International Journal of Government Auditing – July 2012
SAI Signs Memorandum of Understanding to Help Prevent Financial Crimes
The Auditor General’s Office (AGO) signed a memorandum of understanding (MOU) with the Maldives Police Service (MPS) on April 18, 2012. The objective of this MOU is to help prevent financial crimes against the laws and regulations of the country by extending mutual support and assistance towards the work of both organizations; identify and expose fraudulent schemes and extend assistance in investigation and prosecution of such cases; share intelligence and information; and extend technical assistance and provide expert advice in forensic accounting and audit-related areas. The MOU will help Maldives in its fight against fraud and organized financial crimes and money-laundering activities. It will also help develop institutions and technical capabilities in forensic accounting and audit areas and provide a mechanism for shared training and technical resources.
The AGO and MPS have similar MOUs with the Anti-Corruption Commission (ACC), the institution responsible for the investigation of fraud and corruption against the state.
After signing the MOU, the Auditor General, Niyaz Ibrahim, handed over the first fraud audit report and related audit evidence files to the Commissioner of Police, Mohamed Riyaz, to conduct the forensic investigation necessary to prosecute the offenders.
The fraud audit report resulted from a special AGO audit investigation that was initiated after suspected fraud was uncovered during financial audits of the Ministry of Health and Family, as well as the Special Budget of the Ministry of Finance and Treasury (MoFT). The audit focused on a contract under the purview of the Ministry of Health and Family, which was to supply medical and laboratory consumables to Atoll Hospitals and Health Centres. The audit report covered anomalies within the bidding process, contract management, and payment for invoices submitted by the contractor.
Specifically, the report noted that in the bid evaluation process, collusive practices were observed by three companies whose bids were rejected by the MoFT, and the contract was ultimately awarded to a company that did not possess the technical and financial capabilities stipulated and was known to have misrepresented its company profile by falsely claiming to have undertaken similar projects with the Ministry of Health and Family in the past. Furthermore, the contract was awarded despite ACC’s order not to do so because the company did not meet two specific bid criteria. Additionally, the audit uncovered fraudulent payments and falsified documents.
After handing over the audit report to MPS, the AGO made the report available to the public.
For additional information, contact the AGO: