Tag: Auditor General Niyaz Ibrahim

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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Parliament approves MVR 57.8 million budget for Auditor General’s Office

Parliament yesterday (November 21) approved 59-2 a MVR 57.8 million (US$3.7 million) budget for the Auditor General’s Office for 2013, MVR14 million (US$907,911) higher than its budget for 2012.

Presenting a Finance Committee report (Dhivehi) on the Auditor General’s Office’s budget, Chair MP Ahmed Nazim explained that parliament was mandated by the audit law to approve an annual budget for the office prior to the submission of the state budget by the Finance Ministry.

A request to increase the Audit Office budget was scrutinised by a sub-committee and approved after a thorough assessment, Nazim said.

Auditor General Niyaz Ibrahim told the committee that the additional funds would be used to hire 43 new staff. The Audit Office presently has 99 staff, including the Auditor General.

As part of its mandate, Niyaz noted that the Audit Office had to audit financial statements from members of the cabinet in addition carrying out annual audits of government offices and other state institutions.

Due to the geographic dispersion of the Maldives, the Audit Office needed to audit over 1,000 offices across the country, Nazim said.

During the debate on the Finance Committee report, most MPs spoke in favour of increasing the Audit Office’s budget and praised the “sincere” and “competent” work of Auditor General Niyaz.

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Parliament spent US$45,400 on food: Auditor General

Parliament spent MVR 700,000 (US$45,400) catering for parliament members and employees for the year 2010, Auditor General Niyaz Ibrahim has revealed.

According to the 2010 audit report of the parliament, there have also been changes made in the agreement with the catering company violating the Finance Act.

The report states that changes to the price cannot be brought after an agreement has been reached in accordance with the Finance Act. The price of catering for parliament was however amended, thus violating the act.

The report states that the parliament paid the company MVR 766,601 to cater meals, and that catering for the meetings held is carried out without ensuring the presence of members and staff.

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Audit of GMR airport deal to be completed in February

Auditor General Niyaz Ibrahim has said that a special audit of the awarding of a concession agreement to develop, manage and operate Ibrahim Nasir International Airport (INIA) to a consortium of Indian infrastructure giant GMR and Malaysian Airports Holding Berhad (MAHB) is currently underway and will be completed in February 2013.

Niyaz told state broadcaster Television Maldives (TVM) yesterday (November 5) that an experienced British auditor was expected to join the team conducting the audit during the first week of December.

“We have completed a large portion of [the audit] with a special team dedicated to it,” Niyaz said. “We have been able to collect almost all the documentation we need and have reviewed them.”

He added that the audit of the bidding process has been completed. “After that, we will carry out a study of the contract and different analyses,” he said.

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Resolution on fuel subsidies for fishermen sent to committee

A resolution (Dhivehi) submitted by Maldivian Democratic Party (MDP) MP Mohamed Rasheed ‘Kubey’ calling on the government to issue without delay MVR 100 million (US$6.4 million) allocated for fuel subsidies to fishermen from the 2012 state budget was sent to committee at yesterday’s sitting of parliament.

The resolution was accepted and sent to the Economic Affairs Committee for further review with 42 votes in favour and five abstentions.

On October 17, parliament’s Finance Committee approved guidelines for the Fisheries Ministry to issue the subsidy directly to fishing boat owners.

However, Auditor General Niyaz Ibrahim then questioned the legality of issuing the subsidy, suggesting that it could be in violation of the Public Finance Act.

Fisheries Minister Ahmed Shafeeu told Sun Online yesterday that legal issues remained to be resolved before releasing the funds.

“We requested the AG [Attorney General] for advice, because subsidies cannot be provided without a [specific] law. The AG said that if it’s identified as a basic right, it can be provided based on the former Supreme Court’s ruling. But it involves legal problems. We are prepared to provide subsidies, we just have to follow the legal procedures,” he was quoted as saying.

Shafeeu said that the subsidies could not be released until the legal issue was resolved but expressed hope that it could be done before November 15, leaving one and a half months for the ministry to release funds to 1,053 vessels registered for the subsidy.

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Auditor General, ACC Chair dismiss Attorney General’s delay allegations over GMR issue

Auditor General Niyaz Ibrahim and Anti-Corruption Commission (ACC) Chair Hassan Luthfy have dismissed claims by Attorney General Azima Shukoor last week that the government was awaiting completion of investigations by the independent institutions before making a decision on annulling the concession agreement with Indian infrastructure giant GMR, to develop and operate the Ibrahim Nasir International Airport (INIA).

“I would like to point out that the Anti-Corruption Commission still hasn’t finished the complete investigation into the GMR matter. This also presents difficulties for us,” Azima said at a press conference last week.

“I have met with the heads of ACC and Auditor General two, three times. I can’t say anything about the investigations. But I haven’t heard back anything after I shared the information I had available with them.”

However, ACC Chair Hassan Luthfy told newspaper Haveeru yesterday that he did not believe that the government was awaiting the completion of the ACC investigation to take action.

Luthfy said that the government had failed to take action on corruption cases investigated by the ACC and forwarded for prosecution.

“Hence in reality this is blaming someone else while failing to undertake their own responsibilities. I do not think that a party [government] who cannot take action over our previous findings on inquiries can take action in this [GMR] case,” Luthfy was quoted as saying.

Luthfy told Minivan News in September that the investigation could “take some time.”

Auditor General Niyaz Ibrahim meanwhile told state broadcaster Television Maldives (TVM) yesterday that he “could not accept” the Attorney General’s claim.

“If the government believes the agreement should be annulled, the government has the discretion or powers to do so,” he said. “The work of the Auditor General’s Office is not part of the government’s decision-making process. If the government made decisions based on what the Auditor General’s Office says, that would compromise the independence of the Auditor General’s Office.”

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Finance Minister to be summoned to committee

Parliament’s Finance Committee decided on Wednesday to summon Finance Minister Abdulla Jihad to the committee before the annual state budget for 2013 is submitted to parliament.

Local daily Haveeru reported last week that members of the public accounts oversight committee decided that the minister should be questioned over MVR 31 million (US$2 million) withheld from the Male’ Health Corporation (MHC), which was reportedly allocated to pay electricity bills for the Indira Gandhi Memorial Hospital (IGMH).

The committee did not however set a date for summoning the minister.

At a meeting of the Government Oversight Committee on Tuesday night, state institutions with overdue electricity bills blamed the Finance Ministry for withholding funds.

The health corporation had the largest unpaid electricity bill with MVR 31 million (US$2 million) owed to the State Electricity Company (STELCO).

STELCO officials informed the Government Oversight Committee that various state institutions owed the government company a total of MVR 174 million (US$11.3 million) in unpaid electricity bills.

Auditor General Niyaz Ibrahim meanwhile told Sun Online last week that the annual budget was submitted to parliament with only three weeks to assess the planned expenditure, which was not enough time to seek expert advise for a comprehensive assessment.

“We believe that the budget should be presented to parliament latest during the first week of October,” Niyaz was quoted as saying.

Niyaz suggesting that passing the budget before the end of December resulted in problems with executing the budget items.

Niyaz also insisted that government projects should only be financed by government revenue.

“The law states that expenses can only be made if they are included in the budget. Anyone who releases funds otherwise, is committing a crime. Legal action should be taken against them. The government will not be responsible for that. It is the person’s fault,” he said.

Niyaz went on to say that he did not agree with the government obtaining loans to pay civil servants’ salaries.

“Loans should be obtained for capital expenses. These problems can only be solved by reducing recurring expenses,” the Auditor General was quoted as saying.

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Auditor General doubts fisheries subsidies could be released

Auditor General Niyaz Ibrahim told local daily Haveeru last week that he doubted whether the government could release MVR 100 million as fuel subsidies for fishermen as decided by parliament’s Finance Committee on October 17.

In an interview with the newspaper, Niyaz questioned the legality of issuing the subsidy, suggesting that it could be in violation of the Public Finance Act.

“If we look at the Finance Act, we have doubts whether these funds could be released. We also have doubts over the strength of the policies set to issue the subsidy. There are question marks over the effectiveness of the subsidy. Questions arise as to why a certain group is benefiting from these funds as subsidy for a period of two months,” Niyaz was quoted as saying.

The Auditor General’s Office was assessing the guidelines approved by the parliamentary committee for issuing the subsidies, Niyaz said, adding that the office has informed the Fisheries Ministry that its recommendations would be submitted to the Finance Committee.

Deputy Minister of Fisheries Ali Solih told local media last week that an announcement inviting applications for the subsidy would be made in the government’s gazette to start issuing subsidies on November 1.

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Auditor General accuses senior officials of negligence in embezzlement of MVR 24 million from DMC

The Auditor General’s Office has accused senior government officials of negligence in the alleged embezzlement of MVR 24 million (US$1.6 million) through the Disaster Management Center (DMC) in 2009 and 2010.

In a presentation to parliament’s Finance Committee on Wednesday, Director General Ibrahim Aimon reportedly revealed that the Auditor General’s Office suspected former State Minister Abdulla Shahid, who was in charge of the DMC at the time, along with DMC Director General Mohamed Shahid and Deputy Director General Moosa Ali Kaleyfan as well as former State Minister for Finance Ahmed Assad and Finance Controller Ahmed Mohamed, were culpable in the scam or guilty of gross negligence.

Auditor General Niyaz Ibrahim told members of the Finance Committee that the negligence of the DMC and Finance Ministry in the embezzlement of funds was “very serious.”

Minivan News is seeking comment from the accused senior officials.

ABCs

On October 11, the Auditor General’s Office made public a special audit report (Dhivehi) of an investigation into misappropriation of MVR 24 million from the DMC, uncovered in the centre’s 2010 audit.

In the 2010 audit of the DMC, auditors discovered that payments were made for “hundreds of invoices from 2005”. As the DMC refused to comply with a request for all documentation relating to the transactions, the report noted that the files were eventually obtained from the Finance Ministry.

In 2005, the report explained, the DMC bought construction material for tsunami-related reconstruction from local businesses with “credit purchase order forms.”

The Finance Ministry paid the bills for credit purchases from the “tsunami recovery fund (TFR).”

A company named Allocate Business Company (ABC) was issued “a large number of purchase orders in 2005,” the report found, noting that the company was about a year-old and was not an importer or seller of construction material.

“Therefore invoices for all the purchase order forms released to ABC were submitted under the names of ‘Apollo Hardware Store’ and ‘Apollo Holdings Pvt Ltd,” the report stated, adding that the payments were made to Apollo in 2005 for the ABC purchase order forms.

The invoices submitted by Apollo Hardware and Apollo Holdings included references to the purchase order forms released to ABC, the report noted.

“Therefore it is believed that these two companies are strongly linked,” the report stated.

The scam

Meanwhile, in 2009 and 2010, ABC submitted over 700 new invoices to seek payments from the state with photocopies of the original purchase orders taken from the Apollo invoices.

The audit found that MVR 24,008,503.75 was paid out for 571 of the invoices.

The Finance Ministry prepared payment vouchers for the DMC and made the payments in four cheques between August 2009 and April 2010.

The fourth and final payment of MVR 13 million (US$843,060) was issued on April 27, 2010 for 193 fraudulent invoices.

While over 700 invoices were sent over by the DMC, the report noted that the Finance Ministry rejected 140 invoices worth over MVR 10 million (US$648,508) after the public accounting system showed that payments had already been made.

“Therefore, this showed that ABC attempted to obtain funds using invoices for which payments had been made [to the company],” the report noted.

“From one perspective, ABC was offered the opportunity to embezzle funds so openly because the company knew of the faulty arrangement between the Disaster Management Centre and and Ministry of Finance for issuing funds and took advantage of it. Or [it is because] the scam was carried out with the collaboration of senior officials of the Disaster Management Centre and Ministry of Finance and Treasury.”

Negligence or involvement of senior officials

The report added that the issuing of funds for forged invoices accepted by the public accounting system “raises serious questions regarding the integrity and capability of those entrusted with spending public funds.”

Moreover, the case demonstrated “extreme irresponsibility” on the part of the public officials, the report stated.

Among the reasons listed for suspecting either involvement or gross negligence of senior government officials, the report noted that as a rule public funds were released only for original documents, whereas the invoices in the DMC case contained photocopies of purchase order forms.

The Auditor General’s Office therefore believed that “this was done deliberately and with a plan rather than out of ignorance or because of mistakes.”

The report also noted that it was highly unlikely that either the state would have held payments owed to a private company without any reason or that the company would have waited four or five years to demand payment with no record of complaint or a court case.

The audit further discovered that officials from the DMC met with the state minister for finance regarding the payments to ABC, “however neither minutes nor any documentation of the discussion was maintained for any of these meetings.”

Moreover, the audit found that the Finance Ministry had rejected some invoices forwarded by the DMC that lacked purchase order forms. However, the audit investigation found that a Director General at the DMC instructed an employee to photocopy purchase order forms and attach the bill to the invoices, which were then sent again to the Finance Ministry.

In conclusion, the Auditor General recommended further investigations by the Anti-Corruption Commission (ACC) and Maldives Police Service (MPS) for prosecuting the directors of ABC Pvt Ltd as well as the culpable government officials.

According to local media reports, police have since arrested two individuals in connection with the ongoing investigation into the DMC scam. Police have however not revealed the identity of the suspects in custody.

At a press briefing on Thursday, parliament’s Finance Committee Chair MP Ahmed Nazim said that the committee has decided to summon Prosecutor General Ahmed Muiz and members of the ACC along with Finance Minister Abdulla Jihad and Finance Controller Ahmed Mohamed next week to discuss measures to prevent corruption and misappropriation of public funds.

Finance Controller Ahmed Mohamed is among the officials named by the Auditor General’s Office at the Finance Committee meeting last week.

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