Audit finds MVR 59 million of Kulhudhuffushi housing advance still unrecovered

Of the MVR 65.99 million issued as advance money for the 400 housing units project carried out in Hdh. Kulhudhuffushi, MVR 59.22 million has still not been recovered to the state, a report released by the Auditor General's Office has revealed. This is 90 percent of the total money issued as advance for the project. In the compliance audit report compiled by the Ministry of Construction and Housing and Infrastructure for the period from 2018 to 2023, it is noted that the agreement for the Kulhudhuffushi housing project had to be terminated due to the low standard of the contractor's work and because the performance guarantee period had not been extended. When this agreement was terminated, only 18.74 percent of work of the entire project had been completed. To complete the unfinished work of this stalled project, on 26 August of this year it has now been handed over to Housing Development Corporation (HDC). However, the audit report states that failure to carry out the work of recovering the money that should be received by the state from that project is an act in violation of the state's financial regulations. The Audit Office has instructed that steps be taken to recover this money in accordance with what is stated in the state's financial regulations, and that action be taken against the parties who were negligent in this matter. In addition, the audit report has also recommended submitting to the Procurement Appeal Board to take action against companies that do not complete work, and to ensure the financial and technical capability of companies before handing over projects. Furthermore, the audit has also revealed that due to some projects handed over by the ministry not proceeding in an appropriate manner, agreements were terminated and handed over to other parties, requiring the state to incur a large additional expense. Accordingly, the audit report notes that to carry out 7 projects examined in the audit by handing them over to other parties, an additional MVR 112.33 million had to be spent from the state budget.