Education Minister, MCAST Board ignored years of warnings on payroll

Education Minister Clifton Grima and his Board of Governors at MCAST had been warned, in writing, for years about the lack of controls and poor management in the College’s payroll administration but they took no measures to address the situation.

The scandal centres on Francine Farrugia, a finance manager at MCAST and a former Nationalist Party councillor, who stands accused of systematically embezzling college funds beginning in September 2023.

Both Minister Grima and his appointed board were repeatedly informed in writing of critical weaknesses in MCAST’s payroll administration over several years.

Despite the warnings—most notably from the National Audit Office (NAO) in 2019 and again in 2023—no significant remedial action was taken.

A 2019 audit by the NAO found a complete lack of internal auditing mechanisms within MCAST’s payroll processes. It identified systemic flaws, including an absence of proper checks on how payments and allowances were calculated and disbursed. Yet the report’s recommendations were effectively shelved.

The situation escalated to such a degree that, in June 2023, the NAO issued a follow-up report, explicitly stating that its earlier warnings had gone unheeded. Among the most damning findings was the continued lack of basic validation in the college’s payroll software.

“MCAST confirmed that the payroll’s inbuilt validation system does not function,” the auditors wrote. “As a result, if an obvious error is recorded—for instance, 100 hours of overtime entered by a lecturer for a single day—this is not automatically flagged by the system.”

The NAO went on to stress the urgent need for a functional data verification mechanism to ensure the accuracy of payroll inputs. The June 2023 report, made public at the time, should have served as a final wake-up call.

Instead, just weeks later, Farrugia allegedly began siphoning off public funds—an act that might have gone undetected indefinitely were it not for police intervention. Sources close to MCAST told The Shift that the embezzlement could have been prevented had action been taken on the red flags raised over the past five years.

“The least one expects is their resignation en bloc,” said one source, referring to the President and Board of Governors. “The NAO highlighted all of this—black on white. Where were the auditors? How can someone transfer €2.3 million to their own account over two years, and no one notices?”

Carmel Cacopardo, Deputy Chair of the ADPD, has called on the NAO to launch a full investigation to establish accountability for the lack of internal controls.

Financial analyst Paul Bonello, who previously conducted an Education Ministry probe into a separate “jobs-for-votes” allegation at MCAST in 2019, said he was unsurprised by the revelations. Taking to social media, he described the college as “a total mess” and laid the blame squarely at the government’s feet.

“The government had all the evidence that MCAST’s management lacked even the most basic competencies,” Bonello wrote. “Chairpersons were more interested in public appearances than proper governance, sweeping warning signs under the carpet and even hiding inquiry reports from board members.”

He accused Prime Minister Robert Abela of turning a blind eye: “You reap what you sow, RA. This is hardly a phenomenon confined to MCAST.”

At the time the NAO issued its warnings and during much of the period in which the alleged fraud occurred, MCAST was under the leadership of Board President Professor Ian Refalo and Principal James Calleja. Calleja, a senior academic, was reportedly receiving two government salaries, amounting to €114,000 annually.

The current President of the Board of Governors is Horace Laudi.