PRESS RELEASE BY THE NATIONAL AUDIT OFFICE: Joint Audit: An Evaluation of the Community Work Scheme

The Auditor General presented to the Speaker of the House of Representatives the National Audit Office (NAO) report entitled ‘An Evaluation of the Community Work Scheme.

The Community Work Scheme (CWS), as an active labour market initiative which primarily seeks to improve the employability opportunities of severely disadvantaged persons, operates within difficult parameters in view of the social circumstances of these persons. Despite the inherent risks associated with preparing and encouraging disadvantaged individuals to find more gainful employment, the scheme proved economically viable although its implementation yielded mixed results.

From 2016 to 2018, the central government incurred an expenditure of over Euros 30 million (VAT included) in relation to the scheme. As at September 2018, the scheme employed 839 persons within Social Purpose Entities (SPEs). These include local councils, schools and NGOs. A Concession Agreement between Jobsplus and the Community Work Scheme Enterprise (CWSE) Foundation establishes the CWS’s operational framework.

The CWS satisfied principal value-for-money criteria in relation to its economic viability. Outsourcing costs in relation to the management and operation of the scheme were based on the cheaper bid through competitive tendering. Cost benefit analysis highlighted that the scheme’s optimal economic potential would be largely dependent on output levels. The CWS also fulfilled macro-economic criteria as employment within the scheme has contributed to government finances and economic growth.

In cases, the provisions within the Concession Agreement did not provide the appropriate level of detail to ascertain that the contract would stand the test of being the ultimate point of reference should disagreements arise. Examples in this respect relate to the scheme’s deliverables, eligibility criteria and the provision of training to participants. The Concession Agreement also omits references to conflicts of interests and on penalties and incentives.

Employability audits carried out by the CWSE Foundation ensured that the 839 participants could be deployed with SPEs where they could best utilise their competencies. On the other hand, at least nine per cent of participants joined the scheme through the catch-all eligibility criteria of ‘additional resources’, whereby Jobsplus can nominate additional resources to the scheme. To date, organised training to participants by the CWSE Foundation has been minimal. Furthermore, agreements between the Foundation and the various SPEs are not standardized with the consequence that, in some cases, slightly differing working conditions prevail.

In view of the financial materiality involved, the monitoring of the CWS assumes a critical function. However, due to a lack of sufficient resources, Jobsplus does not have the adequate structures in place to perform more in-depth reviews of the scheme. The absence of performance indicators prohibits the Foundation and SPEs from gauging the scheme’s effectiveness in a more objective manner. Moreover, the setting of workers’ tasks and the monitoring of productivity levels by SPEs are generally based on subjective criteria.

This Office contends that addressing the issues noted above diminishes the risks that the scheme would evolve into solely striking off severely disadvantaged persons from the unemployment register by absorbing them within the CWS. In turn, such circumstances would trigger a shift from the scheme’s original objectives where the CWS would become an end in itself rather than a vehicle to develop individuals and improve their employability opportunities within more productive sectors.

This Report may be accessed through the National Audit Office website www.nao.gov.mt or Facebook page www.facebook.com/NAOMalta.

Source: Government of Malta