LGA: Spending appears to exceed budget because atoll branch expenses are recorded as authority expenditures
8 އޮކްޓޯބަރު 2026 | ބުރާސްފަތި 14:18LGA has stated that administrative costs have surged following amendments to the Decentralization Act, which dissolved atoll councils and reconstituted them as LGA branches. According to the authority, expenditures exceeded the initial budget due to the inclusion of salaries and operational costs for these new branches; however, the LGA emphasized that all spending was conducted with the formal approval of the Ministry of Finance.
The Local Government Authority (LGA) has held a meeting with the Th. Madifushi Island Council to discuss the challenges facing the council and identify areas where support is required. | LGA
The Local Government Authority (LGA) has clarified that its projected expenditure for 2026 appears to exceed the approved budget because the costs of its atoll branches were incorporated into the authority's overall financial figures.
In a press release, the Local Government Authority (LGA) stated that it has taken note of news reports circulating in some media outlets regarding information released by the Ministry of Finance, which suggested that the authority’s spending had exceeded its allocated state budget.
The statement noted that following the 17th amendment to the Decentralization Act, existing atoll council secretariats will be dissolved and replaced by branches of the Local Government Authority (LGA) across the atolls, effective May 17, 2026. With this transition, the LGA will assume full responsibility for the remuneration and benefits of employees, the settlement of outstanding payments to various parties, and all administrative expenditures required to operate these offices.
According to the Local Government Authority (LGA), the total state-approved budget for 2026 is MVR 37.3 million. The authority further noted that as of October 6, 2026, MVR 18.5 million of this budget has been utilized for administrative operations, service delivery, and the payment of staff salaries and benefits.
The Local Government Authority (LGA) has noted that its 2026 state budget allocation was based on the authority's previous administrative structure, prior to the integration of atoll branches under its mandate. Consequently, the LGA stated that the funds required to operate these atoll branches were not included in the 2026 budget approved by the People's Majlis.
To ensure the uninterrupted delivery of public services and the timely payment of staff salaries and benefits, the Ministry of Finance has fulfilled requests to increase the budget allocations for these agencies. The statement further clarified that all expenditures incurred by the atoll branches were funded through these additional budget allocations. It noted that between May 17, 2026, and October 6, 2026, a total of MVR 61.2 million was spent on the operations of these regional branches.
Furthermore, the Local Government Authority (LGA) clarified that the apparent budget overrun for 2026 occurred because the expenditures of atoll branches were consolidated into the authority’s overall financial records. The LGA emphasized that all such spending was conducted in accordance with established laws and regulations, through the official systems mandated by the Ministry of Finance and with the Ministry's explicit approval.
