Tag: discrepancies

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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