Rosianne Cutajar’s ITS job slammed by NAO: ‘Illegitimate, breached regulations and irregular’

Updated ay 8:00am with Rosianne Cutajar's statement

Rosianne Cutajar’s employment as a consultant to the Institute for Tourism Studies’ CEO in 2019 was “illegitimate” and breached regulations, the National Audit Office concluded.

In a scathing opinion, the NAO found no evidence to substantiate the need for ITS to employ a consultant, also questioning the MP’s credentials for the contracted job.

The NAO report titled A Review Of The Employment Agreement Of The Consultant To The Chief Executive Officer, Institute Of Tourism Studies, was tabled in parliament on Tuesday. The investigation into Cutajar’s employment started following a complaint filed in March this year by former ADPD chair Carmel Cacopardo.

The complaint was triggered by the publication earlier this year of a cache of WhatsApp exchanges from 2019 between Cutajar and Daphne Caruana Galizia murder suspect Yorgen Fenech. In the exchanges, published by blogger Mark Camilleri, Cutajar boasted that she would soon start working as a consultant to ITS CEO Pierre Fenech.

The NAO said Cutajar’s employment was “illegitimate, in breach of regulations” and the contract’s backdating “irregular”.

The implication of the NAO’s conclusion is that the job at ITS was specifically created for the then Labour MP, a fact strengthened by Cutajar’s own admission to Yorgen Fenech that ‘everybody is pigging out [on public funds]’ and she had no qualms of doing the same by becoming Pierre Fenech’s consultant.

The NAO said the financial beneficiary of the breaches flagged in its report was Cutajar but this was facilitated and rendered possible by the actions of Pierre Fenech when consenting to the disbursement of public funds “he was duty bound to safeguard”.

Cutajar’s consultancy lasted from May 2019 up until January 2020 when Robert Abela appointed her parliamentary secretary for reforms.

Cutajar was subsequently removed from her Cabinet post after MaltaToday revealed that she acted as a broker in a property sale involving Yorgen Fenech. She went on to successfully contest last year’s general election with the Labour Party but was not given a Cabinet post.

Cutajar was forced to resign from the PL earlier this year following the publication of the WhatsApp messages but remained in parliament. She sits as an independent MP.

Meanwhile, Pierre Fenech is still CEO at ITS.

ITS governors in the dark

None of the ITS’s annual reports and other internal quality assurance audit reports made any reference to the need to engage a consultant, or any position to aid the CEO, the NAO said. Additionally, the new role was not even referred to the board of governors of the ITS despite this being responsible for discussing issues related to human resources.

ITS CEO Pierre Fenech delivering a speech in September 2019 (Photo: Facebook)

Pierre Fenech justified Cutajar’s employment by stating that the board had approved the need to carry out a review of the institute’s policies and procedures in March 2019 but the minutes made no reference to the appointment of a consultant.

During a meeting of the board on 17 May 2019, the CEO put forward a new HR plan, which included new proposed posts and others that were vacant at the time. But the NAO noted “with concern” that the plan did not include the post of consultant to the CEO despite Cutajar having been supposedly engaged two weeks prior.
The ITS CEO told the NAO he “assumed that individuals engaged on a trust basis were not to be included” in the institute’s HR plan.

In three other meetings of the board of governors held after May 2019, no reference to Cutajar’s engagement was ever made.

Basis for remuneration ‘obscure’

But the NAO also raised concerns over the remuneration afforded to the MP. “The basis for remuneration set remained obscure and unsound, with the rate payable exceeding established thresholds,” the NAO said.

It added: “As with all aspects of this engagement, no documentation substantiating that claimed by the CEO ITS regarding the setting of remuneration payable to the consultant was submitted.”

The NAO said Cutajar’s engagement was in breach of all regulations governing recruitment. Indeed, the manner by which the MP was employed neither satisfied public service regulations nor those governing the engagement of persons of trust.

Fenech claimed the need for a consultant was discussed in April 2019 with the tourism ministry’s chief of staff, who later informed the CEO of Cutajar’s name.

However, the NAO was not provided with records of these exchanges with the CEO saying these were made over the phone.

Significantly, the chief of staff sent the CEO an email on 5 June 2019 with an attachment titled ‘Contract RCutajar’ which was the draft contract of employment. This chronology and the payment of arrears in Cutajar’s first pay cheque, led the NAO to conclude that the contract was backdated, a practice deemed irregular.

NAO questions competence

On a different note, the NAO also questioned Cutajar’s competence for the role considering the job description included in the contract that also required her to prepare and review financial reports.

The NAO said: “Notwithstanding the arguments put forward by Hon. Cutajar, the NAO is of the opinion that certain functions and duties required technical expertise, such as the preparation and review of financial reports, and the ensuring of legal compliance. In both these respects, Hon. Cutajar did not have the necessary expertise to fulfil these duties in a diligent and professional manner, thereby casting doubt on the rationale to engage the consultant and the basis of her employment.”

Additionally, the audit office found “scant evidence of work carried out” by Cutajar in her new role.

“In sum, based on the submissions by the ITS and Hon. Cutajar, the evidence of work carried out by the consultant [Cutajar] over a period of approximately eight months consisted of screenshots of the calendar event of two meetings organised by the CEO ITS, the referral of the Institute’s organisational chart, and journal entries of another ITS official corresponding to four meetings,” the NAO said.

Under-declared income

The NAO expressed “concern” over Cutajar’s submissions to parliament, which under-declared her income from public funds.

According to the NAO, Cutajar’s gross income declaration submitted with the Cabinet Secretary was understated by €14,132.

Aside from her engagement with the ITS, in 2019, Cutajar earned income of €43,777 from her role as Commissioner for Simplification and Reduction of Bureaucracy and €26,165 as a Member of Parliament. Aggregated with the €18,190 earned in 2019 as consultant, her gross earnings amounted to €88,132.

“This income exceeded the €74,000 declared by Cutajar by €14,132,” the NAO said.

Only last week, the Standards Commissioner said he was unable to investigate the ITS consultancy deal given to Cutajar since a complaint about it was filed too late according to the law. Cutajar erroneously had claimed the report exonerated her from wrongdoing. The NAO findings today clearly put a damper on the MP’s euphoria.

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Rosianne’s tourism school contract explained

When was Rosianne Cutajar engaged as a consultant?

The contract of employment was entered into between Institute for Tourism Studies CEO Pierre Fenech and Cutajar on 2 May 2019.

What was her remuneration?

The contract of employment was for a three-year period with a remuneration set at €27,000 annually. She was paid an hourly rate of €21.63 per hour, exceeding the threshold in force at the time of €18.59 per hour.

What hours was Cutajar expected to work?

The contract stipulated that she had to work for 24 hours a week.

What were Cutajar’s duties?

The contract stated that her duties comprised providing strategic and operational support, establishing performance standards and indicators, acting as a representative of the Institute and facilitating stakeholder management, the drafting and reviewing of financial documents, and enforcing adherence to legal guidelines and internal policies.

When did the contract end?

Cutajar resigned from her employment as consultant on 13 January 2020 on her appointment as parliamentary secretary for equality and reforms.

How much did she earn?

During her engagement as consultant, Cutajar earned a gross income of €19,195. 

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'I worked for every cent I earned,' Cutajar reacts

Reacting on her social media, Rosianne Cutajar said that, irrespective of what the Auditor General said, the truth is she worked for every cent she earned.

“I want to make this clear, for every cent I earned, I paid back tax,” she said. “Anyone who knows me knows that I am a person full of energy and enthusiasm. To cast doubt on whether I gave my contribution or not is totally unjust.”

Addressing why she presented no evidence of work, Cutajar explained that if she knew this would have surfaced four years after starting work at ITS, she would have kept every document.

“I had no reason to, though, and I left immediately upon my appointment as Parliamentary Secretary.”

The former Labour MP then turned her attention towards opposition leader Bernard Grech when recalling how he “had not paid tax for twelve years.”

She claimed that PN MPs are known for their government-appointed jobs, which they never go for.

“It would have made more sense if Bernard Grech asked his former and current deputies to refund the money they took as an increase in the honorarium people’s backs. Money, which after being caught with, they said they would refund and until now it turns out that there is still a million euros running in their pockets.”