Finance Minister Prof. Edward Scicluna said that the Government is committed to strengthening the Malta Statistical Authority (MSA) to ensure that the entity would be able to better regulate the National Statistics Office (NSO) and be a driver for change and improvement.
Prof. Scicluna was speaking during a press conference held on Thursday 20th February 2014, during which he discussed the findings of an inquiry he had requested following an error in GDP figures reported by the NSO late last year. The error had a significant effect on the 2013 second quarter’s GDP figure, which was mistakenly listed as 1.7%, but was in fact corrected to 3.6%.
Prof. Scicluna noted that when the ministry requested the inquiry, he had taken the opportunity to not only request that the cause of the error be determined, but also to request that the inquiry identify the strengths and weaknesses within the NSO’s data-handling processes.
“We should not hide weaknesses, but uncover them and address them,” Prof. Scicluna stressed, underlining that rigorous and accountable data-handling processes are all the more important within the context of how European Union financial crisis has its roots in the manner in which Greece was found to have altered and released misleading public finance figures.
Prof. Scicluna said that the financial crisis had led to increase statistical governance and heightened scrutiny to ensure that both national and European statistical entities, like the NSO, rigorously apply the necessary controls for data to be reliable and timely.
Prof. Scicluna noted that deficit and debt benchmarks, which could result in Excessive Deficit Procedures and consequently the imposition of punitive measures, cannot be allowed to be doubted.
“The Government, the Commission, Maltese businesses, and investors at large expect reliable data as a basis for their decision-making,” Prof. Scicluna stressed.
Prof. Scicluna also said that the inquiry was carried out with the assistance of an external expert, who assisted the Malta Statistical Authority in assessing the strengths and weaknesses of systems within the NSO, and also proposing recommendations.
Prof. Scicluna underlined that he is committed to strengthen the Malta Statistical Authority so that it can fulfil its function as a regulator, and be a driven for improvement and change within the NSO. To this end, the MSA will be given additional resources and support, and will also be rebased in a separate location, to further reinforce the separation between the MSA as a regulator, and the NSO as an operator.
In his own address, MSA Chairman Professor Albert Leone Ganado said that the NSO’s error was caused by a human error in the transmission of a figure from one unit to another. He explained that this emerged from a weakness in error checking due to the lack of a common database and consequently heavy use of spreadsheets, and that despite the presence of strong error controls within units, cross-unit checking was insufficient. He also noted a lack of a documented and standard internal control system based on a quality manual.
Professor Leone Ganado said that following the discovery of the error, the NSO carried out immediate changes as a temporary measure. These included the involvement of a checking team external to the involved unit, and also the implementation of measures that required staff to document all checking processes carried out and signing them off, as well as increased checks to ensure consistency and data integrity in transmission between units.
He also underlined the importance of the introduction of a formal system of error logging and reporting with actioning at the appropriate level, as well as further research and innovation to introduce more formal relational and economic checks.
Professor Leone Ganado also discussed various medium to longer-term measures, which include adopting a strategic approach to quality control involving and empowering staff at the various levels, and the adoption of a culture of good practice where quality is owned by staff at all levels.
He also said that the NSO would be carrying out a review of quality control on a structured office-wide basis, and would be reporting back to the MSA in six months time, and that a quality manual would be created which documents compilation and method procedures and other data integrity considerations.
– Thursday, 20th February, 2014