Auditor General warns of excessive budget releases to state-owned companies outside the budget

Auditor General Hussain Niyaaz has warned that the proportion of funds released from the state budget to cover the recurrent expenses of State Owned Enterprises (SOEs) has become extremely high, and that significant amounts have also been given to companies not specified in the budget. The Auditor General's technical advice report for next year's state budget was published by the Audit Office today. According to the report, MVR 2.87 billion was spent on SOEs in 2023, MVR 4.1 billion in 2024, MVR 6.8 billion last year, and MVR 2.46 billion so far this year. The budget estimate for next year is MVR 2.2 billion. The Auditor General noted that the trend shows millions of rufiyaa increasing year after year, and that much of the capital released to SOEs was used for recurrent expenses. He also highlighted that an additional MVR 1.84 million was spent on capital last year beyond the budget allocation, and that by the end of 2025, MVR 4,317 million in dividends and MVR 4,997 million in loan repayments were due but not received. The Auditor General stressed the need to reduce expenses, strengthen company management policies, merge similar companies, right-size the workforce, and identify cost-saving measures. He urged that these changes be implemented as quickly as possible. With more than 30 government-owned companies and over 41,000 employees, running many at a loss places a heavy burden on the state. The report also noted that while some companies were closed or merged, new ones have been established, and election-related hiring has raised concerns.