Audit Office flags persistent governance failures at Fenaka
The Finance Committee met on Thursday to review the Auditor General’s special audit report on Fenaka Corporation.
The Audit Office has informed Parliament’s Finance Committee that Fenaka Corporation has failed to implement recommendations made in past audit reports and continues to operate in a way that repeats earlier financial and procedural issues.
The Finance Committee met on Thursday to review the Auditor General’s special audit report on Fenaka Corporation. Several members expressed concern that the issues highlighted in the latest audit are similar to those raised in previous years.
Some members questioned why the problems persist, with one MP noting that the Finance Ministry continues to allocate funds to companies despite delays and unimplemented projects.
“All these issues are recurring. There seems to be no mechanism to stop them. Every report ends with the same recommendations. What can be done to ensure accountability?” a member asked.
Responding to questions, Assistant Auditor General for Performance and Special Audits, Ibrahim Aiman, said Fenaka is one of the most frequently audited state-owned companies.
Aiman explained that special audits are conducted when serious concerns are identified in financial statements or company operations. “In 2017, one of the key recommendations was to amend the procurement rules to prevent direct awarding of projects. However, no such amendment has been made, and the same practices continue,” he said.
He added that the Audit Office’s role is limited to making recommendations and reporting non-compliance to Parliament. “Unlike in some countries, our office does not have investigative powers. We can only follow up on whether recommendations are implemented and report the outcome,” Aiman said.
The Audit Office released a special audit of Fenaka late last month, which revealed several financial and procedural irregularities. According to the report:
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Between 2021 and 2023, MVR 8.8 billion was spent on goods and services, some of which were procured outside tender processes and at inflated prices.
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Fenaka awarded 674 contracts worth MVR 2.22 billion for materials and water and sewerage projects. Of these, 439 contracts (65%) worth MVR 1.37 billion were awarded without competitive bidding.
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More than MVR 1 billion was spent on 57 projects for the construction of rural power plants and office buildings by 2023. Of these, 41 projects remain unfinished, with additional costs estimated at MVR 241 million.
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Power plant construction costs exceeded market rates by MVR 767 million.
The Audit Office said Fenaka’s continued failure to follow financial and procurement regulations highlights systemic weaknesses in internal controls and governance within the state-owned utility.
