NAO flags €60 million-plus spend on Church schools

The National Audit Office has flagged what were described as “spiralling” disbursements from public funds to church schools, which have increased by some €30 million over a period of ten years, reaching €63 million by 2016.

Despite not being administered by the government, church schools in Malta are entitled to government funding by virtue of an agreement entered into between the Holy See and the Republic of Malta.

The allocation is intended to cover approved teaching and non-teaching salary costs, as well as a 10% contribution to general expenditure.

In a report outlining the findings from an audit of the Education Ministry’s expenditure on church schools, the NAO said that while expenditure had increased substantially over a period of ten years, the number of students had only increased by some 450 students.

This means that the cost per student had increased from €1,923 to €3,680 since 2007.

“Without going into the merits of the educational aspect, in the absence of adequate controls as highlighted further down in this report, the continuous increase in expenditure involved is of significant concern,” read the report.

As with many other audits carried out by the NAO on government entities, it was noted that there was inadequate documentation supporting budgeting processes, no official records of workings to back up the entitlement to resources, and an absence of a detailed monthly breakdown of the actual staff expenditure financed by the state. Under the agreement between the government and the church, the latter’s schools are meant to submit a full list of their staff complement to the ministry, with an indication of the remuneration of each.

Without going into the merits of the educational aspect... the continuous increase in expenditure involved is of significant concern

“The budget requirement for financial year 2016 was only made available for audit purposes in July 2017, after four weeks from the NAO’s request and following several reminders. This delay raised doubts as to whether such information was available at the ministry,” said the NAO.

Furthermore, it said that a number of figures could not be reconciled due to a lack of documentation.

“[Ministry] representatives confirmed that no reconciliation was ever performed in order to ascertain whether the total funds transferred actually tallied with approved staff expenditure.”

The NAO stressed that given the substantial amount of money being directed towards church schools, there was a great need for sound and internal control, as well as a complete audit trail to be implemented.

On its part, the ministry did not contest any of the NAO’s observations, insisting that it would begin implementing the recommendations by the Auditor General.