Govt-funded tunnel project ‘a shambles’ that highlights need for better oversight

The Principal Auditor uncovered “significant irregularities and lack of oversight” in a £248,086 government-funded project to renovate an abandoned tunnel near Europa Point.

The project, which was not put out to tender and was linked to the facilities for the Island Games 2019, had been quoted at approximately £85,000 and ended up costing £248,086 during the period 2017-2022.

“The audit examined adherence to tender regulations, payment verification, project documentation, planning, project management, invoice alignment, project completion validation, and accountability and transparency in governance,” the Principal Auditor said in his latest report.

“The audit revealed significant irregularities and lack of oversight, raising concerns about procurement fairness, financial propriety and value for money.”

The Principal Auditor found that all parties involved did not take accountability or responsibility for supervising the contractor or scrutinising the invoices presented and ensuring the satisfactory completion of the works.

Some of the report’s observations were highlighted on Wednesday by the GSD, including:

• There were duplicated invoices that led to the contractor being overpaid by £44,285;
• There was insufficient technical supervision or approval of the invoices submitted;
• Most of the invoices were approved by the Chief Minister personally, although the Principal Auditor was told he had done so in his capacity as Minister for Public Finance based on conversations with the relevant minister;
• The contract was awarded directly without following tender procedures;
• There was no formal contract governing the project or essential project documentation including a detailed schedule of works, estimated project cost, and a timeline outlining the project's duration;
• 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;
• Government officials had not visited the project site, except when the audit examiner had begun to ask questions as part of the review, something that the Principal Auditor said “strongly highlights the lack of oversight” over the project and the “absence of controls” over the verification of invoices;

The Principal Auditor was told the project could not be put out to tender because of the proximity of the Island Games in July 2019 but he concluded that this was “highly questionable” given that the first payment was in July 2017.

He said too that it was concerning that the head of department had been presented with an invoice “…without being aware that these capital works had been commissioned.”

The Leader of the Opposition, Keith Azopardi, said the case highlighted the need for new systems to ensure the proper award and supervision of Government contracts.

“This will ensure an end to waste and abuse and secure value for money,” he said.

“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.”