Fresh corruption allegations raised in 2014 tourism ministry audit

The audit report of the tourism ministry for 2014 has raised fresh allegations of corruption over the lease of islands and lagoons for resort development during the tenure of former Tourism Minister Ahmed Adeeb.

The audit found that the ministry failed to collect more than US$35,000 owed as lease transfer fees from five islands and two lagoons as well as MVR40,000 (US$2,590) as lease mortgage fees from four islands.

However, the ministry provided services for the companies that leased the islands despite the non-payment of fees.

Several of the islands were flagged last February in a special audit that exposed the theft of US$79 million from the state-owned Maldives Marketing and Public Relations Corporation, a corruption scandal of unprecedented scale in Maldivian history.

Adeeb, who went on to become vice president, has been jailed for 33 years on charges of terrorism and corruption. He is also facing more than 50 counts of graft over US$65 million collected as acquisition costs by the MMPRC that was funnelled to private bank accounts.

According to the tourism ministry’s audit report, lease transfer fees were not collected for the Mathiveri Finolhu, a lagoon that the MMPRC’s former managing director, Abdulla Ziyath, is alleged to have swapped for a house in Malé’s suburb.

Lease transfer fees were also unpaid for the island of Maagau in Dhaalu atoll. In September, an Al Jazeera corruption exposé outlined how US$2.5 million for the island was paid by two Italian businessmen to a company linked to Adeeb.

The report released on Monday noted with concern that the tourism ministry used Microsoft Excel to maintain records of payments, which leaves no audit trail to detect changes as receipts could be easily edited or reprinted.

As a result, the Auditor General’s office said it could not verify whether the MVR7.6 million (US$492,866) recorded as income by the ministry in 2014 was accurate. Auditors were also unable to determine whether the ministry was owed more than it collected in the year.

Additionally, several receipts from regional airports, which operates under the tourism ministry, did not have a date, stamp or a signature.

“If the security of the systems used to accept and record cash payments are not complete, and if the design of the system allows records to be edited so easily, it makes it possible for misuse of state money, and for the state to face a financial loss,” the report stated.

The audit office also expressed concern with the ministry’s failure to deposit income in the public bank account in a timely manner.

A total of US$50,000 collected by the ministry from 19 bills, and MVR129,742 (US$8,400) received by the regional airports from two bills were only deposited into the public bank account after seven days, the report said.

The Public Finance Act mandates ministries and state institutions to deposit payments either on the day it is received or on the next working day.

Both the ministry and regional airports also failed to properly maintain records of money kept in the office safe. The same issue was flagged in an audit of the ministry for 2013.

When the auditors checked the safe at the ministry, the state’s cash and the cash belonging to the staff who maintained the safe were both kept in the staff’s desk drawer, the report said.

Other issues flagged in the report include the ministry’s failure to maintain an inventory of property and assets as well as failure to submit financial statements in accordance with international best practices.

The public finance regulations and IPSAS procedures require offices to record expenses when the transaction is done, but the audit found that the tourism ministry recorded some expenses before the transactions were completed because the expenses were recorded when it is posted on the Public Accounting System.

As a result, financial transactions in 2014 included over MVR2.8 million (US$181,582) vouchers posted in 2013. These expenses were, however, not included in the financial statements of the year 2014.

Transactions for MVR30,514 worth of vouchers posted in 2014 were also carried out in 2015 and included in the financial statements.

Despite the public finance law allowing spending from the annual budget after the year is over, the report noted that the practice is against cash basis accounting procedures.