Ambassador to EU illegally paid US$17,000 as allowance in 2011, reveals audit report

The former Maldives Ambassador to the European Union (EU) was paid US$17,000 as a special allowance from September to December 2011 in violation of regulations governing allowances and benefits for employees at diplomatic missions, auditors have revealed.

The audit (Dhivehi) of the Foreign Ministry for 2011 has found that the Maldives embassy in the EU was instructed by Foreign Minister Ahmed Naseem in August 2011 to pay former ambassador Ali Hussain Didi US$3,500 a month as a ‘special representational grant.’

As the allowance was not given to other ambassadors, Auditor General Niyaz Ibrahim recommended recovering the funds from the responsible officials.

The report noted that allowances and benefits for staff at overseas diplomatic missions were specified in regulations enacted by the President’s Office and that the foreign minister did not have the power to authorise such payments.

Auditors also discovered that the former ambassador withdrew the US$3,500 allowance twice in October 2011.

Additionally, €7,566 was deposited to the ambassador’s bank account as a representational grant.

The regulations state that representational grants should be provided as reimbursement once bills of expenses incurred in the performance of diplomatic duties are submitted, the report explained.

However, the report noted that the ambassador did not submit bills for €7,566 worth of expenses.

Former ambassador Didi resigned from the post in July 2012 after 32 years of service.

The audit report also flagged discrepancies between the Foreign Ministry’s annual financial statement and its general ledger at the Finance Ministry, which were not reconciled.

While MVR145 million (US$9 million) was included in the general ledger as bilateral grants, officials at the ministry informed auditors that they were unaware of the inclusion.

Auditors discovered that the Finance Ministry transferred MVR138 million (US$8.9 million) of the grant aid to various state institutions, leaving MVR6.4 million (US$415,045) unaccounted for.

Other cases

The auditor general recommended an investigation by the Anti-Corruption Commission into the hiring of a British national as a senior advisor at the Maldives mission to the EU in March 2010.

Auditors discovered that two employment contracts were signed with the advisor in March 2010 by the foreign minister and state minister respectively, noting that auditors could not confirm which of the two agreements was valid.

While the agreement signed by the foreign minister stipulated that the advisor must be given six months notice before termination of the contract, the agreement signed by the state minister stipulated a four month notice period.

The advisor was paid €25,992 as salary and health insurance for six months when the contract was terminated in June 2011.

Among other cases flagged in the report, auditors found that MVR52,122 (US$3,380) was spent on business class plane tickets for the deputy high commissioner to the UK and his wife to travel to the Maldives in late 2011 in violation of the regulations, which state that only the high commissioner could travel on business class.

A total of MVR64,080 (US$4,155) was meanwhile spent in 2011 to celebrate the ministry’s 78th anniversary in violation of regulations.

The report also noted that the state-owned residence in London – Rosemont Avenue number 10 – had fallen into disrepair as a result of poor maintenance.

While the residence was transferred under the care of the Education Ministry in mid-2011, the report noted that it was not fit for use.

The audit report further revealed that the Maldivian Ambassador to Saudi Arabia as well as the embassy’s counsellor were paid allowances for periods when the pair were away on official trips and vacations.

As 13,957 Saudi riyals and 11,568 Saudi riyals respectively should have been deducted from the allowances in accordance with the regulations, the auditor general recommended recovering the money either from the pair or the officials at the Foreign Ministry responsible for the oversight.

The auditor general also recommended recovering MVR137,676 (US$8,928) spent out of the ministry’s budget to pay mobile phone bills for the foreign minister in 2011 as a phone allowance for ministers had not been approved by parliament.

Moreover, MVR192,416 (US$12,478) was spent to settle mobile phone bills of foreign ministry staff in violation of rules set by the Finance Ministry and Civil Service Commission.

The ministry’s audit report for 2010 had revealed that MVR235,001 (US$15,240) was spent to pay the minister’s phone bills.


Audit reports released in first quarter revealed illegal expenditure worth MVR2.2 billion

Audit reports released in the first quarter of 2014 reveal financial transactions worth MVR2.2 billion (US$142 million) were conducted illegally by state institutions and corporations, according to the quarterly report (Dhivehi) of the audit office made public yesterday (April 29).

In the 14 audit reports released between January and March, the auditor general recommended recovering MVR294 million (US$19 million) from the officials responsible for the illegal expenditure.

These included MVR256.9 million (US$16.6 million) worth of unpaid dividends owed by state-owned corporations, MVR1.2 million (US$77,821) paid out as allowances to soldiers studying in the Maldives and overseas in addition to their basic salary, MVR166,324 (US$10,786) owed by an atoll councillor for residing in the atoll house free of charge, MVR23,927 (US$1,551) spent on plane tickets for a minister, and several millions owed by the Works Corporation.

The 14 reports covered the financial years 2011 and 2012 for a number of government ministries and companies, including the Defence Ministry, Finance Ministry, Civil Aviation Ministry and the Works Corporation.

The quarterly report noted that the auditor general also recommended that the Anti-Corruption Commission (ACC) investigate several cases of alleged corruption and embezzlement flagged in the 14 audits, which uncovered 163 instances of illegal expenditure or violations of public finance regulations.

In an appearance on state broadcaster Television Maldives in January, Auditor General Niyaz Ibrahim asserted that releasing audit reports was “futile” as the accountability process has so far failed.

While the audit office’s role was to conduct audits and review financial statements, Niyaz noted that the office was not legally empowered to file cases at court to recover funds or hold officials accountable for lapses.

Niyaz insisted that there was no political motive behind the timing of damaging audit reports, noting that the audit office adheres to a timetable or schedule shared with a parliamentary committee.

He also assured the public that the audit office was free of undue influence from any state official.


Corruption charges sought against former province minister for unauthorised sports expenses

The Anti-Corruption Commission (ACC) has asked the Prosecutor General’s (PG) Office to press corruption charges against former state minister for the Upper South Province, Umar Jamal, as well as his two deputies for authorising expenses in violation of public finance regulations.

Jamal and his deputies – Mohamed Shareef of Gongali, Gaaf Alif Villigili, and Mohamed Shareef of Fusthulhaage, Gaaf Dhaal Thinadhoo – are accused of abuse of authority to unduly benefit a third party by releasing MVR118,522 (US$7,686) from the province office budget in 2009 and 2010 as financial assistance for sports tournaments and friendly matches.

The ACC investigation was prompted by a complaint alleging that MVR9,000 (US$584) was spent out of the Gaaf Dhaal atoll office budget in April 2010 for a football team from Gaaf Dhaal Gahdhoo to travel to a match.

Moreover, one of the deputies was accused of hiring a boat from Thinadhoo for more than MVR15,000 (US$973) in March 2010 to go to Villigili for a football match.

The commission found that MVR30,764 (US$1,995) in 2009 and MVR87,758 (US$5,691) in 2010 was spent to purchase sports equipment and cover transportation costs for teams to travel between islands for matches.

The expenditure was made out of budget items earmarked for fuel expenses, domestic travel, financial assistance for efforts beneficial to the community, cash prizes from the government, and overtime pay, the ACC found.

The ACC also discovered that MVR780,866 (US$50,640) in excess of the allocated amount was spent in 2009 out of the five budget codes.

The commission noted that public finance regulations prohibit expenses out of the office budget for sports tournaments – even if a state institution was fielding an office team – as well as the purchase of sports items in the absence of a budget item for sports.

“And authorisation should not be given for expenditures that are not specified in the budget,” the press release stated.

Province offices headed by state ministers for home affairs were created under the administration of former President Mohamed Nasheed as part of the ousted Maldivian Democratic Party government’s short-lived policy of dividing the country into seven administrative provinces.

The Upper South Province comprised of Gaaf Alif and Gaaf Dhaal atolls.

The province model was however scrapped from the government-sponsored decentralisation legislation by the then-opposition majority parliament, which passed the bill with the traditional 21 administrative atolls.


Recommendations on 13 cases not implemented by Elections Commission: 2012 audit report

The Elections Commission (EC) has not followed through on recommendations of the Auditor General’s Office by taking corrective measures concerning 13 cases flagged in the commission’s audit reports for 2010 and 2011, according to the EC’s audit report for 2012.

The 2012 audit report (Dhivehi) made public on Thursday (June 27) listed 10 cases from 2011 and three cases from 2010 where the Auditor General’s recommendations to hold the responsible officials accountable for illegal expenses were not implemented.

Among the cases highlighted in the 2011 report were expenditure on overseas trips exceeding approved funds after commission members extended their stays, MVR 334,700 (US$21,705) paid to a company contracted to provide sea transportation during the 2011 local council elections for trips not included in the agreement and awarding a contract worth MVR 4.9 million (US$317,769) to a local company to print ballot papers without going through the tender evaluation board.

The 2011 audit revealed that the cost of the extending the duration of official overseas trips between January 2010 and April 2012 amounted to MVR50,438 (US$3,270) for food, incidentals and pocket money.

Other cases from 2011 included MVR 183,238 (US11,883) spent to hire temporary staff and vehicles during the council elections without formal agreements, not seeking quotations or estimates from three parties as required by regulations for procurements amounting to MVR 251,148 (US$16,287), failure to collect or file court cases to recover MVR 469,500 (US$30,447) owed as fines and deposits and MVR 12,999 (US$843) paid to staff in excess of their salaries and allowances.

The cases from 2010 meanwhile included MVR 248,790 (US$16,134) spent to buy 30 mobile phones for senior staff, 13 mobile phones given to select staff as personal property and a senior staff not returning a mobile phone worth MVR 14,195 (US$920) bought in 2008 when he or she left the commission

“In addition to the 13 mobile phones that were given to employees according to documentation at the commission, the records showed that five mobile phones worth MVR 49,135 (US$3,186) were lost,” the 2011 report stated, adding that no employees were held responsible and “compensation in any form was not sought” for the losses.

The 2012 report noted that of the 15 mobile phones given to staff, five have been returned to the commission while the price of one phone was reimbursed by the staff member.

While letters were sent in October 2012 asking staff to return the other nine phones, the audit report noted that the letters had not been replied to as of the report’s publication.

Moreover, of five phones believed to have been lost, the audit report noted that the EC was informed by staff that two were lost while the remaining three were unaccounted for.

Lastly, on a recommendation to identify how nine laptops were lost and to hold responsible staff accountable, the audit report noted that the EC sent letters to two employees in November 2012 without reply, after which no action was taken.

“On June 10, 2012, one employee to whom a laptop was given returned it to the commission’s stock. No action has been taken to seek compensation for the remaining six laptops,” the report stated.

The 2011 audit report had also revealed that the EC made a number of unnecessary purchases, such as a coffee maker for MVR 67,000 (US$4,345) in 2007, a Nikon D200 camera for MVR 233,298 (US$15,129) in 2008, six TV decoders, 16 TVs, 16 shredders, two washing machines, irons, a deep freezer, a mixer, a blender and a gas cooker.

Of 60 fax machines bought by the commission, 50 were kept unused in storage.

Meanwhile, among the cases flagged from the 2012 audit, the report noted that as of March 2013 the commission had not sought MVR 20,000 (US$1,297) owed by political parties in 2012 as fines for non-submission of annual financial statements.

The report noted that the commission has not taken any action concerning the non-payment of fines in addition to sending letters to the parties on August 5, 2012.

In a second case, the audit found that a director at the commission was given notice of termination of employment starting May 2, 2012. However, as the termination chit stated May 6 instead, “we note that the employee was paid MVR 2,468 as salary and allowances for four days for which the office did not receive the employee’s services.”


Nasheed welcomes scrutiny of MDP government finances, calls for ACC investigations

Former President Mohamed Nasheed has called for investigations by the Anti-Corruption Commission (ACC) into government spending during his administration flagged by the Auditor General’s Office as ostensible violations of the Public Finance Act.

Speaking at a campaign rally in the Henveiru ward of Male’ on Wednesday night (June 19), Nasheed said he accepted the findings of audit reports concerning public finances during the three years of the Maldivian Democratic Party (MDP) government.

“We were the government that first started work with independent institutions in place. We were the government that had the good fortune of having been the target of audits by an independent Auditor General for the first time; and the government that had the opportunity to govern with the oversight of an independent Anti-Corruption Commission,” the MDP presidential candidate said.

“Our purpose, our wish, is for all government funds to be accounted for and for all expenditures to be transparent. I assure all citizens of the Maldives, I will not touch a single cent of your money,” he added.

Nasheed said he was pleased that of the MVR 31 billion (US$2 billion) spent by the MDP government from 2009 to 2011, the Auditor General’s Office only estimated that approximately six percent was “not spent in accordance with public finance regulations.”

“No one has said that [these expenses] involved corrupt dealings or facilitated corruption,” he stressed, calling for investigations by the ACC to determine whether corruption or misappropriation of funds had taken place.

Nasheed said he had studied all the audit reports of government ministries from 2009 to 2011 released by the Auditor General’s Office so far.

“What I want to note is that [expenditure] not being in line with public finance regulations does not mean corruption has taken place or that a criminal offence was committed,” he contended.

The Auditor General’s role was identifying expenditures made in breach of regulations, Nasheed explained, while the financial loss to the state as a result of the ostensibly illegal spending would be determined in light of investigations.

Taking examples of cases highlighted in audit reports, Nasheed referred to the purchase of five cars for government use flagged in the 2011 audit report of the finance ministry.

The audit report noted that a local company was contracted in December 2010 to buy five Nissan Sunny N16 Super Saloon cars for MVR 2.9 million (US$193,904).

However, the company delivered Nissan cars of the Ex Saloon model, the audit found.

“So what we have to find out is whether there was a difference in price between the two brands and which [brand] was cheaper,” Nasheed said.

The case reminded him of the Violet House group in Majeedhiyya School ordering a set of football boots when he was in school, Nasheed said.

“What they received was a set of key chain boots,” he said.

On the Auditor General discovering that the MDP government spent MVR 13.9 million (US$901,426) to train 259 participants of the ‘Hunaru’ skills programme, Nasheed said the programme was brought to a halt after the “coup d’etat” on February 7, 2012 and no further participants were trained despite being enrolled.

The initial spending included capital expenditures for the skills training programme, which targeted leading 8,500 youth to the job market, Nasheed noted.

While the Auditor General’s Office calculated that MVR 50,000 (US$3,242) on average was spent to train a single participant, Nasheed contended that if the programme had concluded successfully, “we estimated at the time that the Hunaru programme could be conducted for about MVR 7,000 or MVR 8,000 per participant.”

On MVR 8.1 million (US$525,291) worth of unpaid bills in the aviation sector owed to the government, Nasheed called on the Auditor General’s Office to forward the case to the ACC for further investigation and to recover the outstanding payments.

“The national administration office of the North [Province] made illegal expenditures for travel [according to the audit report],” Nasheed continued “In this case, if these trips were made in violation of the regulations, we want it to be stopped and for those who do it – even if they were under our government – to receive the just punishment.”

Referring to the Auditor General alleging illegal expenditures for the November 2011 SAARC (South Asian Association for Regional Cooperation) in Addu City, Nasheed said the party wished to determine the nature of the expenses in question.

“I can certainly see the convention center built there, the roads laid in Hithadhoo and the water and sewerage systems as well as the harbour there,” Nasheed said, contending that the costs would not exceed the “concrete work” that was done.

However, he added, if the Auditor General believes there were instances of illegal spending for the SAARC summit, the cases should be properly investigated.

On MVR 168.4 million (US$10.9 million) worth of unpaid expatriate work permit fees owed to the government, Nasheed said the oversight was “worrying” and called for the Prosecutor General’s Office (PGO) to file court cases to recover the outstanding payments.

The former president also took note of the ACC’s recent investigative report that cleared the previous government of corruption in the awarding of a concession agreement to a consortium of Indian infrastructure giant GMR and the Malaysian Airports Holdings Berhard (MAHB) to develop and manage the Ibrahim Nasir International Airport (INIA).

Nasheed said he had rejected requests for meetings by the companies that had submitted proposals for the airport privatisation project as he believed such interaction ahead of the conclusion of the bidding process would not be appropriate.


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.


Deputy Minister paid salary with no record of attendance, Tourism Ministry audit report reveals

A Deputy Minister at the Ministry of Tourism, Arts and Culture was paid salary and allowances from April 2011 to January 2012 with no official records of attendance, the ministry’s audit report for 2011 has revealed.

The audit report (Dhivehi) made public on Tuesday stated that a total of MVR 343,351 (US$22,267) was paid to the senior official for 10 months while there was no documentation to show that he “ever attended either the ministry or any office functioning under the ministry.”

The Auditor General recommended recovering the funds and taking action against the responsible staff at the ministry.

While there was no specific regulation governing attendance of political appointees at the time, the Auditor General contended that paying salaries without attendance records was against “the spirit of the public finance regulations.”

In addition, the audit discovered that the ministry gave a temporary license or authorisation to a private company to operate a tourist hotel at the Laamu atoll Kadhdhoo airport in violation of the Tourism Act.

The audit found that the permission was given despite an inspection report finding that the facility did not meet the criteria for a tourist guesthouse in terms of quality of service.

A tourist hotel is ranked higher than a guesthouse, the audit report noted.

Under articles 4, 18 and 19 of the tourism law, the report explained, a tourist hotel could not be operated on the plot at the regional airport.

The hotel was however operated from May 24, 2011 to December 25, 2011 before official permission or a permanent license was sought, the audit report noted.

Local media reported yesterday (November 28) that the guesthouse or hotel was operated by Heavy Load Maldives, a family business of MP ‘Reeko’ Moosa Manik, chairperson of the formerly ruling Maldivian Democratic Party (MDP).

The Auditor General recommended submitting the case to the Anti-Corruption Commission (ACC) for further investigation.

Minivan News is seeking comment from former Tourism Minister Dr Mariyam Zulfa.

The audit report also noted that temporary authorisation or licenses for operating guesthouses were renewed “some times for over a year” while the facilities did not meet the requisite criteria.

Moreover, registration and licenses were provided to some dive centres and guesthouses without collecting registration and licensing fees.

In other cases highlighted in the report, the audit noted that documentation was not properly maintained for equipment such as camera and mobile phones purchased in 2010.

As a result, equipment provided for use by staff was not recovered when the employees left the office.

In addition, the Tourism Ministry did not maintain a detailed income registry with reference numbers and dates as required by the public finance regulations. The regulations require that the registry must be routinely shared with the Finance Ministry.

“However, inquiries for the Ministry of Tourism’s 2011 audit revealed that such a record [of income] was not prepared and maintained,” the audit report stated. “As a result, we note that it could not be confirmed whether the incomes due to the ministry was received in full.”

Offices and departments under the Tourism Ministry

The audit report noted that the Tourism Ministry’s audit for 2011 was conducted without any documentations or financial records from the Department of Information (DOI) operating under the ministry.

Repeated requests for documents from the department went unheeded, the report stated, adding that the financial statement of the DOI was not provided for the 2010 audit either.

On Monday (November 26), the President’s Office announced that the DOI has been abolished as new institutions formed by the 2008 constitutions carries out the functions previously performed by the department.

“Following this change, registration of media; formulating policies and facilitating the development of local media; creating the official Maldives’ calendar; maintaining the registry of journalists and writers; and, representing the Maldives internationally in the press field will be carried out by the Ministry of Tourism, Arts and Culture. Information to international media on local events will be given by the Ministry of Foreign Affairs,” the President’s Office stated.

Meanwhile, concerning the other offices operating under the ministry, the audit found that employees of the Maldives Tourism Promotion Board (MTPB) were paid overtime salaries in violation of the civil service regulations for calculating overtime.

The audit also noted that clothing allowance was paid to all employees in January 2011 in anticipation of overseas trips to attend tourism fairs. However, the allowance was not recovered from two staff at MTPB who did not travel abroad during the year.

An audit of the National Centre for the Arts (NCA) meanwhile revealed that MVR 24,735 (US$1,604) was spent out of the budget on tickets for a lecturer and his family for a “one-day creative writing workshop” on November 19, 2011.

However, an official agreement was not signed between the lecturer and the NCA and there was no documentation at the centre regarding the workshop.

The NCA also spent MVR 33,000 (US$2,140) during a ten-day period on food for 20 staff working on a “Male’ Art Festival” in excess of the approved rate in the public finance regulations. Catering was also arranged without a public announcement after seeking quotations from only two parties, the audit found.

A total of MVR 19,750 (US$1,280) was spent on catering for seven events organised by the NCA in 2010 without seeking quotations from more than one party.

The catering contract was awarded to a particular party at a rate of MVR 50 per person while the public finance regulations specify a rate of MVR 40 per person.

Aside from a note from NCA and catering bills, the audit report noted that no other documentation for the transactions could be found at the NCA.