ACT No. XVI of 1997 AN ACT setting out the duties of the Auditor General and the manner whereby reports by the Auditor General are to be made to Parliament, and to provide for the manner in which funds shall be allocated to the National Audit Office and the manner whereby

I assent.

(L.8.)

Ugo MIFSUD BONNICI

President

18th July, 1997

ACT No. XVI of 1997

AN ACT setting out the duties of the Auditor General and the manner

whereby reports by the Auditor General are to be made to

Parliament, and to provide for the manner in which funds shall be

allocated to the National Audit Office and the manner whereby

accounts of the NationalAudit Office are to be audited and reponed

upon, as well as other matters ancillary and consequential thereto.

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows:-

This Act may be cited as the Auditor General and National

Audit Office Act, 1997, and shall come into force on such date as the

Prime Minister may by notice in the Gazette establish and different

dates may be so established for different provisions and different

purposes thereof.

(Section 5)

Reports of the Auditor General

1. (a) The Auditor General shall make such examination and

inquiries in the accounts of all departments or offices of the

Government of Malta, or of such other bodies on whose accounts

he is to report in accordance with any law, as he may consider

necessary in order to enable him to report thereon as required by

the Constitution or any other law.

(b) The Auditor General shall at least once in every year

inspect all securities held in Malta and shall verify the annual return

of all securities held in Malta and abroad prepared by the

Accountant General under the provisions of the Financial

Administration and Audit Act.

(c) The Auditor General shall examine with the Treasury

books the statements which the Accountant General is required to

prepare and forward to him under the Financial Administration

and Audit Act; he shall certify and return them to the Accountant

General within two weeks after the receipt thereof.

(d) If the Auditor General objects to any part of such

statements, he shall certify the same With such remarks thereon as

he thinks fit, and they shall be published and laid on the Table of

the House of Representatives together with such remarks.

(e) The Auditor General shall examine the statements and

accounts prepared and sent to him by the Accountant General in

terms of the Financial Administration and Audit Act and shall

make a report as is provided under and is required by this Act, by

the Financial Administration and Audit Act and any regulations

made thereunder, or as the Auditor General may think fit and

desirable.

2. The Auditor General shall examine, in particular, such books

and records as government depru tments are required to keep by or under

the Financial Administration and Audit Act or any other law which

may from time to time runend, supplement or replace that Act, and

shall in his report state his opinion as to whether such books and records

fairly contain such information as is required in accordance with stated

accounting policies of the Government of Malta.

3. The Auditor General may examine whether the department,

office or other body whose accounts are being audited by him has used

the funds and resources available to it effectively, efficiently, and

economically without incurring expenditure which is unnecessary.

4. Nothing in paragraph 3 hereof shall be construed as entitling

the Auditor General to go into the merits of any policy or objective of

any such department, office or body.

5. The Auditor General shall annually report to the House of

Representatives on:-

(i)

the work and activities of the National Audit Office; and

(ii) whether in carrying out his work he received all the

information and explanations he required.

6. Each report under paragraph 5 shall call attention to anything

that the Auditor General considers to be of significance and of a nature

that should be brought to the attention of the House of Representatives,

including in particular any cases in which he may have observed that:-

(i) accounts and records have not been faithfully and

properly maintained or public monies have not been fully accounted

for or paid into the Consolidated Fund as may be required by law;

(ii) essential records have not been maintained or the rules

and procedures applied have been insufficient to safeguard and

control public property, to secure an effective check on the

assessment, collection and proper allocation of revenue and to

ensure that expenditures have been made only as authorised;

(iii) public monies have been expended for purposes other

than those for which they were appropriated by Parliament or

otherwise not in accordance with the Financial Administration and

Audit Act or such otherlaw amending, supplementing or replacing

that Act;

(iv) public monies have been expended uneconomically or

without due regard to effectiveness and efficiency;

(v) satisfactory procedures have not been established to

measure and report the effectiveness of expenditure programmes,

where such procedures should reasonably have been established.

7. Each report made by the Auditor General under paragraph 5

of this Schedule shall be submitted to the Speaker of the House of

Representatives not later than twelve months after the end of the fmancial

year being reported upon, and the Speaker shall lay each such report

before the House of Representatives on the next sitting of the House

after receipt thereof by him.

8. (a) The Auditor General may make special reports to the

House of Representatives: -

(i)

on any matter of pressing importance or urgency;

or

(ii) dealing with value for money audit relating to

efficiency and effectiveness of any department, office or body.

The Speaker shall lay each such report before the House

(b)

of Representatives on the next sitting of the House after receipt

thereof by him.

9. (a) The Auditor General may either personally or through

the National Audit Office, on the initiative of the Auditor General

himself or at the request of the Minister responsible for finance or

of at least three members of the Public Accounts Committee or

such other Committee of the House of Representatives that may

from time to time replace such committee, inquire into and report

on

(i) any matter relating to government finances

an;

property or funds administered or under the control of

Government department or office or of any body whose

accounts are subject to his audit;

(ii) such accounts and financial reports which are in

virtue of or under any law laid before the House of

Representatives.

(iii) the accounts of those public authorities or bOdies

administering, holding or using funds belonging directly or

indirectly to the Government of Malta;

(iv) the operations of companies or other entities in

which the Government of Malta owns not less than 51 per

cent of the shares;

(v) any other matter as may be provided by or under

any law.

(b) The Speaker shall lay each such report before the House

of Representatives on the next sitting of the House after receipt

thereof by him.

(c) The Auditor General may give advice to any

Government department or office, or to any body to which

subparagraph (a) hereof applies, on anything discovered during

such inquiry.

10. (a) Any serious irregularity discovered by the Auditor

General in a government department or office, or-in a body subject

to his audit, shall be brought to the notice of the Minister

responsible for that government department, office or body by the

Auditor General.

(b) (i) The Auditor General may report to the Speaker any

person who performs duties in such government department

or office, or body subject to his audit, and who fails to comply

with any of the provisions of this Act or of the Financial

Administration and Audit Act, or of any regulations made

thereunder.

(ii) The Auditor General shall report any such person

to the Minister responsible for that Government department,

office or body and may recommend that the Minister

surcharges against that person the amount of deficiency or

loss or improper payment resulting from the non-compliance

of any provisions of this Act, or of the Financial

Administration and Audit Act, or of any regulations made

thereunder.

(iii) Any person aggrieved by the imposition of any

such surcharge shall have a right to contest such surcharge

by action taken against the Minister in the First Hall of the

Civil Court not later than one month after notice has been

given to him of such surcharge, and such surcharge shall not

become effective before the lapse of one month or during

such time as any such court action is still pending.

(iv) The Auditor General shall report any such person

who fraudulently applies or fraudulently causes or permits to

be applied public monies to other than public services, or

who is a defaulter in respect of public monies, to the Minister,

who shall take such steps as he may consider necessary to

have the offender prosecuted according to law; but nothing

herein contained shall prevent the taking of proceedings

against such person by any person other than the Minister.

(c) The Auditor General shall make queries and observations

addressed to any accounting officer or officer in any way concerned

with the receipt or payment of public monies and call for

explanations as he may think necessary. Every such query and

observation addressed to any such officers shall be returned by

them to the Auditor General with the necessary reply without delay.

In the event of any unusual or unexplained delay occurring in

obtaining reply, or an unsatisfactory reply being received, to

inquires or representations made by him, the Auditor General shall

report the curcumstances to the Minister responsible for the

government department or office, or body subject to his audit,

concerned.

In this Act unless the context otherwise requires

"Auditor General" and "Deputy Auditor General" mean

the Auditor General and the Deputy Auditor General appointed in

terms of section 108 of the Constitution;

"Constitution" means the Constitution of Malta;

"National Audit Office" means the National Audit Office

set up by section 108 of the Constitution.

(Section 6)

National Audit Office

PART I

Officers of the National Audit Office

I. The Auditor General shall appoint such number and such

classes of officers at the National Audit Office as he may consider

necessary to assist him in the discharge of his functions according to

law.

2. Such officers shall be appointed on such terms and shall enjoy

such remuneration as the Auditor General may determine.

PART II

Powers of Auditor General and of National Audit Office

3. Except as may be expressly provided by any law, the AUditor

General, and all authorised officers of the National Audit Office, shall

be entitled to free access at all reasonable times to such infonnation

from officers and other personnel of government depar tments or offices,

or of bodies subject to his audit, that may be required by them for the

proper execution of their functions according to law, and they shall be

entitled to receive from such officers and other personnel such reports

and explanations as they may deem necessary for such purposes.

4. The Auditor General may also cause searches to be made in,

and extracts to be taken from any books, documents or records existing

in any premises of government departments or offices, or of bodies

subject to his audit, without paying any fee therefor notwithstanding

any law or regulations to the contrary.

5. In order to carry out his duties more effectively, the Auditor

General may station a member of his staff in the offices of any

Government department or office, or of any other body subject to his

audit, and such department, office or body shall furnish such member

with the necessary office accommodation.

6. The Auditor General shall require every officer employed by

him who is to examine the accounts of any department, office or body

to comply with any security requirements applicable thereto and to take

any oath of secrecy that may be required by law to be taken by any

person employed with that department, office or body.

7. (a) In carrying out his functions and responsibilities

according to law, the Auditor General may rely on the report of

the duly appointed auditor of the organisation being reported upon,

and may also commission any person or group of persons who

may in accordance with any law hold a warrant entitling them to

audit the accounts of public limited liability companies, to audit

the accounts of any department, office or body subject to his audit.

(b) The provisions of paragraphs 3,4 and 6 of this Schedule

shall apply in respect of the person or group of persons

commissioned by the Auditor General.

PART ill

Finance

8. The expenses of the National Audit Office and the salaries

and allowances of the officers thereof (other than those of the Auditor

General and of the Deputy Auditor General) up to a sum as may be

fixed by the House of Representatives in accordance with this Part,

shall be a charge on the Consolidated Fund without the need of any

further appropriation other than this Part of this Schedule.

9. For the purposes of establishing the sum referred to in

paragraph 8, the Auditor General shall prepare an estimate of the sum

that he considers to be required.

10. Such estimate shall before consideration by the House of

Representatives be examined by the Committee established under Part

IV of this Schedule.

II. Where during the course of any financial year the sum fixed

by the House of Representatives is in the opinion of the Auditor General

insufficient to enable him to efficiently fulfil the responsibilities of his

office, the Auditor General shall prepare supplementary estimates for

consideration by the House of Representatives after examination by

the Committee as aforesaid in paragraph 10.

The Auditor General and the Deputy Auditor General shall

take an oath of Office in the terms following

"1 ........................... swear that I shall honestly and diligently

perform the functions. of .Auditor GeneraI/Deputy Auditor General,

according to the ConstItutIon of Malta and to any law that may from

time to time be applicable, without fear or favour and to the best of my

ability." .

The Auditor General may in connection with his functions Power of the

under the Constitution or any other law, examine any person on oath on to

any matter pertaining to any account subject to his audit and shall have Oaths etc.

all the powers that are by virtue of the Inquiries Act conferred on a Cap. 273.

chairman of a board of enquiry under that· Act, and the provisions of

that Act shall apply to the Auditor General in the exercise of his functions

aforesaid as if he were a chairman appointed under that Act.

S. The provisions of the First Schedule to this Act shall apply.to

the reports that the Auditor General is to make to Parliament in

accordance with section 108 of the Constitution.

The provisions of the Second Schedule to this Act shall apply Allocation of

to the recruitment of staff at the National Audit Office, to the powers of National Audit

the Auditor General and of his office, the allocation of funds to the Office.

National Audit Office, the keeping of accounts thereat and for their

proper audit.

The Financial Adrninistration and Audit Act shall be amended

as follows

(a) sections 5 to 11 (inclusive), 49 to 61 (inclusive), 66, 69,

and 70 shall be deleted;

(b) in section 45 the words "all securities held in Malta shall

be inspected by the Director of Audit and," shall be deleted, and

for the marginal title thereto there shall be substituted the words

"Certified returns of securities held abroad;";

(c) in section 46 for the words from "for verification" to

"of this Act." there shall be substituted the words "to the Auditor

General as provided in section 67 of this Act.";

(d) in sections 46, 48, 65, and 67, for the words "Director

of Audit" wherever they appear there shall be substituted the words

"Auditor General", and for the words "Audit Office" there shall

be substituted the words "National Audit Office"; and

(e) in subsection (2) of section 65, for the words "Such

statements shall be examined with the Treasury books, certified

by the Director of Audit and returned to the Accountant General

within two weeks after the receipt thereof, and the Minister shall

forthwith cause the same, certified as aforesaid, to be published"

there shall be substituted the words" As soon as the Auditor General

returns such statements to the Accountant General, the Minister

shall cause such statements to be published" .

8.. Any reference in any law to the Director of Audit and to the

Audit Office shall be deemed to be a reference to the Auditor General

and to the National Audit Office respectively.

The Pensions Ordinance shall be amended as follows

(a) immediately after paragraph (b) of the definition

"pensionable office" in section 2 thereof, there shall be added the

following paragraph

"(c) the office of Auditor General or Deputy Auditor

General, or any office in the National Audit Office;";

(b)

section 9 thereof shall be amended as follows

(i) the present provision shall be renumbered as

subsection (1) thereof;

(ii) in paragraph (i) of the proviso to subsection (1)

thereof as renumbered, for the word "judge" there shall be

substituted the words "judge, Attorney General or magistrate';

and

(iii) immediately after subsection (I) thereof as

renumbered there shall be added the following subsection

"(2) The provisions of subsection (1) of this

section shall not apply to any officer holding the office

of Auditor General or Deputy Auditor Genera!."; and

(c) immediately after paragraph (5) of regulation 3 of the

Pensions Regulations there shall be added the following new

paragraph (6)

"(6) The Auditor General and/or, the Deputy Auditor

General who, immediately preceding their appointment as

such, were eligible for pension under this Ordinance, if they

are compelled to terminate their term of office on account of

infirmity of mind or body and thereupon effectively retire

from the public service, or have attained the age of sixty on

or after the expiry of that term without it having been

immediately renewed or extended, may be allowed to claim

a pension at the rate of three-hundred and sixtieths of their

pensionable emoluments as Auditor General and/or Deputy

Auditor General for each complete month of pensionable

service in any capacity in the service of Malta."

In Part A of the First Schedule of the Ombudsman Act, 1995,

for the words ''The Director of Audit in respect of the functions under

subsections (4) and (5) of section 108 of the Constitution" there shall

be substituted the words ''The Auditor General in respect of the functions

under subsections (5) and (8) of section 108 of the Constitution".

The sum or sums referred to in the previous paragraphs of

this Part shall be fixed by resolution of the House of Representatives

after considering the estimates prepared by the Auditor General and

the report thereon by the Committee.

Part IV

National Audit Office Accounts Committee

There shall be a Committee to be styled the National Audit

Office Accounts Committee (hereinafter referred to as "the Committee")

Which shall be composed as follows

(i) the member of the House of Representatives who is for

the time being Chairman of the Public Accounts Committee of the

House of Representatives or such other committee of the said House

from time to time replacing such Committee;

(ii) the Minister responsible for parliamentary affairs

(hereinafter referred to as "the Leader of the House of

Representatives");

(iii) three members of the House of Representatives

appointed by the said House upon a motion by the Leader of the

House of Representatives, as to two members from among members

supporting the Govemment and as to the remaining member from

among the members in opposition.

The Committee shall from time to time but not less often

than once a year present to the House of Representatives (through the

Leader of the House of Representatives) a report of its activities and

the report of its examination of any estimates prepared by the Auditor

General.

The Committee shall elect a chairman from among its

members, and may regulate its own proceedings.

Upon the dissolution of the House of Representatives the

Committee shall be deemed to be dissolved until it is next reconstituted

after the House next meets. Where upon the dissolution of the House of

Representatives the sum to be established for the purposes of paragraph

8 of Part III is not so established or the House has not after the end of a

financial year established the said sum, the Auditor General shall be

entitled to expend, each month, a sum equivalent to one twelfth of the

sum or sums established for the previous financial year, until the said

sum is so established.

The validity of any proceedings of the Committee shall not

be affected by any vacancy among its members or by any defect in the

appointment or nomination of any of its members.

PART V

Accounts of the National Audit Office

The accounts of the National Audit Office shall be audited

by such person or persons (hereinafter referred to as "auditor") appointed

by the Committee from among such persons who in accordance with

such law as may from time to time be in force hold a warrant entitling

them to audit the accounts of a public limited liability company.

The remuneration of the auditor shall be fixed by the

Committee and shall be defrayed as part ofthe expenses of the National

Audit Office.

The auditor shall have with regard to the accounts of the

National Audit Office such powers as are by law vested in the Auditor

General with regard to accounts subject to his audit.

The auditor shall present his report on the audit carried out

by him to the Committee which shall (through the Leader of the House

of Representatives) present the same to the House of Representatives

together with any comment thereon by the said Committee or any of its

members.

Passed by the House of Representatives at Sitting No. 96 of

Tuesday, 15the July, 1997.

Myriam Spiteri Debono

Speaker

RICHARD J. CAUCHI

Clerk to the House of Representatives.