Auditor General’s Office has revealed the Male’ Water Crisis Management Fund set up in 2014 was used without establishing a mandate.
The fund was set up following the fire incident which occurred in Male’ Water and Sewerage Company Limited (MWSC) in December 2014, leading to interruption of water services in the capital. The audit report of the fund revealed USD 3.4 million was collected to the fund through bank accounts set up in Bank of Maldives (BML) and Maldives Monetary Authority (MMA). In addition, the report revealed an interest-free loan of USD 4.8 million was provided to the fund by a private organisation, bringing the total amount in the fund to USD 8.2 million.
The audit report further revealed USD 5.6 million was spent from the fund, including USD 702,000 from the donations collected through BML and MMA, while the remaining donations were transferred to the Loan and Capital Works Fund in January 2019. However, the report stated no official mandate was established on how to use the fund, resulting in difficulties to pay off the bills submitted by MWSC to National Disaster Management Authority (NDMA).
Furthermore, the report revealed the fund was not set up in accordance to the Clause 25 of Public Finances Act, while the accounts of the fund were also not properly maintained. The report further revealed MWSC received approximately USD 828,000 more than the finances which were required to overcome the damages from the fire.
Auditor General has requested state institutions to allocate donations received for a specific cause to the State Trust Fund. The auditor general has also instructed state institutions to establish a specific mandate to use such funds, and to avoid using donations for purposes not included in the mandate.