Attorney General Ahmed Usham has disclosed that MVR 2 billion in financial transactions were not recorded in state accounts by the former administration.
Speaking to reporters at the President's Office on Saturday, AG Usham said the previous government had handled financial transactions in violation of the Constitution and laws. While it is unlawful to include unaccounted sums in this year’s financial records, Usham said legal action will be taken against those responsible for the improper handling of these funds under the previous government.
Usham said a decision regarding the unrecorded MVR 2 billion will be made after considering the advice of the Auditor General. Noting that the Auditor General is currently reviewing the matter, Usham said the Auditor General's report is expected within the next two weeks.
Finance Minister Moosa Zameer, also present at the press conference, clarified that the MVR 2 billion in question was paid by foreign parties directly to contractors for various projects, and had bypassed standard recording procedures. The lack of recording of such a significant amount will pose challenges for the government to maintain state accounts, and complicate measures taken by the government to reduce expenditure, he said.
Minister Zameer added that the government ceased publishing weekly revenue and expenditure details in June this year after the MVR 2 billion issue came to light. He said the disclosure of the state's financial statements without resolving the issue of the unrecorded MVR 2 billion could undermine donor confidence in the state.
The minister assured that the issue could be eventually resolved but would take time. He said such problems arise as the state spends beyond the amount allocated for a project for that year, in the name of advance payments or other similar arrangements. Such spending makes it difficult to manage the state's cash flow, he said.
