Silencing the auditor: How Gibraltar's government blocked scrutiny of its public finances

Public audit is seldom a term that gets the heart racing. It conjures imagery of people in suits, diligently and methodically working through mountainous paperwork and endless spreadsheets. These quiet currency counters are rarely front and centre in the news, yet they play a crucial role in protecting the public purse. When they do come to national prominence, something has usually gone very, very wrong, as we saw during the pandemic.

It is for this reason that Gibraltar’s outgoing Principal Auditor has caused a stir down on the Rock.

In his last report as comptroller, Tony Sacramento lists a series of eye-popping concerns about the management of public finances in this British Overseas Territory, and unconstitutional interference in his role – including by the Chief Minister. As detailed below, the Chief Minister’s office has countered Mr Sacramento’s allegations in emphatic style, claiming him to be politically motivated.

Here are three stand out findings of the Principal Auditor from just a cursory review of the 500-page document.

He claims the Government of Gibraltar made a series of ex-gratia payments worth over £13 million between April 2018 and May 2025 without adequate explanation. The report describes these as ‘excessive and in many cases unwarranted’, and included payments to police officers retiring since April 2020 (pp.198-209).

The report also alleges that Government of Gibraltar gave an unusually high number of police officers (38) new jobs elsewhere in the public sector during the past six years, all on protected pay and conditions, and most without adequate explanation (pp.126-128). When the Principal Auditor pressed officials for the reasons behind these moves, they could not answer because this information was held by the Chief Minister’s office, who was withholding it (pp.127-128). Mr Sacramento concludes a significant number of these moves were likely linked to the ongoing Commission of Inquiry into the retirement of former Police Commissioner, Ian McGrail (p.128).

The Chief Minister is also accused of obstructing the Principal Auditor from carrying out a review of the Gibraltar Savings Bank’s anti-money laundering processes because ‘such an audit could bring about public loss of confidence in the Gibraltar Savings Bank’ (pp.27-32).

Reading the report gives you a sense of Mr Sacramento’s growing frustration as he edges closer to revelation, only to be blocked time and time again by the Chief Minister, his Chief Secretary to the civil service, and other senior officials in government. This alone is enough to give serious pause for thought, let alone the wider context.

This not the first time Gibraltar’s governance has been under the spotlight. Previously, we have raised concerns about what we saw as the Government’s undue interference into the Commission of Inquiry. In our view, this was a clear red flag that all is not well. Also, it is only recently that the territory succeeded in getting off an international greylist for places of money laundering concern. With these latest revelations, it leaves one thinking: ‘what else don’t know?’

The Principal Auditor’s report outlines several safeguards against future maladministration and misconduct, which all seem eminently reasonable, yet are still being blocked by ministers.

Why, for example, shouldn’t Gibraltar have a Public Accounts Committee? The UK’s finances would be in a poorer state were it not for the likes of Baroness Hodge grilling ministers and officials over the use of taxpayers’ money. The Government’s argument that the territory is too small to have one bears little weight. Despite having a population that’s a third the size of Weston Super Mare’s, it has a budget of over £700 million. If the Falkland Islands – an Overseas Territory of just 3,200 – can have one, then why not the Rock?

Equally, why hasn’t the Government updated audit legislation (pp.246-249) that date back to the 1970s? It has had plenty of time to do so yet made no progress. Instead, it managed to rush through changes to inquiry laws – just as ministers were being subjected to scrutiny from an ongoing one.

And what robust reason is there for denying their auditor general oversight of publicly owned companies (pp.249-250), while simultaneously whittling away at the audit office’s personnel and staffing (pp.251-252)?

When we contacted his office for comment, the Chief Minister challenged vehemently the impartiality and accuracy of Mr Sacramento’s report, claiming it was ‘sensationalist’, aligns ‘almost word for word with the stated positions of the Opposition’ and was published without any attempt to verify its contents with departments. He stated the decision not to establish a Public Accounts Committee was the democratic choice of Gibraltarians, that parliamentary constraints have slowed audit reform, and that ‘the complement of the Audit Office is now HIGHER than under the former administration.’

When asked why he prevented the Principal Auditor from reviewing anti-money laundering processes at the Gibraltar Savings Bank, Mr Picardo said it was ‘outside [the Principal Auditor’s] statutory remit’, and that it undergoes regular audits by PwC. He said the Gibraltar Government was cooperating fully with the Commission of Inquiry, that some of the reasons for transferring police to other government departments were given to Mr Sacramento, and that the claim ‘No.6 Convent Place [Mr Picardo’s office] withheld information is incorrect and UNTRUE’.

The Chief Minister strongly rejected any suggestion these departures from the police force were intended to shield individuals or obstruct the McGrail inquiry.

Despite their often-quiet demeanour, it is the role of auditors to speak truth, including to those in power. It is clear from media briefings and his response to our questions that the Chief Minister has sought to discredit Mr Sacramento for doing so, dismissing him and his recommendations as politically biased and out-of-line. This is a career civil servant, who spent five decades in public office, 37 years of which was spent in the Gibraltar Audit Office with eight as Principal Auditor. If he was a staunch partisan, surely he would have been figured out by now and prevented from taking senior positions?

Though the current furore might pass with the next news cycle, the list of concerns over Gibraltar’s governance grows. Until ministers accept challenge as an essential part of the democratic process, it will likely end up in the press again soon, and for all the wrong reasons.