Tag: Public Finance Act

Ruling coalition to reverse own restrictions on sale and lease of state property

The government is seeking to reverse restrictions concerning the sale and lease of state properties, that the ruling coalition parties themselves passed while in opposition.

Finance Minister Abdulla Jihad said the government requested parliament amend the Public Finance Act to remove the requirement for parliamentary approval for the sale or lease of any government property.

The controversial amendments to the Act, passed in June 2010 prior to the airport being award to Indian infrastructure giant GMR, sparked the resignation of then-President Mohamed Nasheed’s cabinet over the opposition-majority parliament’s “scorched earth politics”.

Jihad told local media that the request to amend the Act was made as government faced “difficulties” leasing and selling its property, including land, buildings, and infrastructure, as the law currently demanded that such transactions could only proceed after parliament approval.

Speaking to Minivan News, Jihad said he sent the request to parliament’s public finance committee, and that the government would propose the bill to the parliament floor as soon as parliament sessions reconvened.

“We will send the bill as a high priority bill to the parliament as soon as parliament reconvenes. This is a very important bill for the government,” he said.

He also added that it although the government did have an MP representing President Mohamed Waheed Hassan’s party – to present legislation on behalf of the  government – this was not required as the matter was “not a revenue bill”.

Amendments

The amendment concerning the requirement for a prior parliamentary approval was brought to the act on June 2010, by then opposition-controlled parliament.

The amendments were brought to article seven of the Public Finance Act: “any relief, benefit or subsidy by the state” must be given in accordance with laws passed by the parliament.”

The amendment to article 10(a) reads that financial benefits provided by the government in order to pursue its policies must also be issued in line with laws passed by parliament.

However, article 10(c) of the amendment bill states that the government could grant “some financial assistance” from the emergency funds allocated in the state budget under certain circumstances, such as to provide relief after natural disasters.

Meanwhile, 10(d) states that assistance could still be given “if the government believes providing financial assistance to a businessman or a business facing financial difficulties was in the public interest” or if the financial difficulty is believed to impact “the lives of a sufficiently large number of people in society”.

Moreover, article 34(c) stipulates that the government must implement recommendations of the parliamentary committee that reviews the state budget.

The Maldivian Democratic Party (MDP), the ruling party at the time, blasted the opposition claiming that the bill was passed to “obstruct the public private partnership policy of the government.”

Several MDP MPs expressed concern over the move, alleging that the opposition wanted to hinder the running of the government.

Among the concerned parliamentarians, MP Mohamed ‘Colonel’ Nasheed at the time said he regretted the bill had been passed and that he was “very concerned” over its approval.

”All the services the MDP has planned to provide for the people will be disrupted according to this bill,” said Nasheed.

”Right now there is a hung parliament and it is very difficult to bring out sufficient results from it.”

Nasheed said that responsibility for the country’s financial condition was the duty of the President and the Finance Ministry, according to the constitution.

”The bill was not approved in the best interests of the country,” he added. ”I regret the approved amendments [governing privatisation].”

MDP Spokesperson at the time, Ahmed Haleem, also echoed similar concerns claiming the bill was approved “according to the self-interest of two or three businessmen in parliament.”

”This bill will obstruct the public and private partnership policy of the government,” said Haleem. “It was not passed for the benefit of the people of the country.”

However, then main opposition Dhivehi Rayyithunge Party (DRP) dismissed the claims made by MDP.

DRP MP Abdulla Mausoom said at the time that the government was required to govern the country “according to the wishes of its people.”

”The parliament represents the people,” Mausoom said, “and according to the bill, the government will now need the approval of the parliament when leasing state assets or taking loans from other countries.”

Mausoom said the parliament “belongs to the people” and would only make decisions “for the benefit of the people.”

“I do not see any article in the bill that disrupts the government’s pledges,” he said. “Privatising Male’ International Airport was not a pledge of the government.”

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Allegations in audit report “politically motivated, misleading, ill-informed, and anachronistic”: Dr Shaheed

Former Foreign Minister Dr Ahmed Shaheed has said allegations based around a 2010 Ministry of Foreign Affairs audit report claiming he illegally abused expenses are “politically motivated, misleading, ill-informed, and anachronistic.”

The audit report released this week alleged that a senior advisor to the Maldives mission to the UN in New York – hired under a two-year contract on August 30, 2010 when Dr Shaheed was Foreign Minister – left to work for Dr Shaheed in July 2011 upon his appointment as UN Special Rapporteur on Iran.

The report noted that such posts were neither part of the civil service nor considered political appointees, adding that the advisor was hired without a public announcement seeking qualified candidates.

Under the contract, the senior advisor was to receive US$2,672 a month as salary and allowances from September to December 2010 and US$3,672 a month from January 2011 onward.

However, on July 20, 2011, the Foreign Ministry sent a letter to the UN mission, the report noted, informing them that the advisor had been dismissed from the post as she would begin working for the Special Rapporteur on Iran “during the 6-month notice period”.

While approximately Rf800,000 (US$51,880) was spent out of the mission’s budget for salaries and benefits for the senior advisor, the report noted that “no information regarding the work could be seen from official documentation”.

“Misleading”

In an email to Minivan News, Dr Shaheed explained that the senior advisor was a foreign national who was an expert on international relations and diplomacy, slamming the audit report as “politically motivated and phrased to mislead the public.”

Shaheed claimed there would be “ample paper trail on the work she did for the Maldives from August 2010 to July 2011.”

“She was hired on the same basis as other expatriate advisors hired by the Maldives in diplomatic missions, and were political appointees,” he said, adding that the senior advisor resigned in July 2011 despite the audit report claiming the contract was terminated.

While the senior advisor began working for Dr Shaheed “pro bono” in August 2011, “this has nothing to do with the Maldives Mission. She or I have not benefited from any government facilities in our work,” Dr Shaheed insisted.

“It would have been normal for the Maldives government, having nominated me for the post of UN Special Rapporteur to assist me with my work, but this was not done,” he continued.

“If a letter was written by Minister Naseem to the Ambassador in New York to say that the Advisor who was sacked would be working for me, it would have been to indicate to the staff of the Mission that she was sacked immediately, rather than at the end of the 6-month notice period she was entitled to.

“Obviously, the Mission of Maldives in New York will have no record of any work done for me because she was not working in the premises of the Maldives mission, nor as its staff member.”

On the allegation that she was hired without a public announcement, Dr Shaheed said that she was “head hunted and had come in initially to run the campaign for the Human Rights Council which we won with flying colours in May 2010.”

“It as on this basis that she was hired in August, effectively in a bid to keep her from competitive offers of another diplomatic mission in New York. Advisors are not civil servants and are therefore political posts. A contract had to signed to meet with legal requirements of the United States,” he added.

On Rf235,001 (US$15,240) spent out of the office budget to pay the Foreign Minister’s mobile phone bill in 2010, despite parliament not having approved such an allowance for ministers, Dr Shaheed noted that the audit report referred to regulations passed by parliament on December 28, 2010, “two weeks after I resigned from office.”

“The old practice was for the government to pay the mobile phones of ministers,” he added.

Dr Shaheed served as foreign minister in former President Mohamed Nasheed’s administration from November 11, 2008 to December 12, 2010, when he resigned after not receiving parliament’s consent for his reappointment following the en masse cabinet resignation in July 2010.

Violations of public finance law

The Foreign Ministry’s 2010 audit report meanwhile highlighted 48 cases of alleged violations of the Public Finance Act and regulations under the law.

Among the issues raised in the report were discrepancies between the ministry’s financial statement and the Finance Ministry ledger; hiring of interns for the ministry and foreign missions without public announcements, including children and relatives of senior government officials; lack of details on Rf85.5 million (US$5.5 million) spent on foreign missions in 2010; incurring a fine of Rf28,862 (US$1,871) for unpaid utility bills; lack of “necessary internal controls” in accordance with public finance regulations on the ministry’s expenditures; and failure to properly maintain income records and stock inventories.

In April 2011, the report revealed, the Maldives embassy in China used approximately Rf600,000 (US$38,910) of free aid granted by the China Machinery Engineering Corporation (CMEC) to purchase a “Hyundai Santa Fe” vehicle with an additional Rf100,000 (US$6,485) from the embassy budget.

Moreover, in June 2011, the embassy in China sold a car registered to it without prior approval and has not deposited the proceeds from the sale to the state’s revenue account as of the report’s publication date.

The audit also discovered that the ministry spent in excess of the approved accommodation, travel and utility allowances for senior staff at foreign missions.

Furthermore, a total of Rf494,293 (US$32,055) was spent on mobile phone bills for senior staff at the ministry although it could not be determined whether all calls made from the 13 post-paid lines were for official purposes.

As some employees used roaming services on overseas trips, the report noted, phone bills reached over Rf30,000 (US$1,945) in some months.

“Therefore, [the Auditor General’s Office] believes that this is an opportunity to misuse state funds without any control,” the report stated.

Addressing the irregularities raised in the audit, Dr Shaheed meanwhile argued that “some of the assumptions and conclusions are clearly false.”

“The report also fails to note or establish lines of financial accountability, unfairly exposing civil servants and politicians to unwarranted and malicious attacks on their reputation and integrity,” he said. “However, the report does identify a number of systemic deficits that need to be addressed too, and which do not result from lack of integrity of the persons involved,  and I am happy that a number of those matters have been highlighted.”

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MNBC investigated for suspicious transactions

Maldives National Broadcasting Corporation (MNBC) is being investigated by Parliament for transactions that allegedly transgress the Public Finance Act.

Villufushi MP Riyaz Rasheed, Eydhafushi MP Ahmed ‘Red Wave’ Saleem, Alifushi MP Mohamed Nashiz and Nolhivaram MP Mohamed ‘Colonel’ Nasheed have been appointed to lead a sub-committee of the parliamentary Finance Committee and carry out the investigation, reports Haveeru.

A letter has been sent to MNBC requesting relevant information.

Details of the alleged transactions are unknown.

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Mountain, Mountain, Come to Mohamed!: Ibra’s Blog

The amendments to the Maldives Public Finance Act were ‘the Grand Finale in the process of decimating the Executive, once and for all’, according to the latest update on Ibra’s Blog.

Ibrahim Ismail, one-time member of the Majlis for Male during the presidency of Maumoon Gayyoom, was an early supporter of democratic reform.

His blog analyses the cultural, legal and political dimensions of reform in Maldives.

“With the change in government, there was trepidation among many that there may be a witch hunt to bring criminals within the former regime to justice. The relative security of the Majlis was sought by many, and some succeeded. After the initial scrambling for personal security, some were emboldened…”

Read more

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