Audit Reveals Excess Staff and MVR 247M in Extra Disbursements at FENAKA

A recent audit report by the Auditor General’s Office has uncovered significant financial mismanagement and politically-influenced hiring practices at FENAKA Corporation, including excess staff recruitment, unusually high salary expenditures, and incomplete infrastructure projects.

The audit, covering the four-year period from 2021 to 2024, reveals that FENAKA disbursed an additional MVR 247 million to its employees beyond expected figures. 

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According to the audit, the number of FENAKA employees increased from 4,368 in 2021 to 6,609 in 2024, nearly doubling in four years. This growth in staffing far outpaces the increase in utility connections.

Salary and allowances increased sharply over the four years:

• 2021: MVR 438 million
• 2022: MVR 754 million
• 2023: MVR 895 million 
• 2024: MVR 890 million

One of the critical findings is that many projects on 50 islands remain incomplete, with work halted for years despite initial plans to finish some projects within six months. The prolonged delays have led to an additional MVR 241 million in salary costs and MVR 6.4 million in allowances, due to idle staff assigned to these projects.

The audit also found that 297 contract employees who had been terminated were later rehired as permanent staff, and some were hired without any interview or formal recruitment process. The report notes that recruitment often coincides with election periods, suggesting possible political interference.

Alarmingly, FENAKA spends around 40 percent of its income on salaries, which is significantly higher than other state-owned utility companies. By comparison, STELCO and MWSC spend only 12 to 20 percent of their income on staff expenses for islands of similar scale.

The audit warns that such disproportionate spending “undermines the company’s sustainability,” especially when considering the high costs of essential spare parts and fuel required for operations.

Further, FENAKA’s existing rules allow hiring without public announcements, a practice the audit identifies as a risk for biased and politically motivated recruitment. The report strongly recommends revising these rules to mandate public job postings and transparent recruitment procedures.

With its financial and operational practices under scrutiny, FENAKA faces mounting pressure to implement reforms and enhance transparency to ensure long-term viability and public trust.