Mohamed Ashmalee appointed state minister of finance

Presdent Abdulla Yameen has appointed Mohamed Ashmalee as a state minister for finance and treasury.

The appointment brings the number of ministers to include 16 cabinet members, 5 other appointees at ministerial rank, 32 state ministers and 60 deputy ministers.

Yoosuf Abdul Ghafoor was appointed as the ‎‎state minister for home affairs last week. ‎

The president has also submitted the name of Aishath Zahira to the People’s Majlis for a second term as the ‎deputy governor of the Maldives Monetary Authority, while applications are currently being received for the new post of information commissioner as well as a new member of the Police Integrity Commission.


President cuts ministers’ pay as part of austerity drive

President Abdulla Yameen has informed state ministers that their pay will be cut in accordance with the government’s plans to reduce state expenditure.

Local media has reported that all deputy and state ministers will have their salaries reduced from  MVR35,000 to MVR30,000, and from MVR46,000 to MVR41,000, respectively, reports local media.

“President’s decision comes under the government’s policy to reduce expenses. He plans to do a lot more in this regard,” President’s Office Spokesman Ibrahim Muaz told local media.

The wage reductions represent an average cut of around 12.5 percent for these political appointees – a group whose pay Yameen had pledged to slash by 30-50 percent during the presidential election campaign.

Muaz was not responding to further queries at the time of press.

The President’s Office website currently lists the executive as having 46 deputy ministers, including Abdulla Waheed and Abdul Haleem Abdul Gafoor who were today appointed to the Transport and Finance Ministries, respectively.

The number of state ministers currently stands at 31, with three new ministers – Dr Hala Hameed (Ministry of Health), Hassan Shah (Ministry of Environment and Energy), and Mohamed Anees (Ministry of Transport) – appointed within the past 24 hours.

The potential savings could remove MVR385,000 (US$25,000) from the creaking state budget – submitted to the Majlis this week at a record MVR17.5 billion (US$ 1.1 billion), with a projected deficit of 2.2 percent of GDP.

The rise in total expenditure from MVR16.4 billion to MVR17.5 (US$ 1.1 billion) is mainly due to a MVR 1.1billion (US$72.6million) increase in recurrent expenditure, which continues to account for over 73 percent of the state budget.

In his inauguration speech, Yameen warned the country’s economy was in “a deep pit” and pledged to reduce state expenditure. Local media reports quote Yameen saying he would cut expenditure by amounts varying between MVR 1 billion and 4 billion.

Immediately after being sworn in on November 17, Yameen announced he and his vice president – Dr Mohamed Jameel Ahmed –  would be fulfilling his campaign promise of only taking half of the MVR100,000 (US$6500) salary afforded to the head of state.

“The reason behind this is that Dr Jameel and I both live a simple life. No matter what has been said about us we are not wealthy. We want to be an example to others and lead by example,” Yameen said.

During the election campaign, Yameen also promised reduce the salaries of independent institutions – a step he described as pivotal for the country to avoid a sovereign default.

Following this week’s announcement of next year’s proposed budget, local media reported independent institutions as telling the Majlis budget review committee that the projected cuts would leave it unable to pay salaries.

The reduction in minister’s pay closely follows the release of a World Bank report noting that the Maldives was “spending beyond its means”.

According to the report, an already excessive wage bill ballooned by 55 percent in 2013 due to the Supreme Court ordered back payment of salary cuts, and salary increases for the police and military.

The Maldives has one of the highest percentages of government employees to population of any country in the world, at around 11 percent. During his election campaign, Yameen promised to further increase the salaries of civil servants.

In order to finance the deficit, the World Bank report suggested that the Ministry of Finance and Treasury was undertaking measures that “pose macro risks” and have led to “significant accumulation of debt in a short period of time.”

At present, public debt stands at an “unsustainable” 81 percent of GDP, the report stated. The World Bank projects the debt will rise further to about 96 percent by 2015.

“This debt path is unsustainable and suggests there is little room for additional borrowing,” the report warned.


Illegal, wasteful expenditure flagged in Home Ministry’s audit report

Several instances of illegal and wasteful expenditure were flagged in the audit report of the Ministry of Home Affairs for 2010, made public on Tuesday, including MVR 800,000 (US$51,880) paid to two political appointees who did not attend the ministry.

The audit discovered that two state ministers were paid salaries and benefits from January to December 2010 while one was working at the Presidential Commission and the other at the Maldives Customs Service.

“Although the two posts were created for the Ministry of Home Affairs, as the ministry did not receive any service from the two appointees, this office believes that the President’s Office’s creation of the two posts cannot be considered for the need of the ministry,” the report (Dhivehi) stated, contending that the appointments were in violation of budgetary rules and procedures.

The two political appointees referred to in the report were Sheikh Hussein Rasheed Ahmed, a member of the Presidential Commission and former head of the Adhaalath Party, and Mohamed Aswan, former principal collector of customs.

Among other cases ostensibly in violation of the Public Finance Act and regulations under the law, the Auditor General’s Office noted that none of the construction projects for island and atoll offices as well as regional fire service buildings begun in 2008 were completed on schedule.

According to a status report on the projects prepared in June 2010, while none of the 14 projects were completed on time, the ministry did not seek over MVR6.5 million (US$421,540) in damages for the delays as stipulated in the contracts for 13 of the projects.

The report also found that the Home Ministry failed to include a clause for damages for delays as required by financial regulations in contracts worth MVR1.1 million (US$71,335) and MVR68,500 (US$4,442) respectively to set up partitions and a reception counter in the office.

Consequently, the ministry incurred a loss of MVR189,225 (US$12,271) that it was unable to claim as damages for delays of 51 days and 19 days respectively.

Moreover, as a result of hiring an engineering firm for a monthly pay of MVR4,500 (US$291) for inspection and management of office buildings begun in 2008 by the now-defunct Ministry of Atolls Development, the ministry had to pay over MVR1 million (US$64,850) as a consultancy fee due to delays in completing the inspection work.

The audit also found that four employees of the Parole Unit at the ministry transferred to the Department of Penitentiary and Rehabilitation Services (DPRS) in September 2010 by the Civil Service Commission (CSC) were paid salaries out of the ministry’s budget from September to December 2010 as the DPRS did not have space for the four transferred staff.

In another case highlighted in the report, the ministry paid an owner of an uninhabited island (Haa Alif Dhapparu) MVR5,310 (US$344) in excess of the compensation stipulated in the agreement when the island’s ownership was transferred to the Ministry of Housing and Environment. The island had been under the care of the Home Ministry before it was designated an uninhabited island on August 9, 2010.

The audit report noted that the ministry’s registry of property and assets were not properly maintained in accordance with section 7 of the financial regulations. While some purchases were not entered into the registry, assets transferred from other ministries were similarly unregistered.

As a result of not requiring employees to sign for use of ministry’s mobile phones and laptops, the report noted, six laptops were lost in 2010 while “no employee was held responsible for the losses”.

Lastly, the report found that financial records of monies collected by the ministry were not properly kept. A registry of cash collected was not maintained and receipts were not entered into the daily ledger, leading to discrepancies in the accounts.

Province Offices

The audit of the former Upper North Province Office meanwhile discovered that political appointees paid a living allowances were using government accommodation in Haa Dhaal Kulhudhufushi free of charge. Consequently, the electricity bill for the province office’s accommodation block amounted to MVR105,812 (US$6,861) in 2010.

Moreover, as of July 2011, the electricity bill for the block reached MVR126,022 (US$8,172).

The audit also found that the province office paid MVR156,133 (US$10,125) as docking fees to the Kulhudhufushi Regional Port for an accommodation barge used by Boskalis International, which was contracted by the government to reclaim land in the island.

As the funds were not included in the province office budget and the land reclamation project not carried out through the office, the audit concluded that the expense was in violation of financial regulations.

The report also flagged the hiring of a project consultant for a monthly pay of MVR10,000 (US$648) who had not submitted education certificates. While the province office had claimed that the other candidates did not show up for the interview, the Auditor General’s Office learned that interviews were conducted.

The consultant was appointed a state minister before the contract period expired, the report noted, suggesting that “the announcement for the post was made directly to hire that person.”

Moreover, the audit found that political appointees at the province office did not submit reports of trips out of the island as required by regulations. However, attendance records showed that the staff in question were said to be out of the island on office business.

Meanwhile, the audit of the South Province Office discovered that an individual hired in January 2010 to draw up a strategic development paper in three months was paid a total of MVR154,000 (US$9,987) after illegally extending the contract period beyond the agreed upon three months.

As of July 2010, the audit found, there was no record that the report was ever submitted.

The audit also found that the province office paid for the expenses of a state minister in Male’ for 49 days while there was no record to show any official business conducted during the stay.

Moreover, the expenses for food and accommodation of the south province state minister were significantly higher than the approved rate for government employees.

On July 15, 2010, the audit found, a state minister arranged a dinner worth MVR10,788 (US$699) for 24 people at the Villigilli Resort and Spa while there was no documentation sent from province office to the resort.

“Moreover, while the expenses form was not properly filled, both the form and the approval for the payment voucher were signed by the state minister,” the report stated.

The province office also spent MVR5,088 (US$329) a day for a Defence Minister’s stay at the Villigilli Resort from July 25 to 27, 2010, while there was no documentation at the office explaining the purpose or nature of the trip. Invoiced for the expenses, the Defence Ministry claimed it was not an official visit.

The audit discovered that the province office spent a total of MVR27,580 (US$1,788) to mark the India-Maldives Friendship Week in Addu City while the funds were not included in the office budget and the expenses were not approved by the Finance Ministry.

In the wake of the revelations of the audit, the Anti-Corruption Commission (ACC) Chair Hassan Luthfy told local media today that the commission would discuss the Home Ministry’s audit report at its meeting tomorrow and identify cases to investigate.


President appoints Prinicipal Collector of Customs, three State Ministers

President Mohamed Nasheed yesterday appointed Mohamed Aswan as Minister of State, Principal Collector of Customs.

Aswan replaces former Principal Collector Ilyas Hussain.

In the same day, President Nasheed appointed State Ministers to three regional offices. They were, Mohamed Hunaif as the Minister of State, National Office, Upper North Region; Hussain Irfan Zaki as the Minister of State, National Office, North Central Region; and Ahmed Mujuthaba as the Minister of State, National Office, South Central Region.