Audit uncovers discrepancies in tourism ministry’s financial records

The tourism ministry’s audit report for 2013 has revealed discrepancies amounting to more than MVR300,000 (US$19,400) in the records of income collected from the billion-dollar Maldivian tourism industry.

The audit found discrepancies between the ministry’s income registry and daily and monthly reports in 2013. While the registry showed that MVR1 million (US$64,850) was collected as lease transfer and sub-lease transfer fees, only MVR771,000 (US$50,000) and MVR842,450 (US$54,600) were stated, respectively, in the daily and monthly income records.

Similar inconsistencies were discovered in the daily and monthly records for guest house registration fees, mortgage registration fees, cruising permits, tour guide pass registration fees and vehicle and vessel registration fees.

As a result, the Auditor General’s office said it could not verify whether the MVR8.6 million (US$557,700) recorded as income by the ministry in 2013 was an accurate figure. The report did not either specify possible reasons for the financial discrepancies or implicate ministry officials in misappropriation of funds.

Then-Tourism Minister Ahmed Adeeb is meanwhile on trial in connection with the theft of nearly US$80 million from the state-owned tourism promotion company – a corruption scandal of unprecedented scale in Maldivian history.

A damning special audit of the Maldives Marketing and Public Relations Corporation released last month revealed that some US$65.01 million collected as acquisition costs from leasing islands, lagoons and plots of land for tourism was siphoned off into private bank accounts.

Adeeb was appointed to the cabinet in February 2012 shortly after then-Vice President Dr Mohamed Waheed assumed the presidency. Adeeb retained the post following the election of President Abdulla Yameen in November 2013.

Abdulla Ziyath – former managing director of the MMPRC and brother of Auditor General Hassan Ziyath – is also on trial on multiple counts of corruption and abuse of authority. Lease payments were deposited to private account after Ziyath signed and endorsed cheques made out to the MMPRC.

The tourism ministry audit report went on to note that the ministry did not properly maintain financial records or reconcile its income for 2013. It highlighted the ministry’s failure to prepare financial statements in accordance with the International Public Sector Accounting Standard as well as the public financing regulations.

The audit office also expressed concern with the ministry’s failure to deposit income in the public bank account in a timely manner. The ministry took an average of 6.6 days to deposit 60 separate payments checks throughout the year, the audit found.

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 at the latest.

Auditors found that the funds were kept in a safe at the ministry: “Storing the money without depositing opens up opportunities for the money to be lost, misused or stolen.”

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 IPSAS procedures and international best practices.

The ministry was also in breach of chapter 12 of the public finance regulations with its failure to include financial statements from departments under its mandate, including the department of heritage, the national bureau of classification, the national centre for the arts, and the national library.

The heritage department had purchased items worth MVR36,395 (US$2.360) without seeking quotations from three separate parties as required by the public finance rules.

The department had also bought flight tickets to Laamu atoll for eight people and purchased a camera worth MVR22,900 (US$1,485) without obtaining written permission from senior officials as stipulated in the public financial regulations.

While records showed that the department received  MVR400,580 (US$25,970) from the sale of the tickets to the national museum, the audit found that only MVR357,402 (US$23,177) was deposited into the public bank account.