COVID Corruption: Two ministries under fire after audit reveals misconduct

An audit report has shown that the company that was tasked with the procurement of 75 ventilators for the Maldives is not a WHO-recommended supplier.

The Audit Office revealed the information in a compliance audit report on the COVID-19 related expenses incurred by the Health Ministry. The report, signed by Auditor General Ahmed Ziyath, said Dubai company, Executors General Trading’s financial and technical capacity was not taken into consideration when awarding the project to the party. While the procurement of 75 ventilators was tasked to the company for MVR 4,502,250, the due procedures were not followed in awarding the project to the company, said the report. There has been no previous communication between the Maldives government and the company prior to this project, it further noted.

The report also noted that the Health Ministry in its documents implied that the company is a WHO recommended company. However, the company is not among WHO-recommended suppliers, said the report. While the company has not had any communications with WHO, the organization has confirmed that it did not at any point shared a list of recommended suppliers with the ministry, said the report.

The Audit report also noted in detail that neither a performance guarantee nor an advance payment guarantee was provided despite 90 percent of the agreement amount being disbursed to the company. While sensible judgement was ignored in disbursing funds in advance, no permission was sought in writing from the Finance Ministry with regard to matters pertaining to the performance guarantee, said the report.

It was also noticed that the ministry’s biomedical engineer’s opinion regarding the ventilators in question was disregarded prior to the bid committee’s decision to award the project. The ventilators were not procured and delivered within the agreed time frame, it further said. The report called on authorities to further investigate the matter, further noting that the procedure followed in awarding projects to local companies to procure ventilators were also carried out against regulations.

Discrepancies were also outlined in the Tourism Ministry’s COVID-19 related expense compliance report.

While the ministry spent MVR 26,212,727 as COVID-19 related expenses, the report showed that the Tourism Ministry incurred huge expenses which were outside of its mandate. Transactions were made from the Trust Fund before allocating a budget, and a budget breakdown was not approved by the relevant committee. Procurement processes were also initiated before the necessary budget approval figures were decided. The procurement and installation of thermal imaging cameras at Velana International Airport were not conducted as per regulations and violated that Public Finance Act, it further noted. A large expense was also incurred in the name of conducting an ‘assessment’ where US$ 50,000 was paid to the company of two consultants as consultation fees. A further MVR 85,666 was paid as withholding tax for the transaction.

The President’s Office has stated that the government would take appropriate action based on the findings of the two reports. An emergency motion has also been submitted to the Parliament to look into the matter.