Govt to take action on last govt errors in state accounting
He mentioned that the figures would be adjusted after consultations with the Auditor General and the Attorney General.
Finance ministry suspended the publication of its public expenditure report due to significant and illegal issues related to the systematic recording of public expenditure in the previous government, finance minister Moosa Zameer announced Saturday.
At a press conference at the President's Office, Zameer explained that his predecessor in this government, Dr Mohamed Shafeeq, halted the release of expenditure figures after discrepancies were identified when reconciling expenses between different periods of the fiscal year.
Zameer highlighted challenges in allocating funds for ongoing projects, noting specific observations, including:
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The current budget must accommodate MVR 2.5 billion in unpaid bills carried over from last year and previous years.
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These bills could be spread across various ministries, and the finance ministry is collaborating with the Auditor General's Office to identify them.
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Last year’s budget included unpaid expenditures amounting to MVR 3 billion, which have been included in this year's cash flow.
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Discrepancies in cash flow from year to year are typical, but the large figures are attributed to the fiscal policy planning of the previous government.
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A supplementary budget was submitted after funds were deducted from the budget code for other expenditures, which Zameer indicated was a violation of transparency standards.
Zameer also noted discrepancies in the accounting records, saying, "We are noticing that there is a difference of about MVR 2 billion in the recording. If we include this amount in this year's budget, it would add MVR 2 billion more to last year’s budget."
He mentioned that the figures would be adjusted after consultations with the Auditor General and the Attorney General.
Zameer discussed challenges related to small amounts spent within the budget for large-scale projects. He provided examples, such as a MVR 100 million project where only MVR 2 million was spent, leading to delays and the rolling over of expenses into the next fiscal year. He cited cash flow constraints and noted that at the end of the year, small sums are sometimes added to the budget, allowing for advance payments.
"This approach contradicts both the letter and spirit of the law," Zameer stated.
Attorney General Ahmed Usham highlighted further concerns, noting that billions of expenditures from last year were not properly entered into the accounts according to finance ministry rules.
He explained, "There is about MVR 2 billion in the system that has not been recorded in compliance with regulations. If this MVR 2 billion is included in this year's budget, it would be illegal. We are working towards a legal solution."
Usham emphasised that the constitution requires expenditures to align with the budget approved by parliament. He recalled his time in parliament, noting that each year, the budget was supplemented with the following year’s allocation to address past expenditures, a practice he described as unconstitutional.
Usham pointed out that:
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The budgets for 2020 to 2023 were presented in this manner.
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The issue was raised by the parliamentary leadership.
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A frequent concern during budget debates has been the government’s practice of supplementing the budget post-expenditure.
"We have seen this practice repeatedly over the past few years, and we estimate there are approximately MVR 2 billion in unrecorded expenditures," Usham noted.
"The key issue is that there have been violations of the constitution, particularly Article 96. There have also been breaches of the finance law and rules. We are committed to investigating these cases and taking appropriate legal action."
Usham concluded by stating that amendments to the law would be made to prevent similar issues from arising in the future.
