Details are coming out from the Court case regarding Francine Farrugia’s €2.3 million fraud from MCAST. Previously, we pointed out that Francine Farrugia couldn’t not have executed her fraud if proper auditing and accounting procedures were in place: this means that Francine Farrugia’s fraud was also caused by management disasters.
We were in fact right, because Francine Farrugia had the capability of executing and disbursing payments single-handedly without a two signature system. Standard government accounting procedures entail that payments beyond €500 – €3,000 are always disbursed after the approval of two individuals. The capability of executing transfers electronically through online banking has led to many management officials in the government to skip this two signature system with the accounting executive directly making payments online.
Personally, as a previous government executive, I am also guilty of this because it was bureaucratically cumbersome to have every digital payment approved systematically by two persons. Our accounts executive used to execute online banking payments without the systematic digital approval of another signatory. However, I used to approve most of the payments in advance and we used to consolidate our accounts every end of the month with the bank statements also printed leading me to know exactly what was available and what was outgoing by each and every end of the month. I used to personally review and approve the consolidation of accounts every end of the month.
So, even though an accounting department within the government may issue payments without the two signature system, there are still many other accounting and auditing procedures which if applied, would have easily prevented Francine Farrugia’s massive fraud.
Government accounts are also often very bureaucratic and inflows into public entities from the public treasury also need several approvals. Clearly, Francine Farrugia had to orchestrate an elaborate fraud to get away with syphoning so much funds, but on the other hand the public treasury was not given the correct information by MCAST officials. MCAST officials were exclusively relying on information handed to them by Francine Farrugia which they did not verify, and they then had to pass on this information to the public treasury to receive further public funding.
The Minister of Education Clifton Grima has appointed a friendly and Labour Party Judge to cover up his and his official’s failings. The Ministry of Education is known for repeated gross management and bureaucratic failures.
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