Innamaadhoo Council failed to take action to recover outstanding funds: Audit report
An audit report has revealed that the R. Innamaadhoo Island Council failed to take necessary legal action, as mandated by financial regulations, to recover over MVR 600,000 owed in land rent. The Audit Office noted that the council merely issued letters instead of pursuing judicial proceedings to recover the outstanding funds, and has subsequently directed the council to comply with regulations and hold negligent parties accountable.
President Dr. Mohamed Muizzu meets with the R. Innamaadhoo Island Council. | Presidents office
The Auditor General’s Office has stated that R. Innamaadhoo Island Council failed to follow established regulations in its efforts to recover MVR 660,414 owed to the council.
The 2023 compliance audit report for the Raa Atoll Innamaadhoo Council, released by the Auditor General’s Office, noted that Article 5.26 of the State Finance Regulations outlines the mandatory procedures for government offices to recover outstanding funds owed to them.
The regulations stipulate that if payments are not recovered within the initial deadline, a formal notice must be issued to the concerned party granting a seven-day grace period. Should the payment remain outstanding after this timeframe, a final written notice must be served, providing an additional seven days to settle the debt.
The report further stipulated that if payment is not settled within the granted extension, legal proceedings must be initiated in court to recover the outstanding funds.
However, the Auditor General’s Office highlighted that the council secretariat failed to take the necessary actions prescribed by regulations to recover outstanding funds owed to the institution. The audit report noted that according to the council’s financial records, a total of MVR 660,414 was due in land rent for industrial plots by the end of 2023. Despite this, the council had not taken any measures beyond sending letters to certain parties, failing to implement further enforcement actions mandated under the State Finance Regulations.
The Audit Office has urged the Council to recover all outstanding payments—including fees for services rendered, rent for leased properties, and proceeds from sales—within a maximum of one month from the date of completion, as mandated by Article 5.24 (a) of the State Finance Regulations.
Furthermore, it was requested that measures be taken to recover funds owed to the council administration in accordance with Article 5.26 of the State Finance Regulations. The request further stipulated that if payment is not settled after being granted the opportunities provided under the regulations, the matter should be pursued through the courts to recover the outstanding funds.
The Audit Office further stated that the failure to follow proper procedures in recovering the funds is considered an unauthorized act under Section 17.01 of the State Finance Regulations. Consequently, the office noted that the matter must be investigated in accordance with Section 17.03 of the regulations, and if any individuals or parties are found liable, appropriate disciplinary actions must be taken as prescribed in that section.
