Ismail Zariyand (2024)

The adoption of the 2008 Constitution in the Maldives, which marked the end of a three-decade authoritarian era, initially heralded lofty aspirations for enhanced public administration, particularly in financial transparency and institutional reform. Yet, fifteen years later and under four successive presidential administrations, entrenched corruption across public administration, procurement, and other sectors remains a critical concern. In recent years, an unplanned surge in public expenditure with persistently high budget deficits contributed to public debt escalating dramatically. Estimates show debt at MVR 110.2 billion in 2023, up from lower levels in previous years, with the IMF projections placing total public and guaranteed debt at over MVR 138 billion by the end of 2024.

Systemic corruption continues to severely undermine both economic and political development by eroding investment incentives, corroding public institutions, skewing wealth and power distribution, enabling asset stripping and illicit resource exploitation, and fostering pervasive societal mistrust. Over the past decade and a half, corruption scandals involving vast sums have plagued the nation. One of the most notorious is the MMPRC scandal: more than US $90 million was embezzled through illicit island and lagoon leases, involving high-level political figures and resulting in convictions, though convictions have since been overturned, and non-recovery of stolen assets has occurred.

Practical anti-corruption efforts remain limited. Although international partners such as UNODC and USAID have provided grants to support reforms, their efforts often lack deep engagement with the structural causes of entrenched corruption. Research underscores the importance of establishing robust accounting systems and conducting timely statutory audits as foundational anti-corruption measures. Auditors and audit professions serve as frontline defenders against fraud; higher-quality public-sector auditing has been empirically linked to lower levels of national corruption. (Everett, 2007) (Dipietro, 2011).

However, in the Maldives, annual statutory audits and consolidated financial statements have consistently gone uncompleted or unpublished for state offices over the past 15 years. Legally, these lapses cannot be attributed to a lack of constitutional or statutory mandates:

• Constitutional Provisions:
  • Article 209 calls for an independent Auditor General.
  • Article 213 stipulates that audit and annual reports must be submitted to both Parliament and the President.
  • Articles 70(b)(3) and (5) assign Parliament oversight over executive and independent offices, while the Public Accounts Committee is tasked with reviewing audit reports (Majlis, 2019).
  • The Maldives’ Auditor General’s Office is a member of INTOSAI, adhering to the Lima Declaration and International Standards of Supreme Audit Institutions (ISSAI-1), which emphasise timely, standard-based auditing.
• Statutory Deadlines (Public Finance Act, Decentralised Administration Act, Audit Act):
  • State offices must submit their financial statements to the Auditor General within three months of the financial year’s close (Public Finance Act, Article 35(a), 2006).
  • Local councils are similarly required (Decentralised Administration Act, Article 102(c), 2010).
  • The State Accountant General consolidates and forwards these statements within three months (PFA, Article 38, 2006); the Minister of Finance must provide the report to the Auditor General within 14 days.
  • The Auditor General is required to audit individual statements within two months and deliver findings to auditees, who in turn submit them to the President and Parliament within a month (PFA, Articles 36(a), 39, and 40, 2006).
  • Under the Audit Act (Article 16, 2007), the Auditor General must publish and submit the audited report—with recommendations—to both the President and Parliament within three months of receiving consolidated statements.

Despite these robust constitutional and statutory frameworks, compliance has been sorely lacking. As the newly elected Parliament prepares to take the oath in the coming weeks, it is both imprudent and counterproductive to rush to indict corruption without first ensuring that proper constitutional procedures especially those pertaining to state audits are rigorously enforced and institutionalized.

References

3/. (2006). Public Finance Act. Male City: Parliament of Maldives. Retrieved from https://mvlaw.gov.mv/dv/legislations/92/consolidations/1056

4/. (2007). Audit Act. Male City: Parliament of the Maldives. Retrieved from https://mvlaw.gov.mv/dv/legislations/180/consolidations/998

7/. (2010). decentralized administration law. Male City: parliament of maldives.

Constitution. (2008). Male: Government of Maldives.

Dipietro. (2011). The Corruption and the quality of auditing standards. Asian Economic and Financial Review, 120 – 123.

Everett, N. &. (2007). Accounting and the global fight against corruption. Accounting, Organisations and Society , 513-542.

ISSAI-1. (1977). Principles of Audit. Lima Declaration (p. 17). Lima: INTOSAI.

Majlis. (2019). People’s Majlis. Retrieved from http://www.majlis.gov.mv: https://majlis.gov.mv/en/19-parliament/committee/18