MVR 26 million from Fenaka projects disbursed as petty cash to staff

The audit report of Fenaka Corporation for the years 2021 to 2023 has uncovered that MVR 26 million, allocated for island projects, was either deposited directly into the personal accounts of company employees or handed over as physical cash to various staff members.

According to the report, Fenaka deposited MVR 26 million under the label of project-related expenses. Of this, MVR 21 million was deposited directly into the personal accounts of employees, while MVR 5.1 million was withdrawn in cash. A significant portion of this was issued as petty cash to project managers temporarily hired to implement projects on different islands.

The Auditor General’s Office noted that Fenaka lacks a proper mechanism to verify whether the petty cash listed as reimbursed expenses was actually used for company purposes. Since there is no appropriate paperwork to demonstrate how the money was handled or spent, the report raised major concerns about the possibility of misuse.

Additionally, it was discovered that MVR 1.5 million in hard currency that had been issued throughout the audit period lacked any bills, receipts, or other documentation attesting misuse of funds.

In addition, the report stated that the Managing Director's Bureau spent MVR 6.4 million in petty cash, of which MVR 800,000 is unaccounted for. No explanation or documentation was provided to auditors regarding this expenditure.

The audit also noted that MVR 61 million in spending had no clear record of which specific projects the money was allocated to between 2021 and 2023. According to the report, the misuse of funds was likely made easier by the practice of directly depositing project-related funds into the personal accounts of temporary staff, without proper financial tracking.

Beyond these issues, the report raised additional serious concerns, particularly regarding the awarding of projects without a formal bidding process. Of the MVR 2.2 billion worth of contracts awarded during the audit period, MVR 1.3 billion, nearly 60 percent, was assigned outside the legal procedures outlined in the Public Finance Act.

In total, 673 agreements were signed during the audit period. Of these, 438, around 65 percent, were awarded without being opened for tender.

The report also revealed that three companies owned by family members of then-Managing Director Ahmed Saeed received contracts worth MVR 49.7 million during this time.