The 2024 audit report of the Maldives Sports Corporation has revealed major irregularities in the company's financial transactions and that the company incurred a loss of MVR 34.5 million.

According to the 2024 audit report of the Sports Corporation published by the Auditor General's Office on the 20th of this month, the company has completely failed to generate revenue since its inception. As a result, the audit highlighted that the company's total cumulative loss reached MVR 34.5 million by the end of 2024.

The report stated that while the company's operational costs were fully funded by the state budget, adequate measures were not taken to reduce expenses. Furthermore, it noted that while receiving no revenue, spending millions of Rufiyaa every year on employee salaries and administrative management posed an extremely heavy burden on the state treasury.

Additionally, due to a failure to properly maintain important documentation required for the audit, auditors faced obstacles in verifying the accuracy of certain figures in the financial statements. The report also highlighted that the company's asset register was not properly maintained and financial statements were not prepared in accordance with international standards.

According to the audit, one of the most serious issues involves financial transactions related to the proposed Sports School project planned for development in Hulhumalé. It stated that a large portion of the expenditure for this project was incurred in direct violation of state financial regulations.

In this regard, the report detailed that contracts worth large sums were awarded to private parties without public tenders in violation of procurement procedures, and proper records were not maintained for advance payments issued for these works.

The audit noted that the Sports Corporation released funds for certain services without formulating agreements and paid bills before work was completed. Suspecting acts of corruption in this matter, the Auditor General concluded that this requires further investigation by the Anti-Corruption Commission (ACC).

Regarding the company's day-to-day operations, the report also highlighted that it was not managed in accordance with the Corporate Governance Code established for state business enterprises. The absence of an internal audit system and minimal board involvement in financial decision-making were cited among the main reasons for the company's financial decline.

The audit report provided several recommendations to resolve these issues. First and foremost, it instructed the company to strengthen its financial record-keeping system and fully comply with the State Finance Act and regulations.

Furthermore, it recommended coordinating with relevant authorities to recover funds lost in connection with the Hulhumalé Sports School project and taking action against negligent parties. It also instructed the company to formulate a long-term plan to reduce expenses and identify additional revenue streams.

However, considering the company's mode of operation, the report also advised the government to decide on the future of the company if sustainable revenue cannot be generated, in order to minimize financial losses to the state.

Following that recommendation, the government has now dissolved the Sports Corporation.