Tag: finance ministry

Auditor General’s Office to verify disputed figures in finance ministry audit report

The Auditor General’s Office has said it is verifying whether Vimla Construction Pvt Ltd was in fact given an advance payment of MVR 198.1 million (US$12.8 million) in February 2009 as flagged in the finance ministry’s 2011 audit report.

In a press release last week, the Auditor General’s Office said it was in the process of “further checking and verifying” the disputed figure stated in the audit report (Dhivehi) released earlier this month following questions raised in the media over its authenticity.

The case highlighted in the report concerned a large advance payment for delivery of construction materials for a tsunami-related housing project in Gaaf Alif Atoll.

Vimla has claimed in local media that the company received MVR 5 million (US$324,254).

“The audit report did not state that the advance payment to Vimla Construction for the Gaaf Alif housing project was made in violation of the law and regulations,” the press release stressed, adding that the audit office did not make any recommendations concerning the advance payment.

The case was uncovered during auditing of the finance ministry records, the press release added, and the figures were based on information collected from the ministry for its 2011 audit.

Auditors met with senior officials of the finance ministry on February 24, 2013 to verify the figures stated in the audit report and invited feedback from the ministry in a letter sent on March 19, 2013, the press release revealed.

“However, as a result of not receiving comments for the Ministry of Finance and Treasury’s 2011 audit report as of its publication date, this office believes that errors in the figures concerning the cases highlighted in the report are possible,” the Auditor General’s Office conceded.

The press release added that the Auditor General’s Office regretted “any difficulties” or “diminished name or reputation” caused by inaccuracies contained in its audit reports.

The press statement concluded by providing assurances to the public on the professionalism and impartiality of the audits conducted by the office.

The case flagged in the finance ministry’s audit report for 2011 concerned payments made on February 18, 2009 – just over three months after the Maldivian Democratic Party (MDP) administration took office.

However, following the controversial transfer of presidential power on February 7, 2012, President Dr Mohamed Waheed appointed members of then-opposition parties to cabinet and senior government posts.

Current Finance Minister Abdulla Jihad was also the finance minister during the last year of former President Maumoon Abdul Gayoom’s 30-year reign.

Auditor General Niyaz Ibrahim meanwhile told newspaper Haveeru last week that the office has uncovered a number of issues in the tsunami-related reconstruction projects commenced by the Gayoom government in Gaaf Alif atoll.

Niyaz told the local daily that the finance ministry’s audit report for 2011 was published after a long period awaiting comments from the ministry.

“There could be a mistake since they have not said whether there is anything they object to or not,” he was quoted as saying.

Tsunami reconstruction

Niyaz also revealed that the Auditor General’s Office was in the process of completing a special audit of the tsunami reconstruction projects, which would also shed light on the disputed advance payment made to Vimla Construction.

According to the section of the audit report dealing with the advance payment, the “Reconstruction and Development of Gaaf Alif Atoll Project” was to be undertaken with loan assistance from the Saudi Fund.

However, in 2011, the finance ministry spent MVR 17.6 million (US$1.1 million) out of its special budget to transport material needed for the project from the Hithadhoo Regional Port in Addu City to Gaaf Alif atoll.

While Vimla was contracted for the project and given an advance payment, the report explained that a foreign company named Performance Builders was contracted under a “deeds of assignment” on March 25, 2010 to replace Vimla on the project as the local company had been unable to complete the contracted work.

According to local media, the project was eventually awarded to the Maldives Transport and Contracting Company (MTCC) after Performance Builders also failed to complete the work. The government-owned company reportedly faced a loss of MVR 17 million (US$1 million) due to nonpayment.

The case is currently the subject of an inquiry by parliament’s Finance Committee.

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Finance Ministry requests suspension of vehicle domain number sales

The Ministry of Finance has requested authorities cease selling domain numbers for land vehicles pending an investigation into whether funds are being collected through the scheme in accordance to the Public Finance Act, local media has reported.

The suspension of domain numbers, an alternate form of registry for land vehicles, had been taken on advice from the attorney general, Transport Authority Chair Abdul Rasheed Nafiz has told Sun Online.

Nafiz said that a third sale phase for domain numbers was to have originally been announced this week, but had since been suspended due to the Finance Ministry’s request.

Finance Minister Abdulla Jihad had his phone switched off at time of press.

Domain numbers – a condensed, four digit format of vehicle registration – are sold through an online auction with starting prices of MVR 25,000 for cars and MVR 15,000 for motorcycles, according to local media.

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Cancelled agreement to develop IGMH cost US$150,000, reveals audit

The termination of an agreement between the Ministry of Health and Family with Indian company Apollo Hospitals Enterprises to manage and develop the Indira Gandhi Memorial Hospital (IGMH) cost the government US$150,000, the Ministry of Finance and Treasury’s audit report for 2010 has revealed.

The audit report (Dhivehi) made public on Thursday (June 6) flagged an advance payment of US$ 150,000 from the finance ministry’s special budget to Apollo Hospitals as 20 percent of a transition management fee under the “management and development agreement” (MDA) signed on January 23, 2010.

Auditor General Niyaz Ibrahim contended that the payment was made by the finance ministry in violation of budgetary rules and accounting principles, adding that expenses of another office or institution should not be included in the finance ministry’s financial statement.

Moreover, the privatisation of the government hospital was not overseen by the privatisation committee as stipulated in public finance regulations amended in late 2009, the audit report noted.

The secretariat of the privatisation committee, which functioned under the Ministry of Economic Development, informed auditors that interested parties were invited to submit detailed proposals for developing IGMH in a public-private partnership deal in January 2009.

However, none of the detailed bids met the criteria set by the health ministry and the privatisation project was scrapped.

Following a visit by then-President Mohamed Nasheed to India, Health Minister Dr Aminath Jameel told the press on January 25, 2010 that Apollo was awarded the project because none of the bidders fit the criteria.

Apollo was chosen following consultation with the Indian government and based on legal advice, she added.

However, in August 2010, the Male’ Health Services Corporation – which operated IGMH – advised the health ministry against proceeding with the privatisation deal as Apollo’s proposal was not financially feasible for the government-owned health corporation.

On September 30, 2010, the health ministry informed Apollo that the government has decided to scrap the project since the necessary financial capital had not been arranged.

The audit report also noted that a transition management agreement and an operation management agreement that was required under the MDA was not signed in the stipulated 180-day period.

“Therefore, the US$ 150,000 paid to Apollo Hospitals under the MoU [Memorandum of Understanding] signed with IGMH in 2010 was a waste of funds with no benefit to the state,” the audit report stated.

It added that the loss was incurred as a result of “inadequate planning” before hastily signing the MoU without obtaining legal advice, considering the financial burden on the state and determining a source of capital.

The Auditor General recommended asking the Anti-Corruption Commission (ACC) to determine whether any state official abused their authority in awarding the project to Apollo Hospitals without a bidding process.

Other cases

Among eight other cases highlighted in the report where expenses were made ostensibly in violation of public finance law, the audit revealed that in 2007 the government incurred a loss of MVR 30.8 million (US$1.9 million) after paying for 150,000 copies of the Quran Dhivehi translation with numerous errors.

The audit report noted that the project was awarded to Novelty Printers without a bidding process through the tender evaluation board.

Moreover, an advance payment of 85 percent of the contracted amount was made to Novelty Printers in violation of existing regulations, the audit discovered.

In June 2010, the Fiqh Academy decided to destroy the copies printed in 2007 as the errors could not be easily corrected. The decision was made following a year-long review by scholars of the academy.

The audit discovered that the errors in the final version were not present in the proofed copy approved by the President’s Office in 2007 – during the final years of former President Maumoon Abdul Gayoom’s reign – suggesting that Novelty was responsible for the errors.

Novelty Printers wrote to the President’s Office in November 2008 apologising for the printing errors, which they explained occurred due to a problem in the computer file used to make the printing plates.

The audit also discovered that Novelty was paid the remaining 15 percent of the contracted amount in May 2010 after a state minister at the finance ministry approved the payment.

The state minister sent a memo to the budget section falsely claiming that the government had received all 150,000 copies, the audit report noted.

The Auditor General recommended that the ACC should investigate the culpable official for alleged corruption and that the state should either recover the MVR 30 million paid to Novelty or demand 150,000 copies without errors.

The audit report also noted that the government was ordered by the Civil Court in January 2010 to pay US$119,616 as compensation for a former deputy general manager of the Maldives National Shipping Line (MNSL) for unlawful termination in 2002.

The Auditor General recommended legal action against the government officials responsible for incurring the financial loss by unlawfully sacking the MNSL deputy manager in 2002.

The audit further revealed that in 2009 and 2010 the finance ministry paid US$ 4 million to two American companies under a “settlement agreement” while arbitration proceedings were ongoing in Singapore.

In 2006, a consortium formed by the International Medical Group and Sirius International Insurance Corporation was awarded a contract to provide health insurance for government employees.

The companies sought arbitration in Singapore following a contract dispute with the now-defunct Ministry of Higher Education, Employment and Social Security. However, the US$4 million settlement was reached out of arbitration in May 2009 by the new government that took office in November 2008.

The settlement was paid out of the finance ministry’s special budget in 2009 and 2010.

The Auditor General recommended “a thorough investigation” to recover the financial loss incurred by the government as a result of the contract.

The audit report also contended that the finance ministry had not undertaken “adequate efforts” to recover MVR 51.4 million (US$3.3 million) owed to the government as loan repayments as of December 2010.

The loans worth a total of MVR 69.4 million (US$4.5 million) were provided to select individuals by the President’s Office from 1992 to 2006 under special privileges afforded to then-President Gayoom.

The loans were given with a six percent interest rate to be paid back within two to five years, the report found, noting that the repayment period would have lapsed in 2011 for the most recent loans.

However, in a letter sent to the finance ministry on November 6, 2008 – five days before Gayoom left office – the repayment period was extended to five years.

As the loans were given to senior officials of the outgoing government, the audit report contended that the decision to extend the repayment period amounted to corruption.

The Auditor General therefore asked for an investigation by the ACC into the extension and recommended that the finance ministry file court cases to recover the unpaid amounts.

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Finance Minister rejects Family Court’s claim that government is holding child support money

Minister of Finance and Treasury Abdulla Jihad has rejected a statement from the Family Court alleging the ministry is delaying the release of child support money needed by single parents.

The money is paid to the court, which acts as an intermediary between separated parents. Jihad claimed the ministry has now begun to release the payments.

However, Family Court Registrar Ahmed Shafeeu told local media the court has been receiving complaints over delays in receiving the child support payments.

According to Shafeeu, once a parent submits child support money to the court the money is deposited in the state income account. The Finance Ministry is then supposed to return the money to the court, which issues it to the intended recipient.

Shafeeu states that this is under the order of the Finance Ministry, as defined in the Public Finance Act.

“However, I do not believe at all that there is any reason why this money has to be deposited in the state income account,” Shafeeu stated.

“Lots of people who deposit the money, and who are waiting to receive the money, continue to submit complaints about the delay repeatedly,” he said.

He further stated that no solution has been found to date, although discussions on the matter were held with the Finance Ministry three weeks ago.

Currently in cases of divorce among parents, if the mother applies for child support the father is required to provide a monthly contribution of MVR 1000 (US$65) per child.

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Extreme weather compels emergency relief from Maldives’ government

Maldivian government authorities are providing emergency services and relief funds to island communities battered by three weeks of “extreme weather”.

The National Disaster Management Centre (NDMC) issued a statement today (May 15) urging island and atoll councils to report any damage caused by the “harsh weather” as soon as possible.

President Mohamed Waheed Hassan Manik met with officials from the Maldives Police Service, the Maldives National Defence Force (MNDF), the NDMC, and other high-ranking government officials yesterday (May 14) to discuss damages sustained and relief counter measures being taken nationwide.

Waheed provided assurances that government authorities will collaborate with island communities to provide “all the assistance and support needed”. Thus, it was decided state funds will be provided to assist “those islands with maximum damage” through the Ministry of Finance and Treasury’s contingency budget.

State funds will not be released directly to NDMC, instead the Finance Ministry will maintain control of money allocated for relief efforts and “coordinate bills” with the centre, NDMC Project Director Hisan Hassan told Minivan News today.

The exact amount of emergency relief funds will be determined today, Hassan added.

Meanwhile, the MNDF and police have issued precautionary warnings to the public due to the severe weather conditions.

The Coast Guard issued a request yesterday that “all travelers to take necessary precautionary measures before setting on their journeys due to the severe weather with heavy rain and thunderstorms… particularly in the northern and southern regions of the Maldives.”

They recommended travelers test communications sets and obtain updated weather forecasts before embarking on any journeys.

The Coast Guard further stated that average wind speeds of 15-25 miles per hour (mph) in the southern atolls and 7-17 mph are expected in the northern atolls, while wind gusts during thunderstorms will reach 40-50 mph.

Additionally, the police issued an SMS bulletin today also warning the public to “take precautionary measures due to the bad weather”.

A “white bulletin” was also issued by the Maldives Meteorological Service (MET) today, warning that the central atolls can expect average winds speeds of 23-30 mph.

Food shortages and flooding

Thus far damage assessment reports have been submitted by 12 islands from seven atolls – Shaviyani, Meemu, Dhaalu, Thaa, Laamu, Fuvahmulah, and Addu City – representing regions from the far north to the far south of the Maldives, the NDMC told Minivan News today.

Hassan explained that other islands have reported storm-related damage directly to the media or have spoken with the NDMC, but have yet to official report these issues to the centre.

Flooding due to three weeks of severe weather and heavy rain has damaged households, sewerage systems, as well as caused extensive agricultural destruction, according to Hassan.

Food shortages on some islands have resulted from agricultural damage and the disruption of transportation and supply networks due to bad weather.

“All islands import food from Male’, however the seas have been so rough [supply] boats are still in Male’ and unable to reach the islands,” Hassan explained. “Yesterday the State Trading Organisation (STO) announced the they will try to send [food supplies] somehow.”

STO is not providing free food-stuffs to islands, rather they are seeking ways to reach the islands so community shops can restock. Normally, supply boats travel between the atolls at least twice a week, according to Hassan.

“Some small islands’ [residents] are a little afraid to travel to a nearby island [to resupply] because travel is difficult,” he said.

Hassan emphasised that food shortages have not reached “emergency situation” levels.

“For the time being there is no emergency. If an island completely runs out of food, the MNDF is always on board [collaborating] with STO and NDMC, and will send vessels,” said Hassan.

The MNDF and police will deploy and provide first response emergency services, if necessary, he added.

“The MNDF is also assisting with flood relief. They take fire fighting equipment to islands and help pump water,” said Hassan.

“Houses are flooding because they are not built on high platforms, so with one or one and a half feet of flooding, water will rush into homes,” he added.

Hassan emphasised the need for people to “take responsibility” and precautionary measures to ensure their safety in the bad weather conditions.

“They should not wait until flood waters reach knee-high levels and require the MNDF to provide assistance,” Hassan said.

“People should move [their] belongings to higher ground, get rid of old trees and branches, clean their roofs, and collect rainwater in tanks. Also, sandbags should be used to minimise further flooding,” he added.

Ensuring roofs and houses are secure is also essential given the strong winds that have accompanied the recent severe storms.

The NDMC is coordinating with the relevant ministry’s to ensure damages are evaluated and addressed promptly.

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Government undermining decentralised administration, claims LGA vice chair

Vice Chair of the Local Government Authority (LGA) Shujau Hussain has warned that the government’s alleged non-cooperation and failure to provide funds for local councils could “bring the system of decentralised administration to a halt.”

Speaking at a press conference yesterday (April 17), Shujau claimed that the Finance Ministry was withholding funds to atoll and island councils.

“The system coming to a halt will have a big impact on the country’s stability. Politicians should know this. It is not just squabbling among political parties that threatens stability. The day this system comes to a halt is the day this country is plunged into a deep pit,” he said.

Shujau claimed that employees of pre-schools in certain atolls have not been paid salaries for past three months, adding that a solution had not been found after months of meetings with the Finance Ministry and an exchange of official letters.

“The government says they want the system of decentralised administration to function very well. [But] what the finance minister is doing is withholding everything owed to councils,” he claimed.

“This government wants to keep the centralised system in place to govern. So I do not believe that President Waheed’s government is providing any cooperation at all for the system to function.”

Moreover, said Shujau, a number of island council offices have been closed due to lack of funds in the budget to pay utility bills.

Minivan News was awaiting a response from Finance Minister Abdulla Jihad at time of press.

Shujau meanwhile went on to question the government’s “sincerity” in providing support for local government.

The LGA was set up by the landmark Decentralisation Act of 2010 as a parent body tasked with overseeing local councils and coordinating with the government.

Last week, Shujau criticised the Attorney General’s Office for failing to approve 2,000 LGA municipal regulations. He suggested that the lack of approvals demonstrated an unwillingness among the government and President Dr Mohamed Waheed’s cabinet to allow local government mechanisms to function.

In January this year, the government asked the LGA to dissolve the Male’ City Council (MCC), which has an opposition Maldivian Democratic Party (MDP) majority.

The MCC has been involved in a number of disputes with the government during 2012 following February’s controversial transfer of power.

LGA member Ahmed Faisal told local media at the time that the Home Ministry requested the MCC be dissolved following deliberations by the cabinet.

“We have received a letter signed by the Home Minister. But we have not tabled the issue in the agenda yet. And I don’t even believe that the Home Minister could order a council to be dissolved like that. Because there are a lot of things the LGA has to complete before that,” Faisal was quoted as saying.

Faisal accused Home Minister Jameel of requesting the city council be dissolved for “political purposes.”

Faisal also criticised Jameel for allegedly being unaware of the difficulties faced by councils in his role as chair of the LGA. The LGA member stressed that dissolving councils was a long process and that the LGA has not made any decision yet, adding that dissolving the council without addressing difficulties it faced would be “unjust.”

Meanwhile, speaking at a rally last week, former President Mohamed Nasheed claimed that a host of public services has been either disrupted or discontinued following the transfer of presidential power last year.

“Every island that I go to, I see commenced projects unfinished. Harbours have come to stop. Sewerage systems have come to a stop. The change of school sessions to a single session have come to a stop. Aasandha [health insurance] has become a Baisandha [halved]. Transport [networks] have come to halt, everything has stopped. So I think Waheed’s campaign slogan is ‘halted’,” he was quoted as saying.

“President Waheed has neglected the most prosperous one and a half years of this nation. Since my government was changed through a coup, I can only perceive this coup [government] as something that has come to halt.”

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Finance Ministry causes “crisis situation” for Care Society NGO

Lack of government support has caused a “crisis situation” for Care Society, the only institution providing schooling for a diversity of special needs individuals of any age and type of disability.

The Care Society was given a government-owned building in Male’s Heniveru neighborhood with a five-year lease agreement under former President Mohamed Nasheed’s government. The NGO has said it has been seeking a 20-year lease extension from President Waheed Hassan Manik’s government, to no avail.

The lease extension is necessary to secure private funds to rebuild the structure and expand services, but the Care Society has not received a definitive response from the Ministry of Finance and Treasury, despite the Ministry of Housing and Environment granting their approval, Care Society Director Shidhatha Shareef told Minivan News.

“Currently the Care Society works from a private residence donated by a Saudi Prince, but our lease is up at the end of May and we might have to shut down because we have no place to go. It will be a real loss for the children,” stated Shidhatha.

“We have not received any response from the government. The Housing Ministry approved the 20-year lease extension for the new building in writing, but the Finance Ministry has final approval and they still have not provided a definite response. We just want a yes or no answer.”

Shidhatha explained the Care Society has been seeking a “sustainable long term premises” since 2006 and has spent the last four years continually talking to and meeting with government officials. In addition to the Housing and Finance Ministries, they have been in contact with the President’s Office, Vice President Mohamed Waheed Deen, the Human Rights Commission of the Maldives (HRCM), and the National Disability Council.

“When we spoke to Finance Minister Abdulla Jihad about approving the lease extension he said he would ‘work on it’. Additionally, the Vice President Waheed Deen visited the premises and ‘expressed concern’ because the building is so old.

“Meanwhile, the engineers we’ve spoken to said the structure will have to be rebuilt, even the walls are not worth reusing. Care Society has a number of private investors interested in developing the building, however they are not willing to invest if the lease term expires in 2015.

“Ultimately, the government has an obligation to facilitate the process. They are mandated by the constitution and Disability Act to provide educational services to the disabled,” said Shidhatha.

Care Society has been working for the rights of the disabled for 14 years and established the Care Development Centre in 2001, a ‘special school’ for special needs individuals with all sorts of disabilities, including down syndrome, autism, cerebral palsy, physical disabilities, as well as the hearing and vision impaired.

This school provides services for any age, ranging from early intervention programs for one year-olds all the way to elderly individuals.

“Care Society runs the only school that caters to a diversity of special needs disorders and any age group,” Shidhatha explained.

“We work with 600 children and people with disabilities regularly, our school currently has 43 students and another 20 children on the waiting list, however we lack the space to accommodate them at this time,” she added.

Currently there are two government schools, Jamaluddin which only caters to the hearing impaired and Imaduddin which offers classes for the intellectually impaired. The problem is their age limitations, as once students exceed age 18 they are sent out of the school, Shidhatha said.

Additionally, the handful of other NGOs working with the disabled persons in the Maldives only address one type of disability or limit their target group age, Shidhatha added.

Care Society’s objectives include promoting rights of disabled people, rights of children and women, capacity building of CBOs and NGOs and assisting victims of natural disasters.

“Responsibility for ensuring disabled rights first falls on government”: Waheed

The Human Rights Commission of the Maldives (HRCM) began a “National Inquiry on Access to Education for Children with Disabilities” in January 2013.

The study was launched in November 2012 to “look into the practices, policies and laws related to the education for children with disabilities. HRCM will also inquire into the States role in providing for people with disabilities in a non-discriminatory manner, with a special focus on the educational needs of children with disabilities”.

According to the most recent study on the disabled conducted by the HRCM in 2010, there are 2250 children with disabilities in the Maldives that are registered with the government, while only 230 of these children attend school. Overall, 14,100 persons, about 4.7 percent of the population, were found to have permanent disabilities.

In July 2012, the Ministry of Gender, Family and Human Rights and the national Disability Council conferred the Disability Award 2012 to “individuals and organizations working for the rights of the disabled”.

Care Society received an award, which was presented by President Waheed.

Waheed “noted that the responsibility of ensuring the rights of the disabled first falls on the government, and assured that the government was always carrying out that responsibility as best as possible.”

Recent studies by the HRCM – primarily a women’s rights study and children’s participation study – found that lack of access to services were the primary issues discussed by the disabled.

Inadequate special needs schools for children and facilities within existing schools for them, as well as education and mental health service opportunities are of particular concern.

The Finance Ministry, President’s Office, and Housing Ministry were not responding to calls at the time of press.

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Finance Ministry not working to recover funds lost through state incompetence: AG

The Finance Ministry has not been working to recover lost funds from the state, Auditor General Niyaz Ibrahim has alleged.

Speaking to local media, Niyaz said  the state treasury has suffered huge losses due to incompetence from state employees.

Despite audit reports revealing where money has been wrongly spent, Finance Ministry has not been working to recover the funds, Niyaz told local media.

“We are sending a copy of the audit reports from each institution to the Finance Ministry. We recommend the finance ministry to take action against them in which the ministry is involved.

“However there has not been enough work towards taking action against them, especially in the cases where the incompetence of some employees and other loss,” Niyaz was quoted as saying in local newspaper Haveeru.

The Auditor General said that transactions made against the state finance act and violations of travel procedures in government offices were common issues repeated in the audit reports.

Niyaz added that as some offices are repeating these mistakes, there will be a period of three months whereby the offices have to improve prior to an assessment at the end of the time period.

Cases of incompetence or deliberate acts of fraud resulting in losses of state funds are also being submitted to the Anti-Corruption Commission (ACC) by the Auditor General, according to local media.

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Education Ministry warns of student loan shortage

The Education Ministry may be unable to issue loans to 1000 students due to its “significantly lower” budget, Education Minister Dr Asim Ahmed has told local media.

Ahmed emphasised that the Education Ministry would continue to issue loans, while students selected for the loan scheme in 2012 would still receive funds. Only 526 students applied in 2012, reported Haveeru.

The number of student loans available in 2013 remains unclear, as discussions with the Finance Ministry are ongoing. The Education Ministry previously announced loan applications would become available in February.

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