Foundation for Medical Services riddled with employment and financial irregularities – NAO

The Foundation for Medical Services (FMS) – run by Health Minister Chris Ferne’s election campaign manager Carmen Ciantar – has been found to be riddled with recruitment, employment and financial irregularities, according to a recent audit conducted by the National Audit Office (NAO).

Among the irregularities flagged by the NAO are dozens of ‘persons of trust’ hired on generous public salaries without any form of accountability, promotions given to staff before they sat for interviews, employees paid higher salaries than they are entitled to, and persons of trust employed on an indefinite basis in contravention of public service rules.

The audit also found that one of the highest officials at the FMS was also recruited irregularly and is being given substantial performance bonuses without the approval of Minister Fearne and the Foundation’s board of governors. The official was not named in the report.

According to the audit, the FMS, which falls under the direct political responsibility of the Deputy Prime Minister, is being used as some sort of “recruitment agency for the Health Ministry,” hiring staff on a ‘person of trust’ basis.

The FMS, originally founded in 1990 to act as the project-manager of the Mater Dei hospital project, is now charged with carrying out the project-management and technical services operations of the Health Ministry.

Ninety irregular ‘persons of trust’

One of the most glaring findings in the NAO’s 2020 audit was that a total of 90, FMS ‘officials’, who are pegged to its salary’s structure – significantly higher than the public service pay structure – have never actually worked at the Foundation, but were instead deployed in other departments and entities within the Health Ministry. 

In some instances, officials were also working with ministries that had no connection of any kind with health. 

It also resulted that 23 of these ‘FMS officials’ were on contracts involving headship posts, all on a ‘position of trust’ basis.

The NAO said that all these positions do not feature on the Foundations’ HR plan and were not approved by the Industrial Relations Unit at the OPM, as required by standard procedure.

The NAO said that it considers this recruitment process “as a means of by-passing standard government employment practices”.

The audit also discovered that other officials, this time working at the FMS, were also employed on a ‘person of trust’ basis without the required approval of the minister and the permanent secretary at the Health Ministry. 

According to rules in place, ‘persons of trust’ can only be employed when a public vacancy call is not filled. However, in the case of the FMS, persons of trust were engaged even though no public call was ever made.

Also, it was found that many other FMS officials are being paid higher salaries than they are entitled to.

For example, a non-warranted engineer was being paid €2,000 more than entitled, while another was given a car cash allowance he was not entitled to “on a personal basis”.

While the public service and other ‘independent’ public entities have hit the headlines on numerous occasions for having hired hundreds of ‘persons of trust’ over the past few years, the NAO has found that the FMS is now also transforming these contracts into ‘indefinite contracts’ – something which is totally illegal.

It was also found that one ‘person of trust’ employed in a high level position was given a five-year contract, when the rules dictate that such agreements should only be entered into on an annual, renewable basis.

The audit found that a number of FMS officials occupying headship positions are being paid more than the maximum salary approved by the OPM, while an officer was being paid a qualification allowance for the attainment of a master’s degree even though this did not feature in the FMS structure and was not included in the officer’s employment contract.

FMS president going beyond his powers

The audit noticed that while there are specific rules which the FMS is clearly ignoring, particularly where it comes to recruitment, the president of the Foundation, Joseph Sammut, a political appointee of Minister Chris Fearne, is assuming responsibilities he does not have.

For example, while the employment contracts of four officials at the FMS were entered into with the government of Malta, the signing party on behalf of the latter was the FMS President rather than the respective minister and permanent secretary.

According to the law, the FMS president is not a government official.

The same appeared to be happening when it comes to the approval of substantial bonuses – paid from state coffers – to high-ranking officials.

According to the NAO, while the employment contract of a high-ranked official stipulated that performance was to be assessed by the FMS board and the minister, the appraisal and payment to the official was only endorsed by the FMS president.

“It was also noted that although Board approval indicated that the performance bonus percentages were as recommended by the Minister (Chris Fearne), documentation showing the specific recommendations in support of the above was not available, thus, the respective payment could not be verified”.

PN remains mum on FMS irregularities

FMS sources told The Shift that despite the unruly way which the Foundation has been managed over recent years, the PN opposition seems to be lacking any initiative to keep the government agency in check.

This is confirmed by the fact that the PN’s shadow minister for health, Stephen Spiteri, has never criticised the way the FMS is being administered and has failed to ask a single parliamentary question on the entity managed by Minister Fearne’s chief political campaigner.

Among its top managers, the FMS employs PN MP Clyde Puli – the former general secretary of the PN.