SAARC Audit report failed to account for grant aid: MDP

The opposition Maldivian Democratic Party (MDP) has slammed an audit report on the expenses of the 2011 SAARC Summit released recently by the Auditor General, alleging the report was factually inaccurate and had based its findings on erroneous information.

The report (Dhivehi) –  compiled through audits of expenditure by the Ministry of Housing, the Ministry of Foreign Affairs, the President’s Office and the Maldives National Defense Force (MNDF) – revealed several financial discrepancies by then MDP-led government including an overspend of more than MVR 430 million (US$27.9 million) on the event’s allocated budget.

The report claimed that former President Mohamed Nasheed’s government spent MVR 667,874,870.84 (US$ 43.3 million) on the summit – 188.82 percent more than the MVR 231,240,000 (US$14.99 million) budget passed by parliament.

Others inconsistencies included payment of MVR 61.8 million (US$4 million) more the amount agreed for the construction of the Equatorial Convention Centre built for the summit, financial losses incurred by the government, violations of Public Finance Act and Public Finance Regulation and wasteful spending.

The Auditor General in the report also made several recommendations including the recovery of money spent, as well as urging action against those found responsible for the expenses.

Former President Mohamed Nasheed previously dismissed the political bickering by his opponents regarding the findings, contending that his government had not embezzled state funds but admitting it was possible money had been spent contrary to the Public Finance Act.

“Since the ratification of the 2008 constitution, and since the beginning of word to word enforcement of laws that came after the ratification, it is quite possible that there may be certain things carried out in contrast with the public finance act. This is because senior officials of the government wanted things to get done quickly,” Nasheed said at the time.

In a press conference held last Monday evening, MDP government’s Housing Minister Mohamed Aslam slammed the Auditor General over the findings, claiming he had been “negligent” and “irresponsible” in compiling the report.

He said that a state institution releasing such reports ahead of the presidential elections implicating a specific political group was “highly concerning”.

However despite the claims, Auditor General Niyaz Ibrahim has disputed the claim that the timing of the audit report before the election was politically motivated, stating that the information contained in such reports was necessary for people to make informed decisions.

“Some fundamental elements have been disregarded as false information in the report. Some have even been labelled as unlawful [spending]. Other expenses have been presented in a very misleading manner. We have highlighted these issues to the Auditor General in a meeting held today,” Aslam said.

Responding to the Auditor General’s claim that the former government had overspent more than MVR 430 million (US$27.9 million), Aslam said the Indian government had provided grant aid of MVR 267 million (US$17.3 million), the South Korean government had given up to MVR 3 million (US$194,552.53) in grant aid, while an additional MVR 2 million (US$129,701.69) was given from a trust fund.

According to the former Minister, when the grant aid was accounted for the deficit stood at MVR 167 million (US$10.83 million), which had been settled by government’s contingency budget.

“The Auditor General is doing the math and arithmetic without taking these key figures into account. You simply can’t count apples and oranges and decide the total sum of both in apples. We see his findings something similar to counting apples in this manner,” Aslam said.

He also claimed that MVR 64 million (US$4.15 million) spent on building roads in both Addu City and Fuvahmulah was directed to improve the capacity of Southern Utilities Company Limited (SUL) because other companies who proposed to construct the road, including the government’s Maldives Transport and Construction Company (MTCC), were too expensive.

“The Auditor General claimed the government incurred financial losses by giving the project to SUL, and that the Maldives National Defense Force (MNDF) was actively involved in the construction work. And that government had paid SUL for the voluntary work carried out by the military personnel. What we are highlighting here is that if mathematically calculated, the amount spent on the project did not result in financial losses to the government,” Aslam said.

He acknowledged that MNDF officers “had a role” in constructing of the roads, but said that since Nasheed’s ousting in 2012 the work was not being carried out, and therefore there was nothing to pay.

He also questioned as to how the Auditor General came to the conclusion that the MNDF had contributed to 60 percent of the total work carried out to hold the SAARC Summit, stating that there was no justification given for the figure.

MDP MP and Lawyer Ahmed Hamza said he believed a possible reason for the report’s alleged inaccuracy was that the government had withheld certain financial records from the Auditor General, which would otherwise have substantiated the MDP’s account.

Auditor General responds

Responding to the allegations by the MDP, Auditor General Niyaz Ibrahim told local media that the party’s allegations did not carry any weight and that it was “not the fault of the Auditor General if the government did not share certain documents with the auditors”.

“The allegations levelled against the Auditor General’s office do not carry any weight. Our reports are based on information received from government agencies and authorities. Likewise, the report on SAARC summit was compiled in a similar manner,” Niyaz said.

“The [MDP] is alleging that the current government was witholding information from us. We can’t do anything about that. We base our reports based on the  information we receive.”

Niyaz also said that if the MDP were having doubts over the accuracy of the reports – due to government’s failure to share of information – the matter should be raised with the relevant parliamentary oversight committees.

The reason behind allegations made against the audit reports by politicians were, Niyaz said, due to the lack of knowledge regarding how government finances were handled. He also expressed concern over attempts made by politicians to mislead the public.

The Auditor General also claimed that he had not released the reports with the intention to “bombard” a certain political camp, and contested that the mandate of his office was not to attack politicians.

“We execute our responsibilities and try to complete our work as soon as possible to hold governments accountable,” Niyaz said.

“Our job is to hold the government accountable. To ensure that the government strictly follows the law and due procedure in handling the finances of the state. I believe the parliament has a central role in enforcing the recommendations made in the audit reports. We have released almost 200 audit reports. But parliament has only decided to act on just two,” he noted.