NAO investigating film commission’s spending on cash rebates

The National Audit Office is investigating the Malta Film Commission’s spend on rebates, a correspondence between the Auditor General and PN MPs shows.

In a reply to the MPs this week, Auditor General Charles Deguara said his office has started a “verification exercise” into the commission’s efficiency and effectiveness.

Last August, the Nationalist Party formally requested the Auditor General initiate an investigation into an expenditure of approximately €137 million by the Maltese Film Commission.

According to the PN, these funds were allocated to foreign companies registered outside Malta between September 2018 and August 2023. The party insists that this substantial amount, “funded by taxpayers,” could have been directed towards various sectors to enrich Maltese culture, support local resources, and foster domestic talents.

The NAO will be investigating whether the commission’s work is based on a clear strategy by national and ministerial authorities. It will also investigate whether the principles of accountability, transparency and good governance were followed by the commission.

Whether the commission’s spend on advertising the Maltese film industry was well-planned and according to policy, and whether this ultimately led to tangible benefits for the Maltese film industry will also be investigated.

The investigation will also be delving into whether the commission is properly supporting Maltese production when they seek access to financial incentives.

The Auditor General said the process of how money was approved and spent, as well as whether it was in line with European Union rules on State Aid, will also be looked at.

The aspect of due diligence before funds are payed out will be investigated by the NAO.

The Film Commission was recently put under the spotlight after it was revealed a €46.7 million payment was awarded to the company producing the sequel to the blockbuster Gladiator.

Official figures from the European commission’s state aid website shows the government issued €143 million in public funds to 54 films and television series in the past five years. The eye watering amount has raised eyebrows among local producers.

Reacting to reports, the Film Commissioner Johann Grech rebutted criticism by dubbing it “an attack on Malta”.

“This is an insensitive attack on the success of the film industry,” Grech declared in his missive. “Those attacking it are attacking our country... a motivated attack to scare off foreign investment, attacking your jobs and your investment in this industry,” he said, addressing viewers directly.