The audit report into North Huvadhu Atoll Council has revealed the council's failure to maintain their financial records.

According to the 2018 audit report of the Secretariat of North Huvadhu Atoll Council, the details of the council's leftover budget could not be verified.

As such, while the Ministry of Finance quoted MVR 1،387،561 (one million three hundred eighty-seven thousand five hundred sixty-one rufiyaa) as the councils leftover budget on 31st December 2018, the report could not confirm which codes or transactions the leftover budget originated from as the council failed to provide those details.

The report further states that the council excluded any mention of these transactions in their financial statements.

Moreover, the Auditor General’s Office (AGO) claims to have requested the details from the ministry but didnot receive the relevant information even until 19th December 2019.

When questioned about the missing money, the council stated that although the ministry disbursed the money on 31st December 2018, the money was not deposited to the council's bank account until 28th march 2019. Additionally, while highlighting that the deadline for the council's financial statements was 31st March 2019, the council claimed to have informed the Local Government Authority (LGA) with the details of the council's transactions via a circular on 12th May 2019.

The council further claimed that they received the relevant information 3 days before the deadline, and therefore could not include the details of the transactions in the council's financial statements.

The audit report recommended the council to correct these inconsistencies after holding discussions with the Ministry of Finance and advised the council to prepare future financial statements according to International Public Sector Accounting Standards.