Thinadhoo Council made no attempt to recover MVR 2 million in land lease dues: Audit

Gaafu Dhaalu atoll Thinadhoo Council has to receive over MVR 2.4 million in land lease fees, but the council has not made sufficient efforts to recover the funds, revealed an audit report.

The 2022 financial audit shows that a total of MVR 2,499,640 is owed to the council from 12 lands. While rent has not been paid for some lands in over ten years, the rent from some of these plots have accumulated to over MVR 100,000.

However, other than sending letters requesting the fees be paid, there is no documented evidence to suggest the council employed any other efforts to collect the money.

The audit further revealed that while the council is also required to maintain details of funds it has to receive, details were not provided about the outstanding MVR 3 million included in the budget.

It also revealed that leased land registry did not include information on all rented plots, with no updates made to the payment methods as well. This prevented the authentication of the financial statements, the audit report further detailed.

According to the report, the rent of the lands leased for shop developments at the N-20 block in Thinadhoo was MVR 4004.40 on the fifth and 6th year, while it was increased to MVR 5959 from the seventh to tenth year.

Although the agreement was made in 2019, rent was paid at a rate of MVR 4,004 without the agreed-upon increment, resulting in the council receiving MVR 99,716 less. Additionally, the council failed to request these funds in writing, according to the report.

Significant area of land leased without land use plan

According to the Decentralization Act, lands of islands can only be utilized after completing the land use plan. However, the audit revealed that the plan was not completed even by August last year.

Despite this, a 230,000 square foot land was leased for 35 years to develop a fish processing factory. The lease terms included no rent for the first year, 15 Laari per square foot from the second to the seventh year, 50 Laari from the eighth to the tenth year, and MVR 1 from the eleventh year onwards.

Another 5,000 square foot land was also issued to a party to develop a glass processing factory as well. This was given for 10 years.

In light of this, the audit report recommended to not lease anymore plots until the land use plan is completed.