FENAKA audit: Projects delay, MVR 247 paid in excess

Auditor General's Office has revealed that 50 projects being carried out in various islands across Maldives by FENAKA has been extended, with MVR 247 million paid in excess to employees as salaries and benefits.

The revelation was made in an audit conducted on staff recruitment, promotions, salaries and allowances for the years 2021 to 2024.

According to the report, projects initiated to develop buildings in various islands had been extended, resulting in additional costs for salaries and allowances.

The audit noted that projects estimated to be completed within six months have been extended for nearly three years, resulting a total of MVR 241 million incurred in salaries and MVR 6.4 million in allowances.

FENAKA had also spent MVR 13.5 million on salaries and allowances in islands with no active development projects, the probe found.

Number of FENAKA employees:

- 2021: 4268 employees

- 2022: 6332 employees

- 2023: 6672 employees

- 2024: 6609 employees

The report highlighted that although there were only 3523 employees at FENAKA by the end of 2020, the number had increased year on year. Between 2021 and 2024, the company had employed 7228 employees, of which 4557 were permanent staff and 2671 were temporary.

By the end of 2024, 6317 employees remained as permanent staff, the report detailed.

Auditor General's Office said this increase did not reflect the company's operations expansion, but was a 32 percent increase in employees compared to its electricity and sewerage connections.

Because of this, the salary and allowance costs, in comparison to the company's income and expenses incurred for fuel, engine spare parts are much higher making it unsustainable to run the company.

Expenses on salaries and allowances:

- 2021: 438 million

- 2022: 754 million

- 2023: 895 million

- 2024: 890 million

According to the report, the company spent about 38 percent of its 2022 revenue on employee salaries and benefits. In 2023, the figure stood at 39 percent, while last year 36 percent of revenue was spent on these expenses.

The audit said that other utility companies in the country spend between 12-20 percent of their revenue on employees and benefits.

During the period, FENAKA also recruited 2,480 employees for permanent positions without public announcements. The audit highlighted that the company's regulation making this allowance creates an environment for its management to hire staff based on personal interest, recommending that the regulation be changed.

- FENAKA hires more employees during elections.

- Despite the cut back on temporary employees, more permanent employees were recruited.

- 297 people who were laid off from temporary jobs were given permanent jobs.

- The number of employees at FENAKA Corporation is higher than that of other government companies providing utility services within the islands.

- FENAKA has an average of 11 more employees than MWSC's island branches providing water and sewerage services. It had an average of four employees more than STELCO.

- There is a significant difference in the number of FENAKA employees in different islands with comparable operation sizes to provide electricity, water and sewerage.

- Some branches have employed more than the required number of employees for individual positions in the company's employment structure.

- Some employees of the company are given promotions against company policy

- Employees were hired without job interviews

- MVR 19.5 million was dispersed as a special allowance to employees in permanent jobs who were assigned to work on in-house projects.

- MVR 229,711 was dispersed to temporary employees working on in-house projects.

Based on the many issues that came to light from the probe, the audit office recommended the company not to hire more employees unless it has confirmed a need for additional staff. They have also been asked not to recruit employees without public announcements and to investigate those who have given promotions against company policy.