Audit exposes corruption at National Center for Information Technology

A special audit of the National Center for Information Technology has revealed corrupt bidding practices in three projects worth over MVR90 million (US$5.8 million).

The NCIT violated public finance regulations in the three projects carried out between 2016 and 2018, according to the audit report published this week. 

All three projects were awarded to Maxcom Technologies. The audit implicated former state minister for finance Mohamed Ashmalee in awarding one of the projects without a competitive bidding process.

Ashmalee, a senior member of the former ruling party, was in charge of NCIT during the previous administration.

The audit was carried out at the request of Science, Communication and Technology Minister Mohamed Maleeh Jamal. The findings are now being reviewed by the Anti-Corruption Commission, the watchdog’s spokesman told the Maldives Independent. 

According to the audit, an MVR3 million project to buy an uninterrupted power supply system for the national data center was awarded without a bidding process in November 2017. It was awarded through an emergency procurement process with the approval of the finance ministry, which was carried out solely by a state minister in charge of NCIT without any input from NCIT’s procurement department, the audit revealed.

The company was paid half of the project’s cost in advance. But public finance regulations only allows 15 percent as advance payments unless in exceptional circumstances concerning emergencies or national security. The reason for early payment was not explained, the audit noted.

The rest of the payment was made after the UPS systems were supplied but before the company installed them. Payment cheques were signed by the state minister but he did not have the authority to authorise payments on behalf of NCIT, the audit found.

An MVR89 million project to supply and implement Microsoft software licenses and provide training was awarded to the same company in July 2016. 

But officials from both the company and its Sri Lankan software supplier were allowed to sit in pre-bid meetings held in February 2016. They took part to “discuss and plan how to carry out the project,” the report stated.

The involvement of a potential bidder in designing the bid was contrary to “competitive tendering processes,” leads to creating the bid in a manner that favours the interests of the company, and offers the company an unfair advantage, the audit said.

Other issues flagged with the project included the lack of a clear schedule for finishing all components despite having a five-year payment schedule. Annual payments were to be made for supplying 20 percent of licenses every year and carrying out training. But there were no details on payment for the third component of the project, which was designing a plan to implement software licenses.

Some 8,305 different software licenses were supplied as of 2018 but only half of these were used. The auditors advised to decide on how to use the licenses before they expired. 

As of 2018, MVR50 million of the total MVR89 million was disbursed to the company.

The report also noted complaints by the Sri lankan software supplier over delays in payment from Maxcom. In December 2018, the supplier threatened to revoke the Microsoft reseller status and blacklist the company. The supplier informed the ministry that the payments were finally made in February 2019.

A third project to provide hardware worth MVR4.4 million was awarded to the same company in 2018. Maxcom was the only company to bid for the project but the bid was not announced again as required by public finance regulations in cases where there was a sole bidder.

The same company worked as a consultant to formulate hardware specifications. The audit flagged a conflict of interest as the company bidding for the project had also designed the requirements of the project.

The company took 85 days to complete despite being required to finish in 45 days. The audit noted that the NCIT failed to exact fines of MVR658,101 for the delay.