Over MVR 200,000 in land rent owed to Kolhufushi Council remains uncollected: Audit Report

The Auditor General’s Office has stated that more than MVR 200,000 in land lease revenue owed to the M. Kolhufushi Council remains unaccounted for due to the failure to include applicable late payment fines.

The Auditor General’s Office, in its 2024 compliance audit report for the Kolhufushi Island Council, noted that the information sheet for a land lease tender issued on June 19, 2022, for fuel supply services, stipulated a daily fine of MVR 100 for any rent payments delayed beyond the 10th of each month. The report further highlighted that the formal lease agreement signed on September 12, 2022, also explicitly mandated the collection of fines at this specified rate.

However, the report noted that after the council administration signed the agreement with the winning bidder on September 12, 2022, the council's 102nd general meeting of its fourth term, held on April 25, 2023, passed a resolution to reduce the fine to 250 Rufiyaa per month.

The Audit Office highlighted that the alteration of the fine rates violated the State Finance Regulations. These regulations mandate that bidding processes must be conducted in a manner that ensures equity, transparency, and competitiveness among participants, while remaining economically advantageous and responsible.

Furthermore, the Auditor General’s Office stated that the decision to revise the fine rates resulted in a loss of potential revenue for the council. Specifically, the council lost a total of MVR 297,850 in accrued fines that would have otherwise been collected for non-payment of rent.

The report also outlines the office's recommendations for addressing and rectifying these issues.