Tag: audit report

Audit report finds HRCM spent Rf133,639 in violation of public finance regulations

The audit report of the Human Rights Commission of the Maldives (HRCM) has revealed that the office has spent a total of Rf133,639 (US$ 8666) in violation of the public finance regulation during 2010.

In the report published on Sunday, Auditor General (AG) Ibrahim Niyaz revealed that the commission spent Rf127,939 on the UNDP project “Collaborating with Civil Society” and Rf5700 on “Strengthening the Administrative Functioning of the Commission” in violation of section 4.01 of the public finance regulation.

According to the report, the money was spent on a reimbursement basis; however the AG noted that it was not repaid till 29 September 2011.

HRCM however informed auditors that the money was deposited to the state’s income account. The Commission also assured the auditors that reimbursement mechanism would be improvised.

The report further reads that the auditors identified several outstanding bills for items and services purchased by the commission in 2010 – which the commission members were unaware of prior to the audit.

Therefore the AG concluded that the internal control system established within the commission to monitor the authenticity of financial statements was “not functioning properly”.

Furthermore, the report noted that a total of Rf44,746, which was stolen from the commission’s safe in 2008, still remains unaccounted for.

The money was stolen without any damage to the safe; hence the two members of the staff who knew the secret code to the safe should take responsibility for the theft, Niyaz claims in the report.

He also told the commission to recover the money from the two staff and reimburse it to the budget.

However, the commission noted that the police investigations had initially revealed that a double key to the safe was in the office key holder and four staff knew the combination to the safe – therefore, the commission could take no action until the negligent or responsible party is found by the police, the commission told the auditors.

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Auditor General report claims Heavy Load project violated state finance regulation

The Auditor General has published an audit report on the Kumundhoo Harbor Project that was contracted to Maldivian Democratic Party (MDP) Chairperson ‘Reeko’ Moosa Manik’s Heavy Load company by the Housing Ministry.

The Auditor General in his report noted that the work was assigned to Heavy Load in violation of article 8.25 of the State Finance Regulation.

‘’Article 8.25 of the Finance Regulation states that any work that costs more than Rf1.5 million (US$100,000) should be assigned to a party by the Tender Evaluation Board in an open bid, and that the interested parties should submit details of the work,’’ Auditor General said in the report. ‘’But the Kumundhoo Harbor Project was not assigned to the party accordingly.’’

According to the report, the project that was supposed to be finished in six months was finished in 31 months, and the government had to pay Rf 22.2 Million for a project originally budgeted at Rf 10.3 million project.

The project was assigned to Heavy Load on 21 November 2007, but the physical work of the project was started on 10 March 2008, according to the audit report.

While the project was going on, Heavy Load reported to the government that there were hard areas that excavators could not dig and the work came to a halt. The ministry then inspected the area and found that the area required explosives to continue the project.

‘’It is to be noted that hard areas can be identified with a diving inspection and that this type of inspection was not done before the work started,’’ the Auditor General said in the report.

The Auditor General’s report said that Rf 4.7 million (US$307,000) was paid to Heavy Load for the days they had to wait without work in return for keeping their equipment and staff on the island, adding that all the days that the party was paid for ‘Idle Time’ could not be considered as such because there was other work the contractor could have been completing.

Heavy Load was paid different rates for the time the company had to wait without work, the Auditor General’s report said. The ministry’s determined rate was Rf23845.77 based on the total amount of the project.

‘’But for the 49 days the contractor had to wait without work from 12 June 2008 to 30 July 2008, Heavy Load was paid Rf27,197.80 per day and for the days between 19 September 2008 and 18 October 2008 the contractor was paid Rf24,299.33,’’ the Audit Report said, adding that the contractor received extra Rf 177,856.17 in total.

The Auditor General also noted that the contractor was given an extra 195 days to complete the project after failing to complete it by the original due date, but after the 195 days only 45 percent of the work was completed.

According to the ‘Appendix to Tender’ agreement made between the ministry and contractor, if the contractor failed to complete the project in the time allocated, the contractor was to be fined 0.1 percent of the total cost of the project for each day.

‘’But after the contractor failed to finish the project, it was given extra five months without any fines,’’ the Audit Report noted. ‘’While the government had paid the contractor Rf 4.7 Million to recover any losses contractor might suffer for idle time, the contractor was not fined for the days the project was delayed due to the contractor’s negligence. The government had not cited the loss for the government and islanders of Kumundhoo, and all the benefit was given to the contractor.’’

The Auditor General also noted that an advance payment was paid to the contractor in violation to the Finance Regulation.

‘’The Finance Regulation article 8.23 states that the highest amount that can be paid in advance is 15 percent of the total cost of the project, but the contractor was paid Rf 5 Million which is 38 percent of the total cost of the project,’’ the Audit Report noted.

The Auditor General’s report said that the Auditor General’s Office did not receive the ‘Defects Liabilities Inspection Report’ done by the ministry.

The contractor was told many times to correct issues and not to continue work without correcting them, but the contractor had not acted as instructed and finished the harbor and handed it to the ministry, and the ministry had fully paid the contractor, the Auditor General noted.

The report also noted that the harbor was completed with a lot of faults, and that huge damages had been caused to some boats that had entered the harbor.

Minivan News attempted to contact Reeko Moosa for comment, but his phone was switched off at time of press.

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Prosecutor General’s Office spent Rf145,596 in violation of Public Finance Act, finds audit report

The audit report of the Prosecutor General’s Office (PGO) for the financial year 2010 has found that the office spent a total of Rf145,596 (US$9,706) in violation of the Public Finance Act.

In the report made public yesterday, Auditor General Ibrahim Niyaz revealed that the PGO spent Rf 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.

In addition, the PGO spent Rf 58,913 (US$3800) out of its 2010 budget to settle outstanding bills from 2009 without requesting the funds from the Finance Ministry in the duration stipulated in the Public Finance Act.

Moreover, the PGO spent Rf45,938 (US$3000) on an official dinner to participants of an e-crime conference participants in June 2010 without a publicly-announced bidding process.

In an issue highlighted in previous audit reports of state institutions for 2010, the Auditor General noted that financial statements were not prepared in accordance with international public sector accounting standards (IPSAS) following principles of “accrual accounting” or the “financial reporting under cash basis of accounting” issued by the IPSAS board.

The PGO however informed auditors that it would discuss the issue with the Finance Ministry to prepare financial statements in accordance with international standards in the future.

Attorney General’s Office

Meanwhile the audit report of the Attorney General’s Office (AGO) published along with the PGO audit report, the Auditor General noted that staff were paid overtime salary for the time spent waiting in a queue to sign out at the fingerprint system at the end of working hours.

The audit report also found that the Attorney General’s Office had not settled bills for services obtained from different parties within the duration stipulated in the public fiance regulations.

The AG Office was meanwhile owed a total of Rf 71,637 (US$4640) from different parties dating from 2009 but had not taken adequate efforts to recover the money, the audit found, adding that the cases had not been filed at court two years on.

A comparatively high amount of money had meanwhile been spent since 2002 for a software installed to maintain records of employees and case files, the audit found, noting that Rf1.5 million (US$100,000) had been spent as of last year to the company that created the software for maintenance fees, upgrades and other expenses.

The AGO informed auditors that the software initially purchased for Rf376,200 (US$24,000) would not be used from next year onward.

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DRP factions clash over use of party logo, resources

The opposition Dhivehi Rayyithunge Party’s (DRP’s) faction loyal to former President Maumoon Abdul boycotted last night’s council meeting, where members from the rival faction expressed concern that the party’s logo and resources were being used without knowledge of either the DRP leadership or secretariat.

An unnamed council member told newspaper Haveeru that the DRP office was being billed for air time bought by members of the Gayoom faction without official approval.

Former Deputy Leader Umar Naseer, who was dismissed from the party in December, however told press today that “any member of the party has the right to use the logo.”

Umar also criticised the DRP council’s decision last night to finalise its 2010 audit report ahead of today’s deadline, claiming that the report makes no mention of the Rf500,000 (US$38,910) outstanding debt the party was ordered to pay Island Aviation by the Civil Court.

Umar claimed further that the audit firm was not given either adequate time to complete the report or proper details of the party’s expenses.

With the internal strife intensifying, MP Ahmed Mahlouf meanwhile told local media that the Gayoom faction was preparing to submit an amendment to article 119 of the Decentralisation Act to ensure that councillors who are dismissed from his or her party shall not be stripped of their seat.

The DRP Youth Wing President claimed that he had learned of schemes by DRP Leader Ahmed Thasmeen Ali’s faction’s to dismiss councillors who did not side with them.

“If we have to, we will seek the [ruling Maldivian Democratic Party’s] MDP’s help with this,” said Mahlouf, suggesting that “Thasmeen faction” MPs would not vote in favour of the amendment.

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