A new audit report released yesterday by the Audit Office has revealed extensive financial and administrative irregularities at the Secretariat of the H.A. Fiyalladhoo Council, citing serious issues in land leasing, procurement, and rent waivers that collectively resulted in losses amounting to approximately MVR 100 million.
The report found that decisions on vehicle procurement, land leasing, and rent exemptions lacked proper procedures and were carried out in ways that benefitted specific parties.
Dump Truck Procurement Violated Stated Requirements
The Council announced that it would procure a dump truck manufactured in 2016 or later, yet accepted a 2010-model vehicle instead. Although 60 percent of the cost, totaling MVR 297,360, has been paid, the vehicle has still not been registered under the Council’s name despite being handed over more than two years ago.
The report further noted that the truck is being operated using a license plate registered to a different council.
Weak Procedures in Leasing Tourism Plots
The audit found that no robust procedures were established when leasing 66 plots for 50 years in the Tourism Village and 14 plots for 25 years in the harbor area for tourism-related developments. Evaluations of submitted proposals were not conducted in a way that ensured maximum benefit to the Council.
The plots also lack electricity service, and the substantial cost required to provide electricity has prevented development work from beginning on all but one plot, even two years after leasing commenced.
Profits Earned Through Resale of Plots
The report states that criteria for evaluating financial capability did not reflect the required scale of investment, and low weighting given to capability criteria enabled parties without sufficient capacity to secure plots. As a result, 19 leased plots were resold to other parties within 2 to 257 days, generating profits totaling MVR 2,395,000.
Conflict of Interest in Rent Waiver Decision
The Council incurred a loss of MVR 30.6 million after extending the rent-free period for tourism land from the three-month waiver stipulated in policy to 24 months. The report noted that this extension benefited certain parties and was made without sufficient justification.
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