The company set up by the government to oversee maintenance requirements at social housing estates has been found by the National Audit Office (NAO) to be operated by amateur management leading to serious suspicions of gross mismanagement and abuse of public funds.

According to the NAO, the company which currently has 34 employees, nine of them on contracts of service extended every few months, is inundated with major weaknesses “indicating that the deficiencies were part of the modus operandi of the same company”.

The company – Housing Maintenance and Embellishment Ltd – falls under the remit of Social Housing Minister Roderick Galdes and has been stuffed with people from his electoral districts or others openly loyal to the Labour Party in government.

One of the serious concerns raised by the NAO is that none of the contractors carrying out work on various housing estates, including in Bormla, Naxxar and Zabbar, were charging the government company according to contracts signed.

Instead, they were charging much higher rates with the government company approving hundreds of thousands of euro in payments with no questions asked.

Works in progress were not being measured, and so both the billing by the contractor and the sales invoices issued by the government company were only based on estimates, the NAO found.

Also, while contractors were not meeting deadlines, costs increased significantly while the government entity extended the contracts “indefinitely” without the necessary authorisation.

“The original contract price was exceeded in all the three projects reviewed, aggregate payments for the Bormla project were more than three times as much, while that for the Zabbar project was more than double. Projected costs for the façade work at the Naxxar Housing Estate were also exceeded by 38 %,” the NAO noted.

No retention money was being kept by the company, as required by contracts signed, and penalties for late completion of works were not enforced.

No performance guarantees were submitted by contractors while works were not covered by insurance policies.

While the NAO also found many instances where invoices were not paid according to VAT rules, unidentified employees of the company inexplicably spent some €2,500 of public funds in perfumes, jewellery items, Christmas hampers and a donation.

This is not the first time the government entity was outed on cases of abuse.

In 2019, during the political turmoil which led to the resignation of disgraced former Prime Minister Joseph Muscat’s and his closest aides, it was revealed that the middleman in the assassination plot to kill Daphne Caruana Galizia, Melvin Theuma, was given a job at the same company. He was being paid every month even though he never turned up for work.

It emerged in court proceedings that the job was given to Theuma by Muscat’s chief of staff, Keith Schembri. While the head of civil service, Mario Cutajar, had immediately tried to belittle Theuma’s claims of a government phantom job, he then had to reverse his statement.

Almost all the directors appointed on the Board of Housing Maintenance and Embellishment are Party’s insiders.

Chaired by 70-year-old George Meli, the board includes Massimo Azzopardi, Chantelle Georgina Camilleri and Victor Camilleri, all residing in Qormi. They are joined by Jesmond Tanti, from Siggiewi. Both localities are the minister’s constituency.

Galdes also appointed Maria Grech, the former personal assistant of Michelle Muscat, wife of the disgraced former prime minister.

The company secretary is also a political appointee. Marouska Pisani Bugeja, a former PN employee turned Labour TV producer, was given this position. She was also given an advisory role with Minister Aaron Farrugia, as well as being appointed director of Tech Malta.