NAO flags culture ministry entities for opaque project funding, missing evidence for executive decisions

The Arts Council of Malta (ACM) and the Malta International Contemporary Art Space (MICAS), two entities that fall under the remit of Culture Minister Owen Bonnici, were taken to task by the National Audit Office (NAO) for failing to adequately document how decisions were made and how funds were allocated, among a host of other issues identified.

Every year, the NAO’s auditors carry out extensive assessments of a sample of national authorities, producing a detailed report on individual entities as well as a broad overview of the government’s expenditure and income.

The NAO’s report focused on two specific lines of inquiry in relation to the Arts Council and MICAS – the ACM’s Theatre Spaces Funding Scheme, which was set up “to provide financial resources to improve selected spaces” for theatre performances, and MICAS’ capital expenditure “incurred for the construction of artistic galleries.”

The Arts Council’s funding scheme, which disbursed a total of €900,400 to three theatres, was marred by a lack of transparency in the allocation of funds and weak oversight of the successful implementation of the projects.

This weak oversight led to glaring instances of poor governance. One example noted by the NAO is multiple missing conflict-of-interest declaration forms which were supposed to be signed by evaluators who oversaw the distribution of funds.

Those same funds were used to lease auditorium space from the Artistic Director of Teatru Malta, Sean Buhagiar – who also sat on the board of evaluators himself.

Buhagiar is a widely known figure in the scene. He was Mario Philip Azzopardi’s business partner in a Maltese theatre venture and is a regular recipient of public procurement contracts.

“A contract signed in 2017 by ACM, among other areas, secured the lease of the auditorium space at one of the theatres, which benefited under this scheme intended for the use as administrative offices and a rehearsal venue for Teatru Malta. The premises were rented for an annual rental fee of €10,000 (excl. VAT),” the report reads, noting that the lease was vacated in 2021.

“In the interim, the Artistic Director of Teatru Malta, who worked from this theatre, sat on the Evaluation Board of this scheme. In the circumstances, it would have been more appropriate had another person been nominated as a member of this board in his stead,” the report adds.

One of the other three theatres that benefited from public funds managed by an unnamed band club spent €380,302 of the funds it received and has failed to complete the project six years after the funds were first disbursed.

The ACM failed to take any corrective action on this matter, with its last correspondence with the beneficiary dating back to 2022.

State auditors further noted that the parameters for awarding funding were unclear because of conflicting clauses in the guidelines intended to regulate the process. One clause stated that this was to be at the sole discretion of the Evaluation Board, while another referred the matter to “the ACM and/or Teatru Malta.”

Records justifying why the three beneficiaries were selected were also scant, with auditors stating they had “no insight” on the basis on which amounts were granted for the selected projects.

Meanwhile, over at MICAS, auditors flagged an even longer list of issues. MICAS is a contemporary arts space that cost taxpayers around €26 million while being inaugurated three years late.

Some of the more serious examples of maladministration include missing performance guarantees and full insurance coverage for historically sensitive procurement works, official approvals issued days after works began, and retrospective approvals for payments after additional funds for ongoing works were already disbursed.

MICAS’ board of directors, chaired by Phyllis Muscat, did not provide adequate information to the NAO about how the board’s honoraria were paid. The board also failed to meet at least once every two calendar months, with just five board meetings held last year.

Muscat, who’s been in charge of MICAS since the agency responsible for the project was first set up six years ago, spent €225,000 on the launch alone, with a third of that budget going to one of the Labour Party’s key logistics partners, TEC Ltd.

Under Culture Minister Owen Bonnici’s tenure, both ACM and MICAS have consistently displayed a pattern of largesse with public funds.