Konrad Mizzi’s father still heading RSSL, as audit notes lack of governance and mismanagement

Serious shortcomings in governance, payroll controls and record-keeping at Resource Support and Services Limited (RSSL), a government-owned company falling under the remit of the Office of the Prime Minister, have been identified by the National Audit Office (NAO), which warned that the weaknesses resulted in incorrect payments, including significant overpayments.

RSSL was set up in 2003 following the restructuring of Malta Shipyards Limited and is tasked with employing surplus workers from government-controlled entities and redeploying them across the public sector.

In 2024, the company employed 629 people, most of whom were deployed with government departments, public entities and local councils.

The audit also examined the integration of former Air Malta employees under voluntary transfer schemes launched in 2022 and 2024.

According to the NAO, RSSL operates without a clearly defined governance and operational framework. It has no formal mission statement, no documented policies or procedures governing its operations, and no structured agreements regulating its relationship with the entities to which employees are deployed.

Auditors warned that this lack of structure risks inconsistent decision-making, weak accountability and disruption to business continuity.

The report highlights that RSSL’s board of directors increased from four to five members during the year under review, with the chairperson, 73-year-old Lawrence Mizzi, father of disgraced former Minister Konrad Mizzi, also serving as chief executive officer.

Despite this concentration of roles, the financial statements did not distinguish between remuneration paid for the CEO and chair functions, with the full €36,291 classified as directors’ remuneration.

Financially, RSSL was allocated an approved estimate of €17.5 million for 2024 under a budget line administered by the Office of the Prime Minister.

Actual direct payroll costs, however, reached €19.63 million. Of this, €15.94 million was charged directly to the government vote, while the remainder was financed through recharges for overtime and allowances, as well as accumulated surpluses from previous years.

After administrative overheads, the company recorded a surplus of €553,009 for the year, bringing the balance due back to the government to €1.47 million at the end of December 2024.

A significant area of concern related to payroll processing, which is outsourced and relies heavily on manual spreadsheets prepared by RSSL staff. The NAO found that there were no internal verification procedures to ensure the accuracy of payroll adjustments before they were sent to the contractor, nor systematic checks on the contractor’s output. This, auditors said, created a heightened risk of error.

Based on a review of 30 employees, the NAO identified multiple mistakes, including an employee who continued to receive full allowances despite working reduced hours, resulting in an overpayment of €12,971 in 2024.

Other cases included duplicated allowance payments, sick-leave deductions processed twice, a €2,411 recovery that was never affected, and the omission of a statutory cost-of-living adjustment. The NAO cautioned that these cases were not exhaustive and that further errors could not be ruled out.

While certain salary figures provided by Air Malta were independently verified by private audit firms, the NAO noted that RSSL generally relied on external data without performing its own validations.

In one case, RSSL paid €93,278 to cover salary differentials for former Air Malta employees after the airline ceased operations, despite inconsistencies noted in supporting documentation.

Beyond payroll, auditors raised concerns about the poor upkeep of personnel records. In more than half of the employee files reviewed, there was no documentation confirming applicable grades or salary scales, making independent verification difficult. In one instance, an employee’s salary did not correspond to any scale in the relevant collective agreement.

The NAO also criticised RSSL’s passive approach to collecting overtime and allowance information from employing entities. The company takes no proactive steps to ensure the timely submission of data and uses no standardised reporting format, further weakening oversight.

In its recommendations, the NAO urged RSSL’s board to define and communicate a clear strategic vision, formalise policies and procedures, strengthen payroll controls, introduce automated systems to replace manual spreadsheets, and improve personnel record-keeping. It also called for the recovery of overpaid amounts and a more precise classification of senior officials’ remuneration.

In its response, RSSL attributed many of the weaknesses to the sudden influx of more than 300 employees over a short period, which strained its administrative capacity. Management said steps were being taken to strengthen controls, widen payroll testing, automate systems and introduce personal record sheets by January 2026. Agreements have already been reached to recover certain overpayments.

While noting RSSL’s cooperation during the audit, the NAO concluded that inaccuracies in information provided slowed the audit process and underscored the need for stronger internal controls and more reliable governance practices.