Maafushi council audit reveals discrepancies, MVR 13 mil difference in records

An audit report from the Auditor General’s Office has revealed significant discrepancies between Maafushi Council’s 2021 financial statement and its actual records.

The report, released on Sunday, highlights a range of financial irregularities within the council's operations during the reviewed year.

The audit notes that while the council reported an annual revenue of MVR 14.2 million in its 2021 financial statement, it did not use the ‘Viya’ accounting module to track its earnings. Instead, the council relied on an Excel-based daily record book, which showed a total revenue of only MVR 1.1 million for the same period.

This MVR 13 million difference between the financial statement and the records has raised concerns about the authenticity of the council’s reported income for 2021.

Additionally, the audit found discrepancies in the council's reported expenditures. The financial statement declared spending MVR 7.2 million, but the ‘Viya’ module recorded only MVR 6.6 million in expenses, leading to a difference of MVR 601,232.

As a result, the Auditor General’s Office could not verify the authenticity of the council's expenditure for the year.

The report also pointed out issues with the council’s cash handling. By the end of 2021, the council claimed to have MVR 10.6 million in cash. However, this figure could not be verified due to the council’s failure to maintain cash funds in accordance with the Public Finance Regulation.

Supporting documents indicated the actual cash amount was MVR 9.9 million, further complicating the verification process.

In addition to these discrepancies, the audit highlighted irregularities in the revenue collected for issuing National ID cards. The council did not manage this revenue according to regulations, and it was not credited to the central government’s accounts, making it difficult to verify whether the council possessed the reported amount.

The audit report also identified several other issues within the council’s financial management, including:

• High volumes of cash held at the council’s safe, which were used for expenses without being deposited into bank.
• Failure to manage bank account balances and prepare bank reconciliations.
• Issues related to revenue collection and the maintenance of financial records.
• Failure to record collected revenues in the council’s daily records.
• Lack of proper records for leased properties.
• Leasing of state assets without valid agreements.
• Inadequate record-keeping of land rents and insufficient efforts to recover owed rents.