No contracts, standardisation in BCA’s direct orders – NAO

The Building and Construction Authority (BCA), responsible for regulating the construction industry, was found to have abused direct orders, paid for services with no contractual agreements, and dished out unapproved payments, according to an audit by the National Audit Office (NAO).

The audit, part of a report published on Monday, also found deficiencies in the authority’s procurement and payroll processes, with the authority lacking standard procedures to ensure their transparency and verifiability.

The Building and Construction Authority was set up in April 2021, taking over and expanding the duties undertaken by the similarly named Building and Construction Agency established two years earlier. The authority, formerly under the remit of then-Infrastructure minister Ian Borg, is now part of Planning Minister Stefan Zrinzo Azzopardi’s portfolio.

Since its set up, the NAO found the authority’s procurement, amounting to some €600,000 was “generally made by direct orders,” which were “split into various amounts not exceeding €10,000 evidently to bypass procurement regulations,” and ministry approval.

The payments were made for the authority’s basic functions, including IT, architecture, accounting, and support services. In many cases, the NAO found that the authority did not have binding contracts with the consultants and suppliers and did not obtain quotations.

In one case, an IT consultant received tens of thousands of euros in direct orders in just a few months “without a formal agreement and finance approval.” The Shift revealed last month how the consultant, Antoine Bartolo, was later employed by the authority as its chief officer of core operations.

Apart from his €70,000 salary (including allowances), Bartolo netted an additional €10,000 “ad-hoc allowance” to which he was not strictly entitled. But in comments included in the NAO report, the BCA claimed this was “fair and reasonable” given Bartolo’s duties.

Former BCA CEO Karl Azzopardi, who appointed Bartolo, was forced to resign just a few months later, after a fallout with Planning Minister Zrinzo Azzopardi over the authority’s direction.

The NAO found that the authority did not employ a full-time accountant, engaging a third-party accountant instead. The audit office found that for this accountant, “no formal contract was entered into; the agreement was verbal,” despite payment amounting to some €50,000 between 2021 and 2022.

Since the authority’s set up, the NAO also found that it had issued unapproved allowances to some employees and tens of thousands of euros in overtime payments, which were not pre-approved or were only partially approved.

In the authority’s comments included in the audit office’s report, its management claimed that many of the direct order payments and consultancy engagements were approved by former chief officer Michael Ferry and former CEO Azzopardi.

The authority’s administration and effectiveness in improving industry conditions have long been a subject of doubt. The Shift has reported on conflicts of interest with its former chairperson, its lack of cooperation in investigations by the Chamber of Architects, its defiance of government directives, and its controversial, politically appointed current CEO, Jesmond Muscat.

In testimony at the public inquiry into Jean Paul Sofia’s death at a construction site last December, the BCA’s effectiveness was questioned, revealing a construction industry unknown to its regulators.