SIFCO awarded projects beyond its operational capacity

The 2020 audit report on Maldives National Defense Force (MNDF) shows the Sifainge Cooperative (SIFCO) was contacted several projects beyond its operational capacity.

The report, released by the auditor General’s Office on April 21, highlights three such projects.

They are:

• Procurement of furniture for MNDF’s nine-story building
• Work on the composite training center in Lh. Maafilaafushi
• Relocation of MNDF’s Hulhule’ post

The value of the three projects reaches MVR 25 million. MVR 18.9 million was spent on the projects by the end of 2020. And more than MVR 9.6 million was spent as advance payment.

The Auditor General’s Office noted that there were significant delays in the completion of the projects despite the large advance payment. Auditors found the main reason for the delay was that the projects were beyond SIFCO’s operational capacity.

The office advised MNDF to check that contractors have the financial and technical capacity to undertake projects, and to renew paperwork before the initial period expires, in instances where project period extensions are required.

The office also noted that MNDF failed to take necessary measures to recover over MVR 4.5 million owed to the agency.

The Auditor General’s Office said the same issue had been highlighted in the 2019 audit report, and effective measures had not been implemented to rectify the issue.

The office advised MNDF to take measures set down on the Public Finance Regulation to recover funds within the mandated timeframe, and to transfer the funds to the Public Account, do the necessary accounting work, and reconcile the books.