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GSD: Europa Sports Contract Raises Wider Value For Money Issues

The GSD have issued a statement relating to a contract to renovate a tunnel under the Europa Sports Hall.

A statement from the GSD follows below:

A contract to renovate a tunnel under the Europa Sports Hall was awarded outside the tender process and was then  not supervised properly. That is the conclusion of the Principal Auditor in a spot-check Value for Money Audit on that  project. The sequence of events reveals a lax regime for the award and supervision of contracts which raises deep  value for money questions. 

The project had been quoted at approximately £85,000 and ended up costing £248,086 during the period 2017-2022. The Principal Auditor finds that: 

  • There were duplicated invoices that led to the contractor being overpaid by £44,285 [5.5.4]; • There was insufficient technical supervision or approval of the invoices submitted; 
  • Most of the invoices were approved by the Chief Minister personally [5.5.49 and 5.5.37}; • The contract was awarded directly without following tender procedures;  
  • there was no formal contract governing the project [5.5.7] “Despite the persistent efforts of the audit examiner  to obtain essential project documentation, including the detailed schedule of works, estimated project cost,  and a timeline outlining the project's duration, none of this information could be provided because it did not  exist” [5.5.24] 
  • neither the Gibraltar Sports & Leisure Authority, Ministry for Housing & Sport or Office of the Chief Minister  had contractual oversight, invoice scrutiny or responsibility for project completion [5.5.9] • “the Director of the company openly admitted that government officials had not visited the project site, except  when the audit examiner had begun to ask questions as part of the review. This admission strongly highlights  the lack of oversight over the project and the absence of controls over the verification of invoices received  from the contracted company” [5.5.32]; “payments to the company were made without the mandated  inspections to ensure the satisfactory completion of various project phases” [5.5.45]; “this lack of oversight  has contributed to the escalation of costs” [5.5.46]. 

The Principal Auditor was informed that the project could not be put out to tender because of the proximity of the  Island Games in July 2019 but concludes that this is “highly questionable” because the first payment was done in July  2017 – two years before the Island Games were due to start [5.5.19]. He adds that it is concerning that the head of  department was presented with an invoice “…without being aware that these capital works had been commissioned.” [5.5.35]. 

Leader of the Opposition, Keith Azopardi said: “We have been saying for years that there has to be new systems put  in place to ensure the proper award and supervision of Government contracts. This will ensure an end to waste and  abuse and secure value for money. This specific audit precisely kicks up the kind of issue that the GSD has been  campaigning on for years. People will be rightly angered by these failures that lead to waste of their hard-earned  taxpayer monies. 

The contract was awarded outside tender procedures and its supervision was a shambles. The Government had not  even realised that they had paid the contractor twice till it was pointed out by the Auditor in October 2022 – nearly  three years after the duplicated invoice was paid! The invoices were being approved by the Chief Minister without any 

real thought. No-one was providing technical review and no-one went on site during the job. If this is an example kicked up on a spot-check of how contracts are awarded and not supervised it is not far-fetched to believe that there  will be many other issues of value for money and supervision that may arise on other contracts. Looking at the Principal  Auditor’s report it is clear that this is not an isolated experience and that there are other examples where value for  money questions arise in the supervision of Government contracts. These things cannot continue like this and it  demonstrates again that the pretence by the GSLP/Libs that contracts are adjudicated and supervised properly under  their administration is entirely hollow.”