Tag: audit report

HRCM paid food, travel allowance in violation of finance regulation: audit report

The Human Rights Commission of Maldives (HRCM) paid travel and food allowance to employees at a higher rate than specified in the public finance regulations, the commission’s audit report for 2012 has revealed.

The audit report made public on Monday (March 18) explained that amendments were brought to chapter five of the regulations dealing with travel expenses through a circular issued in 2012.

The audit discovered that food and travel allowance paid to HRCM employees for trips within the country on official business was higher than the rates specified in the amended sections 5.09 and 5.19 of the public finance regulations.

In addition, the audit found that the commission outsourced work valued under MVR 25,000 (US$1,621) without signing official agreements with the hired parties as required by section 8.22 of the public finance regulations.

The report also noted that the commission did not seek quotations from three parties as required by the finance regulations for purchases and services valued under MVR 25,000 (US$1,621).

The regulations require state institutions to seek quotations or estimates from at least three parties to select the best offer for purchases, outsourced tasks or services rendered.

Aside from the three issues flagged in the audit, the report stated that the commission’s expenses were in accordance with public finance regulations and the annual budget approved by parliament.

Auditor General Niyaz Ibrahim meanwhile approved and verified the commission’s finance statement for 2012 as authentic.

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Former Home Minister denies responsibility for ministry overspending in 2011

Former Home Minister Hassan Afeef has said he cannot be held answerable for the MVR 1 million (US$66,943) spent in excess of the Home Ministry’s budget in 2011.

The 2011 audit report for the ministry revealed that MVR 1,030,934 was spent in addition to its allocated budget while Afeef was Home Minister.

The auditor general’s report further states that the ministry initiated a number of projects without any announcement – a violation of the Public Finance Regulation, according to local media.

Afeef claimed that while he held his post in 2011 he had no involvement in the ministry’s spending, adding he was “not supposed to be aware” of the matter.

“I was not in charge of the finances, for that we had a financial controller. It is under the finance act that each individual ministry has one, and they deal with the expenditure.

“I cannot be answerable to those things because [the financial controller] has the responsibility for spending the Ministry’s budget,” Afeef told Minivan News.

Asked if he was aware that the ministry had gone over its budget at the time, Afeef added: “I am not supposed to be aware. If there was something I should be aware of, they would make me aware of it.”

The Home Ministry audit report revealed that MVR 86,329 (US$5,605) was spent on the preparation of Dharubaaruge convention centre in Male’, while MVR 75,000 (US$4,870) was spent for a music and boduberu program and MVR 36,225 (US$2,352) allocated towards a sound system for a presidential speech.

The decisions, according to local media, were all made without prior announcement to find a suitable party.

Furthermore, MVR 12,548 (US$814) was spent by the Home Ministry in 2011 to host a Ramadan breakfast for its employees, without authorisation from the Finance Ministry.

Speaking about the expenditures, Afeef stated that there were certain factors that had not been taken into consideration in the budget, adding “if the budget is not enough, they have to spend the money to fund the extra costs.”

The report noted that MVR 64,000 (US$4,155) was spent on ‘attire allowance’ for employees for national day and independence day celebrations.

The audit report also highlighted further discrepancies in expenditures made from the Department of Immigration and Emigration – which at the time functioned under the Home Ministry.

The Controller of Immigration was awarded MVR 26,729 (US$1,735) for his phone bill, while 10 employees from the department were given MVR 48,032 (US$3,118) in excess of their salary. Meanwhile, three employees at the department received MVR 2,392 (US$155) less than their agreed salary, according to local media.

Issues raised in the report on the Department of Penitentiary and Rehabilitation Service (DRPS) show that MVR 617,257 (US$40,081) had been used in contradiction to the shift-duty guidelines declared by the Civil Service Commission.

MVR 56,123 (US$3,644) was awarded to employees in excess of their salary, while MVR 3,473 (US$225) was withheld from two employees who were owed the amount.

Furthermore, contraband confiscated from inmates was not properly recorded. MVR 8,691 (US$564) was also taken from the DPRS safe and left unaccounted.

The auditor general advised that proper action be taken against parties who had violated the regulation.

Investigation into failure to recover misappropriated funds

Parliament’s Public Accounts Committee announced on Monday (February 25) that it intended to investigate the failure by authorities to recover misappropriated funds in previous audit reports.

In the meeting held on Monday, Committee Chairperson MP Ahmed Nazim revealed that the committee intended to send a letter to Attorney General Aishath Azima Shakoor regarding the failure to recover the money.

Majlis Finance Committee member MP Ahmed Hamza told Minivan News that the Public Accounts Committee was still going through the reports and was unable to give an estimate as to how much money is still owed as a result of the misuse of state funds.

The finance committee member said that there were two issues in regard to the failure of recovering misused funds.

“If the government incurs a loss due to the misappropriation of funds, rather than recover the money, the guilty party faces criminal punishment instead.

“Secondly, it is a case of certain members finding it not possible to recover the funds that have been misused,” Hamza added.

When asked whether there had been any effort to recover the money in the past, Hamza stressed that some had been returned, but he was unable to give a rough figure as to how much.

Dhivehi Rayyithunge Party (DRP) MP Visam Ali was reported by local media as saying that government offices do not correct issues relating to how funds are managed, even after repeatedly being advised to do so in audit reports.

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Failure to recover misappropriated state funds to be investigated: Parliament Public Accounts Committee

Parliament’s Public Accounts Committee will investigate the failure of authorities to recover funds highlighted by the auditor general as misappropriated.

In a meeting held on Monday (February 25), Committee Chairperson MP Ahmed Nazim revealed that the committee intended to send a letter to Attorney General Aishath Azima Shakoor regarding the failure to recover the misappropriated funds.

Majlis Finance Committee member MP Ahmed Hamza told Minivan News today (February 26) that the Public Accounts Committee was still going through the reports and was unable to give an estimate as to how much money is still owed as a result of the misuse of state funds.

“We are having to look into past audit reports starting from when they first began under [former President Maumoon Abdul] Gayoom was president. We are not able to scrutinise the spending from any year before audit reports were introduced.

“We have agreed that in order to scrutinise Gayoom’s government accounts, the majority of those looking into them will be held by opposition parties. This will also be the same when [former President Mohamed] Nasheed’s accounts are looked into,” Hamza said.

The finance committee member said that there were two issues in regard to the failure of recovering misused funds.

“If the government incurs a loss due to the misappropriation of funds, rather than recover the money, the guilty party is faced with criminal punishment instead.

“Secondly, it is a case of certain members finding it not possible to recover the funds that had been misused,” Hamza added.

When asked whether there had been any effort to recover the money in the past, Hamza stressed that some had been returned, but he was unable to give a rough figure as to how much.

Dhivehi Rayyithunge Party (DRP) MP Visam Ali was reported by local media as saying that government offices do not correct issues relating to how funds are managed, even after repeatedly being advised to do so in audit reports.

The Attorney General Aishath Azima Shakoor and Head of Majlis Finance Committee and MP Ahmed Nazim were not responding to calls from Minivan News at time of press.

Finance Committee member and Maldivian Democratic Party (MDP) MP Abdul Ghafoor Moosa answered his phone when contacted by Minivan News stating that he was “in a meeting”.

Extravagant spending

Previous reports compiled by the auditor general have uncovered extravagant spending by former Presidents and ministerial officials.

Earlier this year, an audit report for 2010 highlighted 12 instances whereby the President’s Office – under Nasheed’s government – had acted in breach of laws and regulations.

The report noted that in 2010, the President’s Office spent MVR 7,415,960 (US$480,931) over the parliament approved budget for the office.

In addition, the report also highlighted Nasheed’s chartering of an Island Aviation flight from Colombo to Male’ on November 19, 2010. This had cost MVR 146,490 (US$9500).

The audit report states that while all these were paid from state funds, no records were available to prove that Nasheed booked this flight for official purposes.

The report further reveals that President Mohamed Waheed Hassan, then Vice President, had spent MVR 764,121 (US$49,554) on a trip to Malaysia and America with his own family.

Meanwhile, the expenses of Former President Gayoom were leaked last year revealing the excessive spending on Gayoom’s family from money allocated to helping the poor.

Dhivehi Rayyithunge Party (DRP) MP Rozaina Adam leaked the invoices revealing Gayoom’s spending through Twitter in 2012.

In a statement, Rozaina noted that a total of MVR 905,636 (US$58,807) was spent on various items for Gayoom’s family, including MVR 193,209 (US$12,546) on trouser material in 2008.

Auditor General Niyaz Ibrahim told newspaper Haveeru back in October 2012 that the state should recover funds used by former presidents on their families and associates.

Lack of legislation explicitly prohibiting such expenses was not an obstacle to recovering the misappropriated funds, the Auditor General contended.

He noted that there was no law that authorised the use of public funds for personal expenses, adding that assistance from state funds should be provided on an equal and fair basis.

“Even if its Nasheed, Waheed or Maumoon, no one can spend state funds for their own personal use,” Niyaz was quoted as saying.

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President’s Office budget exceeded by MVR 7 million in 2010: audit report

President’s Office spent in spent MVR 7,415,960 (US$480,931) over the parliament approved budget for the office in 2010, according to the auditor general’s office.

The audit report, released on Thursday, focused on the expenses of the President’s Office and the residences of the President and the Vice President.

The report spells out explicitly 12 instances in which the Auditor General believes the President’s Office acted in breach of laws and regulations.

In addition to the excess expenditure of MVR 7 million, the report also highlights then-President Mohamed Nasheed’s chartering of an Island Aviation flight from Colombo to Male’ on November 19, 2010. This had cost MVR 146,490 (US$9500) for the charter itself, together with the ground handling fee of MVR 3,097 (US$ 201) paid to Sri Lankan Airlines, and fuel charges of MVR 11,925 (US$773) paid to Ceylon Petroleum Corporation.

The audit report states that while all these were paid from state funds, no records were available to prove that Nasheed booked this flight for official purposes. It stated that the trip was there considered to have been made for personal reasons and that Nasheed has not yet paid back this amount to the state.

The report also points out that the state had used the special budget of the Ministry of Finance and Treasury to settle payments worth MVR 21.9 million (US$1.4 million) to two foreign companies who were assisting an investigation which was being conducted by the Presidential Commission, understood to be an investigation of the former government’s sale of oil to the Burmese military junta.

Another transaction considered unlawful by the Auditor General’s report was the settling of pending bills dated between 2005 and 2008 submitted by a Malaysian company for the purchase of items for the presidential palace during former President Maumoon Abdul Gayoom’s administration.

Other incidents stated in the report include failure to submit reports on official trips made abroad or documents to highlight achievements made in these trips, hiring consultants outside of recruitment procedure and without specifying their duties, payment of fines levied due to failure to process bill payments by deadlines and incurring additional spending due to lack of timely organising of trips to local atolls.

The report details the amounts spend in the year 2010 on the annual paid vacation of 30 days with their respective families by the President and the Vice President.

Former President Nasheed is said to have spent MVR 446,578 (US$28,961) on a trip to Singapore with family, while  President Mohamed Waheed Hassan, then Vice President, had spent MVR 764,121 (US$49,554) on a trip to Malaysia and America with his own family.

The report calls on the state to put in place policies to govern limits of the amounts that can be spent by the President and Vice President on their annual vacation.

It also points out the lack of documentation to prove that trips made by families of the President or Vice President citing medical purposes were indeed made for those reasons.

The report emphasises that the amounts spent on the President’s official residence had significantly decreased, offering a comparison of the amounts spent since 2007. According to the report, the President’s official residence spent MVR 68.8 million in 2007, MVR 79.7 million in 2008, MVR 42.04 million in 2009 and MVR 27.13 million in 2010.

It cites staff cuts from 313 to 154 personnel, and lower spending on official trips among other reasons for the decreased spending.

Chief of Staff during Nasheed’s administration and current Deputy Chair, Finance, of MDP Ahmed Mausoom was not responding to calls at the time of press. Minivan News was also unable to reach President’s Office Spokesperson Masood Imad.

Read the full report (Dhivehi) here.

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Auditor general alleges several inconsistencies in Ministry of Human Resources 2010 audit report

Auditor General (AG) Niyaz Ibrahim has alleged that several inconsistencies in spending have been identified in the Ministry of Human Resources, Youth and Sports’ 2010 audit report.

The discrepancies highlighted in the report (Dhivehi) include a failure to prepare the ministry’s financial statements in accordance to legal standards, as well as certain spending on a number of projects and events.

Speaking to Minivan News today, former Minister of Human Resources, Youth and Sports Hassan Latheef questioned how complete the AG’s research had been, adding that the documents identified as missing in the audit report would have been available.

Latheef who was in charge of the ministry until the controversial transfer of power in February last year, claimed that the AG’s report was misleading.  Although he did not dismiss the report’s conclusions outright, Latheef maintained that the AG’s findings were incomplete and would have been more accurate if it had consulted with staff working at the ministry during his tenure.

Copies of the AG’s report are to be sent to President Waheed and parliament, as well as other relevant authorities. The AG has also called on to the authorities to investigate the findings of the report and take action against those who are found responsible.

In the report, which was released on Thursday (January 3), the AG’s office stated that it did not believe the Human Resources Ministry had spent its budget in compliance with the Public Finance Act (Act No. 3/2006) and Public Finance Regulation.  The findings therefore included recommendations to reclaim the sum of money believed to have been spent outside of the regulations.

Inconsistencies

Amidst the AG’s findings, the report claimed that the Human Resources Ministry had failed to prepare its financial statement for 2010 as stipulated in the Public Finance Regulation.

“The Ministry of Human Resources, Youth and Sports’ financial statements were not prepared in accordance with the standards set by the International Public Sector Standards (IPSAS) board,” the report stated.

AG Niyaz also alleged that the ministry had failed to recover funds owed to the state by different parties from several outsourced projects, including a project to set up and run a canteen at the Maafannu Cricket Stadium.

The AG claimed that a sum of MVR 487,875 (US$ 31,639.15) was owed to the state as a result of the project, which included rent and fines.  The report added that the Human Resources Ministry had failed to take adequate measures to recover the outstanding sum of money.

In an another claim, the AG alleged that the ministry had failed to recover a sum of MVR 237,000 (US$ 15,369.65) owed to the state as both rent and fines from “Ekuveni Canteen”.  The report recommended the ministry recover money from the parties, calling on authorities to take action against those found to have failed to comply with the laws and regulations.

Illegal transfer of funds

The report also highlighted several cases where funds were transferred by the Human Resources Ministry to projects that the AG claimed were carried out in contradiction to national laws. Included among the highlighted cases was a transfer of MVR 130,000 (US$ 8,430.60) to the Cricket Control Board as a payment for work carried and payment of MVR 14,500 (US$ 940.33) for another company.

The report also raised concerns over sums of MVR 75,000 (US$ 4,863.81) and MVR 50,000 (US$ 3,242.54) transferred to two NGO’s said to have close ties with an unidentified senior ministerial figure. Another issue was a sum of MVR 153,274.80 (US$ 9,940.00) that had been provided to a music band who had not even requested for the money “according to the documents”.

Spending on travel expenses of a parliament member

The AG’s report stated that the Human Resources Ministry budget had also been used to cover an MP’s travel expenses during a trip with then Minister Hassan Latheef to watch the finals of 2010 AFC Challenge Cup held in Sri Lanka.

According to the report, the Ministry spent a total of MVR 15,280.60 (US$ 990.96), which  included a sum of MVR 12,057.60 (US$ 781.95) for pocket money, incidental allowance, accommodation and meals.  The remaining MVR 3,223 (US$ 209.01) was used to cover the MP’s air ticket to watch the football match.

The AG’s office recommended that the ministry bring its budget spending in accordance with the Public Finance Regulations. The report also raised questions as to what capacity the MP had travelled with the minister, as well as the grounds for the government to cover the subsequent travelling expenses.

According to the report, the ministry was advised to retrieve all monies spent by the MP, referring again to measures within public finance laws and regulations.

Former Minister’s response

Responding to the AG’s Office report today, former Human Resources Minister Hassan Latheef said that the MP who travelled with him, as mentioned in the report, was Hamid Abdul Ghafoor of the Maldivian Democratic Party (MDP).  According to Latheef,  Ghafoor – formerly a state minister in the ministry prior to his election to parliament – was accompanying him as a “technical consultant” on the trip.

“Actually it was not just simply a final match. I went there to meet the President of Asian Football Association (AFC) Mohammed bin Hammam. I had sent a letter to Hamid Abdul Ghafoor to accompany me as a technical consultant because I do not possess the technical knowledge of football. So I had requested Ghafoor in official capacity. I even can assure you that a copy of the letter would also be there,” he explained.

Latheef contended that after looking at the numbers, it would be clear that the ministry had spent the minimum required amount for travel expenses and had not intended to “award [MP Ghafoor] a stack of cash”.

“It was neither carried out in a politically motived way nor as a friend. He went as a technical consultant. Now people would ask why Ghafoor was selected. I believe the minister would have the discretion to decide who he would take,” he added.

“This is not something new. For instance, a person who is not even in the government or even in politics went as a chief guest to attend the SAARC Youth Camp held in Addu City in 2011. But it will be our ministry who would be giving his accommodation and travel expenses. How can that be called corruption or politically motivated?”

According to Latheef, the AG had been requested to audit the Human Resources Ministry’s operations back in 2008 shortly after he assumed his position under the government of former President Mohamed Nasheed. According to Latheef, the AG had at the time said that it had already audited the former Employment Ministry and could therefore only look at the youth and sports operations.

“When it was getting delayed, I even sent a letter in 2009 as well asking the AG to audit the ministry” he said.

“I know the AG would only base his report on documents, but if he had asked our collaboration, we would have helped. Things get confusing when you wake up the next morning to see a new government has taken over through a coup. Had we been there when the auditing took place, I am sure the documents which the AG had noted missing would have been found,” he explained.

Amidst other concerns identified in the report, Latheef dismissed claims he had failed to try and retrieve funds spent by the ministry. He added that the ministry, during his tenure, was working on retrieving funds from the said parties and some of the cases were being investigated by police in cases where the ministry had filed for non-payment of rent.

Responding additionally to concerns about providing payment to the band identified in the AG’s findings, Latheef claimed that the report had said it was the responsibility of the National Sports Council to set the procedures for which performers can be paid. Latheef however dismissed the claim, stating that it was the ministry’s responsibility.

“The sports council does not do that. It is the responsibility of the [Human Resources] Ministry.  The Sports Council can set the mechanism on how the sports associations are given money. They don’t have to do that for music bands,” he said.

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ACC to investigate alleged violations of public finance law by Prosecutor General’s Office

Parliament today approved a decision by the Finance Committee to instruct the Anti-Corruption Commission (ACC) to investigate alleged violations of public finance law by the Prosecutor General’s Office (PGO).

The decision was made in a report (Dhivehi) forwarded by the Finance Committee after studying violations of the Public Finance Act and regulations under the law flagged in the PGO audit report for 2010.

Reviewing audit reports and recommending measures to be taken by the relevant authorities is part of the mandate of the public accounts oversight committee.

The Finance Committee decision was approved with 51 votes in favour and two abstentions.

The audit report found that the PG office spent a total of MVR 145,596 (US$9,706) in violation of the Public Finance Act.

Among the cases uncovered in the audit that the ACC was asked to investigate, the PGO was found to have spent MVR 40,745 (US$2640) in additional expenses for interior design after moving to its new offices, without an agreement on price and quality of the work as required by section 8.21 of the public finance regulations.

Moreover, the PGO spent MVR 45,938 (US$3000) on an official dinner to participants of an e-crime conference participants in June 2010 without a publicly-announced bidding process.

The Finance Committee decided to send both cases to the ACC for investigation and inform the PGO to take measures to remedy the matters identified in the audit report.

The committee also decided that the Prosecutor General had breached article 17 and 20 of the constitution on non-discrimination and equality before the law as the office has prosecuted cases where the public finance regulations were similarly violated.

After the committee report was passed at today’s sitting, some MPs contended that Prosecutor General Ahmed Muizz would have to be removed from his post due to the decision.

However, Deputy Speaker Ahmed Nazim – also chair of the Finance Committee – said that Muizz would not be dismissed as the process specified in the constitution had to be followed to remove appointed officials at independent institutions.

Meanwhile, in a press release last week, the PGO said it would “always welcome” investigations by other state institutions into alleged violations of the constitution and laws by the office.

The PGO’s statement also assured that the office would provide “full cooperation” for the investigation.

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Deputy Minister paid salary with no record of attendance, Tourism Ministry audit report reveals

A Deputy Minister at the Ministry of Tourism, Arts and Culture was paid salary and allowances from April 2011 to January 2012 with no official records of attendance, the ministry’s audit report for 2011 has revealed.

The audit report (Dhivehi) made public on Tuesday stated that a total of MVR 343,351 (US$22,267) was paid to the senior official for 10 months while there was no documentation to show that he “ever attended either the ministry or any office functioning under the ministry.”

The Auditor General recommended recovering the funds and taking action against the responsible staff at the ministry.

While there was no specific regulation governing attendance of political appointees at the time, the Auditor General contended that paying salaries without attendance records was against “the spirit of the public finance regulations.”

In addition, the audit discovered that the ministry gave a temporary license or authorisation to a private company to operate a tourist hotel at the Laamu atoll Kadhdhoo airport in violation of the Tourism Act.

The audit found that the permission was given despite an inspection report finding that the facility did not meet the criteria for a tourist guesthouse in terms of quality of service.

A tourist hotel is ranked higher than a guesthouse, the audit report noted.

Under articles 4, 18 and 19 of the tourism law, the report explained, a tourist hotel could not be operated on the plot at the regional airport.

The hotel was however operated from May 24, 2011 to December 25, 2011 before official permission or a permanent license was sought, the audit report noted.

Local media reported yesterday (November 28) that the guesthouse or hotel was operated by Heavy Load Maldives, a family business of MP ‘Reeko’ Moosa Manik, chairperson of the formerly ruling Maldivian Democratic Party (MDP).

The Auditor General recommended submitting the case to the Anti-Corruption Commission (ACC) for further investigation.

Minivan News is seeking comment from former Tourism Minister Dr Mariyam Zulfa.

The audit report also noted that temporary authorisation or licenses for operating guesthouses were renewed “some times for over a year” while the facilities did not meet the requisite criteria.

Moreover, registration and licenses were provided to some dive centres and guesthouses without collecting registration and licensing fees.

In other cases highlighted in the report, the audit noted that documentation was not properly maintained for equipment such as camera and mobile phones purchased in 2010.

As a result, equipment provided for use by staff was not recovered when the employees left the office.

In addition, the Tourism Ministry did not maintain a detailed income registry with reference numbers and dates as required by the public finance regulations. The regulations require that the registry must be routinely shared with the Finance Ministry.

“However, inquiries for the Ministry of Tourism’s 2011 audit revealed that such a record [of income] was not prepared and maintained,” the audit report stated. “As a result, we note that it could not be confirmed whether the incomes due to the ministry was received in full.”

Offices and departments under the Tourism Ministry

The audit report noted that the Tourism Ministry’s audit for 2011 was conducted without any documentations or financial records from the Department of Information (DOI) operating under the ministry.

Repeated requests for documents from the department went unheeded, the report stated, adding that the financial statement of the DOI was not provided for the 2010 audit either.

On Monday (November 26), the President’s Office announced that the DOI has been abolished as new institutions formed by the 2008 constitutions carries out the functions previously performed by the department.

“Following this change, registration of media; formulating policies and facilitating the development of local media; creating the official Maldives’ calendar; maintaining the registry of journalists and writers; and, representing the Maldives internationally in the press field will be carried out by the Ministry of Tourism, Arts and Culture. Information to international media on local events will be given by the Ministry of Foreign Affairs,” the President’s Office stated.

Meanwhile, concerning the other offices operating under the ministry, the audit found that employees of the Maldives Tourism Promotion Board (MTPB) were paid overtime salaries in violation of the civil service regulations for calculating overtime.

The audit also noted that clothing allowance was paid to all employees in January 2011 in anticipation of overseas trips to attend tourism fairs. However, the allowance was not recovered from two staff at MTPB who did not travel abroad during the year.

An audit of the National Centre for the Arts (NCA) meanwhile revealed that MVR 24,735 (US$1,604) was spent out of the budget on tickets for a lecturer and his family for a “one-day creative writing workshop” on November 19, 2011.

However, an official agreement was not signed between the lecturer and the NCA and there was no documentation at the centre regarding the workshop.

The NCA also spent MVR 33,000 (US$2,140) during a ten-day period on food for 20 staff working on a “Male’ Art Festival” in excess of the approved rate in the public finance regulations. Catering was also arranged without a public announcement after seeking quotations from only two parties, the audit found.

A total of MVR 19,750 (US$1,280) was spent on catering for seven events organised by the NCA in 2010 without seeking quotations from more than one party.

The catering contract was awarded to a particular party at a rate of MVR 50 per person while the public finance regulations specify a rate of MVR 40 per person.

Aside from a note from NCA and catering bills, the audit report noted that no other documentation for the transactions could be found at the NCA.

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Large discrepancies in Transport Ministry’s financial records: audit report

Auditors have found large discrepancies between the financial records maintained by the Ministry of Transport and Communication and the general ledger kept by the Ministry of Finance and Treasury.

According to the Transport Ministry’s 2010 audit report, the ministry’s records show that a total of Rf26 million (US$1.7 million) was spent on purchasing  information technology hardware, while the Finance Ministry’s ledger for National Center for Information Technology had no record of the expense.

Meanwhile, income received as Driving Licence Insurance Fee was recorded in the Transport ministry’s books as Rf229,935 (US$14,911) more than the amount stated in the Finance ministry’s ledger while the total income received by the Transport Authority in 2012 was recorded as Rf2.3 million less in the ministry’s ledger.

The latter discrepancy occurred because the ministry had not updated their records with the income generated from ministry’s services provided in the atolls under the Decentralisation Act, the report said.

Furthermore, Rf47 million (US$3 million) allocated to three regional airports in 2010 were recorded as expenses in the ministry’s financial statements, although  auditors found a sum of Rf947,014 (US$61,500) remained unspent in the respective airport’s bank accounts.

Over Rf 600,000 (US$39,000) received as revenue to the Kadhoo Regional Airport between November 2008 and February 2010 was not deposited to the state’s consolidated revenue account, the report added, while  poor management of  airport’s invoices and records made it difficult for auditors to determine how much money is owed to different parties or supposed to be received as income.

Auditor General Ibrahim Niyaz observed in the report that the the ministry had not “identified and reconciled” the aforementioned discrepancies.

The ministry also did not compile its financial statement in accordance with ‘International Public Sector Accounting Standards’ (IPSAS) as stipulated by regulations under the Public Finance Act, and as a result lacked important information such as detailed disclosure notes, Niyaz added.

Therefore, Auditor General refrained from providing an opinion of the ministry’ financial statements and instructed to adjust the figures accordingly to remove discrepancies and compile it in accordance with IPSAS.

The report further noted that the ministry had purchased equipment without the stipulated bidding process and had assigned maintenance of traffic lights to a company prior to signing the contract, thereby violating public finance regulation.

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Audit report finds discrepancies in Economic Development Ministry finances

An audit report of the Ministry of Economic Development for 2010 released this week found large discrepancies between the ministry’s internal records and the general ledger kept by the Ministry of Finance and Treasury.

The report noted that the Economic Development Ministry did not “identify and reconcile” discrepancies of over Rf6 million (US$389,105) in income and Rf8 million (US$518,806) in expenditure between its accounts and the finance ministry ledger.

In a recurring finding of audits of state institutions for 2010 recently completed by the Auditor General’s Office, the report noted that the ministry did not compile its financial statement in accordance with ‘International Public Sector Accounting Standards’ (IPSAS) as stipulated by regulations under the Public Finance Act, and as a result lacked important information such as detailed “disclosure notes”.

The annual financial statement did not specify how Rf1 million (US$63,850) allocated for the trade representative in Geneva was spent, the report stated.

With the exception of five main issues identified for reform, the audit report found that the ministry’s expenditures were “for the most part in accordance with state financial regulations and for projects specified in the budget.”

Among the recommendations were: comply with IPSAS for future financial statements; issue receipts for all cash collections; obtain quotations from at least three parties for procurement ranging between Rf1000 and Rf25,000, invite bids for purchases above the limit and ensure that an employee signs for goods and services; improve inventory and stock maintenance and account for a lost laptop; ensure expenditures are made under the appropriate budget code.

In other findings, the report noted that renovation work on the ministry’s new offices went over budget by Rf179,629 as a result of poor planning and insufficient instruction to the carpenter chosen for the work. Moreover, the same carpenter was employed for the additional work without a public announcement to seek quotations from other parties.

The report also recommended depositing fees and other income collected by the ministry to the state’s consolidated revenue fund in lieu of sending the cash to the Maldives Inland Revenue Authority (MIRA), which incurs a high cost, takes up employees’ time and risks loss of the money during transfer, the report stated.

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