Auditor General urges Thoddoo council-owned company to reduce reliance and strengthen financial independence

The Auditor General’s Office has recommended stronger financial discipline for A.A.Thoddoo Local Authority Pvt Ltd, the first company established by a Maldivian island council.  

The 2023 compliance audit found the company has operated for more than a year largely dependent on the Thoddoo Council, which owns it outright. Incorporated on December 19, 2022, the company was intended to carry out economic activities to meet local needs under constitutional and legal provisions.  

Revenue efforts included charging fees for garbage collection, guest beaches, and selling construction materials. However, the audit highlighted several weaknesses:  

• The company had not prepared its 2023 financial statements.  
• Transaction software was incomplete as of the audit date, 13 October 2023.  
• From January to October 2023, the company received MVR 5.3 million, of which more than MVR 2 million came directly from the council.  
• Monthly board salaries and allowances totaled MVR 180,000, leaving just MVR 154,786 in the bank by October.  
• Employees went unpaid between September and mid-October due to lack of funds.  

The Auditor General recommended that the company:  

• Prepare auditable financial statements in line with the Companies Act.  

• Restructure operations to cover recurrent expenses from its own income.  

• Reduce reliance on council funding and pursue financial independence.  

The findings underscore the challenges faced by council-owned enterprises in balancing local service delivery with sustainable business practices.