The Auditor General’s Office has identified multiple breaches of public finance regulations in projects to renovate the Vaavu Atoll Council office and purchase a fibreglass dinghy.

The findings were detailed in the council’s 2024 compliance audit report, released last Thursday.

The report found that the MVR 3.94 million contract for renovating and extending the council office was amended twice, increasing its value by MVR 794,615. Of this, MVR 505,241 worth of work not included in the original bill of quantities was assigned to the contractor without approval from the council’s Bid Committee or the National Tender Board.

The audit also found that the contractor was not required to provide a performance guarantee, despite regulations requiring one for projects worth more than MVR 500,000. An advance payment of MVR 638,042 was made without an advance payment guarantee, and the required deductions from subsequent bills were not made.

The council also failed to deduct the required retention money from payments. After accounting for liquidated damages for delays, the remaining amount payable to the contractor was MVR 121,820 below the required retention amount.

Separately, the audit identified issues with a MVR 469,713 contract awarded on 24 March 2024 to supply a 22-foot fibreglass dinghy with a 115-horsepower engine. The contract did not specify penalties for delays, and records confirming the date the vessel was handed over to the council were not maintained.

The Auditor General’s Office recommended that the council ensure contract amendments comply with public finance regulations, obtain the required guarantees and maintain records confirming project completion and handover dates.

The atoll councils have since been dissolved following amendments to the Decentralisation Act, with the Local Government Authority now handling their responsibilities.