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Cyprus

Auditor-general takes cabinet to task over consultancy hire

Auditor general Odysseas Michaelides

By Angelos Anastasiou

Auditor-general Odysseas Michaelides has blasted the cabinet for bypassing due tenders process in awarding a six-month contract for €50,000 to a business consultancy owned by a retired civil servant, local daily Politis reported on Monday.

In a letter dated December 30, 2014, addressed to Labour Minister Zeta Emilianidou, Michaelides referred to the case of Christoforos Georgiades, a former civil servant who retired in 2007 but was immediately appointed – the same day – to the Health Insurance Organisation (HIO), where he remained until October 2011.

In February 2012, Georgiades founded C.G. MANCONSULT LTD, a private consultancy.

The company was awarded a six-month contract for €50,000 by cabinet decision in July 2014 to help the labour ministry carry out the planning and implementation of the Guaranteed Minimum Income scheme.

But according to the Auditor-general, the cabinet did not have the power to make such a decision.

Furthermore, Michaelides questioned the rationale behind the awarding of the contract without considering other candidates.

In addition to the awarding procedures that violated government rules, Michaelides also noted that, while the labour ministry sought to employ Georgiades’ expertise, it opted to do so through his company.

This, the Auditor-general said, served no purpose other than allowing the taxation of the compensation under the company tax bracket, significantly lower than it would be if Georgiades received the income as an individual.

On a more general note, Michaelides noted that the government would do well to steer away from hiring retired civil servants, if only to avoid the perception of “recycling the same individuals”.

“Given the harsh times our country has fallen in, and with such high unemployment levels, it is not advisable to give the impression that we are recycling the same individuals”, the Auditor-general said.

He added some information relating to Georgiades’ record in the public sector, noting that following retirement in 2007, his pension was €29,145 annually until May 2011, when a law was passed suspending the pensions of all who were appointed to public office.

But although Georgiades left the HIO five months after the law was passed, thus regaining his full pension rights, he was one of the 58 officials who filed a successful case against the law, winning back their full pensions in October 2014.

Additionally, Georgiades also sued the HIO for damages of €39,459, claiming he had been placed in a lower salary bracket than his position warranted.

In response to Michaelides’ letter, labour minister Emilianidou said that the six-month contract with C.G. MANCONSULT LTD has not been renewed, and assured the Auditor-general that his “recommendations will be fully complied with in future”.

In addition, she said, the cabinet secretary has been instructed to issue a circular drawing the attention of all contract-awarding authorities to include the views of the Treasury in all proposals submitted to the cabinet.

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