Defence Ministry audit reveals MVR6.78 million worth unlawful purchases

The Ministry of Defence and National Security audit report for the year 2011 has revealed that the ministry unlawfully purchased goods worth MVR6.78 million through Maldives National Defence Force’s (MNDF) cooperative society SIFCO.

The report states that MVR4.7 million worth goods were purchased through SIFCO, contrary to article 8.14 of state finance regulation which states that goods and services below MVR25,000 should be purchased only after reviewing proposals from at least three interested parties, and with an official written justification for the choice made.

It also said MVR2 million worth goods were purchased against article 8.15 of the regulation, which states goods and services above MVR25,000 should be purchased through a publicly announced competitive bidding process.

The auditor general (AG) recommended action against responsible persons as per the Public Finance Act

The report also highlighted that MVR1,200,324 was paid to military personnel on leave, particularly to those studying overseas, against relevant rules and regulations.

Salary and allowances worth MVR344,299  was said to have been paid to a defense adviser posted at the Maldivian High Commission in India for days without any record of attending work.

The AG’s opinion given in the report said the ministry’s 2011 budget was not spent within the set limits set, nor was it spent to fulfill the given activities and objectives.

The AG also questioned the validity of financial statements declared by the ministry, stating that the “statement of liabilities” and “statement of assets” declared “does not truthfully reflect” the actual assets and liabilities of the ministry.

The ministry’s figures were MVR39.8 million as assets and MVR29.8 million as liabilities for the year 2011.

The document highlighted that resources donated for the SAARC summit, which can be considered as tangible assets, were were not valued and included in the financial statements, and that special military equipment which could be considered the same were also not included in the statements.

In addition to that MVR122.7 million which should be included in capital expenditure were included as recurrent expenditure (as spent on seminars and meetings).

The final budget for the ministry in 2011 was MVR834 million, of which MVR789.47 million was spent within the year.

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