Audit says MPL lost oil worth MVR 28 million to fraud
The audit report reveals that MPL's procurement department played a major role in the corruption.
By
Ahmed Mizyal
An audit revealed on Thursday that MVR 28.3 million worth of diesel purchased by MPL through Fuel Supplies Maldives (FSM) for use in Male commercial port has been lost to a large-scale fraud.
This was revealed in an audit conducted at the request of the parliament's State-Owned Enterprises (SOE) committee to look into diesel purchase transactions for MPL operations.
In preparing the audit report, the Auditor General's Office examined the transactions involving diesel purchases made by MPL between 2018-2020.
The audit report noted the following from commercial port operations from 2018 to 2020:
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MPL purchased diesel worth MVR 90.8 million (equivalent to 8,855,601 litres)
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Out of which, diesel worth MVR 28.3 million (2,824,288 litres) went missing
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This is 31.9% of the total diesel purchased during the period
Details of lost diesel in FSM and MPL transactions
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Diesel allocated for tugboat operations: worth MVR 18.5 million (1,862,148 litres)
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Diesel released to run generators: worth MVR 9.6 million (950,365 litres)
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Diesel released for RTG cranes lost: worth MVR 127,616. (11,775 litres)
According to the report, 799,900 litres (MVR 7.2 million) of diesel sent to Hulhumale jetty area were not filled up on MPL tugboats. This has been confirmed in the audit by the captains of the tugboats.
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The captains of the MPL tugboats informed the audit that they did not fill-in oil from the Hulhumale jetty area
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FSM's delivery notes show records that oil was released from the Hulhumale jetty area to an unused tugboat
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Assistant Manager of MPL's procurement department signed delivery notes that diesel supplied to hulhumale jetty area was handed over; FSM drivers signed the delivery note that diesel was issued to MPL tugboats from the area.
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The audit report noted that employees from both MPL and FSM are involved in the scandal
MPL procurement directly involved in oil scandal
The audit report reveals that MPL's procurement store played a major role in the corruption.
From 2018 to November 2020, forged copy forms were submitted to the procurement department, amassing MVR 13.2 million worth (1.40 million litres) of stolen oil. Advanced request forms for oil were also used among the forged documents.
MPL accounting system is based on the date of issuance of oil purchased, the vessel and other important information contained in the request forms.
The audit report noted that the request forms were forged and false information was recorded in the accounting system to compensate for oil purchased by the company, falsely depicting that no oil had been displaced. The oil purchased was falsely recorded as staked for the company, to enable buying more diesel than was required time and time again, making way for illegal sale of oil to other black market suppliers.
Some of the additional issues noted in the audit report are:
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The bulk purchase orders sent by MPL to FSM were made by phone rather than by keeping documentation.
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The amount of diesel purchased by MPL increased by 59% in 2020 compared to 2021, but in 2020, due to the COVID-19 pandemic, harbour operations were less than the previous year.
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An internal audit conducted by MPL in 2019 to investigate the use of oil to run generators noted that the company was losing some of the fuel it purchased; but MPL did not investigate further or attempted to determine the actual amount of fuel required for operations in preparing the annual budget.
Some recommendations in audit report
The audit report advised ACC and police to investigate and take action against employees involved in the scandal. In addition, some of the recommendations are:
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Seek compensation for the embezzled fuel from those involved in the scandal
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Those who create false request forms should be identified and taken to the police for investigation.
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If changes are made to the amount and place of oil sent by MPL to FSM, prepare relative documentation to identify who authorised and requested it.
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Before preparing the budget, MPL units should obtain reports on fuel consumption and take them into account when preparing the budget for the coming year.
