Audit: No efforts to recover MVR 10M owed to Hulhumale’ Hospital

An audit report publicized by the Auditor General’s Office (AGO) has uncovered that Hulhumale’ Hospital made no efforts to recover almost MVR 10 million owed to the hospital by the end of 2021.  

The audit report dated October 30th reveals that although management of Hulhumalé Hospital was transferred from Aasandha to the Malé Group of Hospitals (MGH) in 2020, the agreements signed on June 1, 2017 and August 20, 2017, to operate a pharmacy and on April 19, 2019, to operate canteen at the hospital, had not been transferred under Hulhumalé Hospital’s name.

Furthermore, the audit report highlighted that a part of Hulhumalé Hospital was leased to a company to operate a pharmacy without a formal lease agreement. Consequently, no rent payments had been received as of December 18, 2022.

As per the audit report, the hospital had neither received rent payments nor profit shares from the companies leasing its premises to operate a pharmacy and a canteen, with unpaid dues totaling at MVR 1.74 million at the end of 2022 according to hospital records.

According to public finance regulations, if payments owed to a public entity remain unpaid despite prior recovery efforts, the entity must issue a written notice to the debtor, demanding payment within seven days.

If the debtor still does not make the payment within seven days, a lawsuit must be filed. Should the funds remain unrecovered even after legal action, the Finance Ministry must be informed to determine the next steps.

Nevertheless, the audit report states Hulhumale’ Hospital had MVR 9.42 million in unpaid dues at the end of 2021 without including dues from Aasandha.

They include MVR 1.86 million owed by government offices, MVR 3.33 million owed by state-owned companies and MVR 4.23 million owed by private companies.

The audit report stresses that no efforts were made to recover these unpaid dues.

Accordingly, the AGO recommended that Hulhumalé Hospital take prompt action to recover the owed funds, including engaging in discussions with relevant parties to secure payment within a reasonable timeframe. The Office also urged that agreements previously under Aasandha’s name, from when the hospital was managed by the company, be transferred to the hospital’s name.