that Marco Gaffarena needed for his own personal and business interests.

The PN had however rubbished the government’s call for an IAID investigation, saying that the OPM had asked the IAID to investigate a department that fell under its responsibility; it also argued that IAID reports are not published.

The government replied that it was “obvious” that the inquiry would be made public.

Reacting to media reports that the law barred the publication of IAID reports, the government explained that the IAID director had to treat internal audit reports and reports for financial investigations as strictly confidential.

However, when the report is passed on to the OPM’s permanent secretary who in turn presents the report to the Prime Minister, it is up to the prime minister to decide whether to publish the report or not.

“The Prime Minister has made it clear that the report will be published to ensure full transparency in the case of Old Mint Street,” it said.

What is the IAID?

The Internal Audit and Investigations Department, set up in 2003, is a centralised department established within the Office of the Prime Minister. It reports directly to the Prime Minister.

The IAID is regulated by Chapter 461 of the Laws of Malta, entitled the Internal Audit and Financial Investigations Act. The law provides for the regulation of the internal audit and financial investigative functions – including the power to carry out effective independent internal audits and financial investigations – and providing for the necessary safeguards to ensure the protection of the government’s financial interests.

The department, referred to as the directorate in the law, has two separate and distinct functions: internal audit and financial investigations.

The directorate is monitored by the internal audit and investigations board, appointed by the Prime Minister and chaired by the Cabinet secretary (in this case principal permanent secretary Mario Cutajar).

All investigations are carried out by the IAID.

IAID members must all take an oath before taking up their duties. The report is passed on to the permanent secretary under whose supervision the auditee [the entity subject of an internal audit] falls. Since the OPM portfolio includes the Lands, the report commissioned by the government into the Gaffarena deal must be passed on to Mario Cutajar. 

According to the law, Cutajar, after receiving the report, will have one month to give instructions to the auditee [in this case the Government Property Division] as may be necessary to remedy any shortcomings. If the IAID firmly establishes the existence of suspected cases of irregularities and, or suspected cases of fraud concerning the responsibilities of the GPD, the IAID – if the irregularity constitutes a criminal offence – must immediately inform the Attorney General.

The law also states that the IAID shall treat internal audit reports as strictly confidential – except for the purposes of any criminal investigation or prosecution – and only disclose their contents to the permanent secretary. In this case, the OPM has declared it will publish the report.