Performance Audit: An assessment of capital projects at the University of Malta

The Auditor General, Mr. Charles Deguara, presented the performance audit highlighted in caption to the Honourable Speaker of the House of Representatives Dr Anglu Farrugia. This performance audit focused on capital projects relating to the Sustainable Living Complex (SLC) and the Campus Hub to enable the NAO to determine the extent to which capital projects are fulfilling the University’s (UM) needs in a cost-effective manner. The National Audit Office (NAO) targeted these projects in view of their substantial financial materiality involved (€48 million and €46.7 million respectively), their specific objectives within the UM’s strategic development, as well as to enable comparative analysis between the direct implementation of projects by the UM and those that were subject to co-financing arrangements with the European Union (EU).

From a procedural perspective, the SLC project complied to EU requirements as it was supported by a sound business case which not only addressed financial considerations but also the UM’s current and future needs. As some justifiable delays materialised, the project team opted to deviate from aspects of the original project design to minimise the effect of project prolonging. Forfeiting the originally planned in-situ stone extraction, to be utilised for the substructure as well as for cladding purposes, resulted in a missed opportunity to better embrace the principles of the circular economy. On the other hand, the University intends to retrofit various sustainable elements into the SLC project.

An evaluation of the planning and project management approaches utilised in the Campus Hub project identified three main shortcomings. Firstly, the UM embarked on a project financial feasibility appraisal on the receipt of the Request for Proposals (RfP) but it did not make available initial workings. Secondly, the UM issued an RfP directly rather than through the Department of Contracts (DoC). Whilst this approach was not irregular at the time, best practices dictate that the UM would have exploited competitive advantages and safeguarded its interests further had it opted to utilise the tendering expertise available at the DoC. Thirdly, coordination issues hampered the UM/Government from fully crystallising their needs at an early stage, preferably prior to the issuing of the RfP. These circumstances effected the potential relocation of the Medical School within Campus Hub, the amount of space that the UM was to lease from this project and the management of the car park.

From a value for money perspective, the NAO noted that the SLC’s development costs are largely in line with the prevailing market prices within the construction industry. Although the SLC has largely managed to retain its costs within budget, this could be impacted negatively in case of severe delays given the increasing costs of materials and works in recent years.

Similarly, the Campus Hub project fulfils financial and economic criteria. Nevertheless, this audit questions whether the UM could have made a better deal. This statement considers the non-involvement of the DoC and the possible relocation of the medical school.

This performance audit has shown that these two projects have the potential to enrich University life. This review has also confirmed that the UM’s administrative framework has the appropriate capacity to implement capital projects of significant magnitude and to monitor their outcomes in terms of the University’s strategic objectives. Yet their impact in financial, economic and social terms could have increased through better communication, coordination and planning.

Nonetheless, this report elicited a number of issues relating to the management processes adopted and value for money. In this regard, the NAO proposed a number of recommendations.