Audit Uncovers MVR 3.5 Million Misappropriated at PSM; Auditors Say Financial Records Unreliable

A government audit has revealed that MVR 3.48 million was misappropriated from Public Service Media (PSM) in 2021, with auditors declaring the company’s financial records too unreliable to issue an opinion. The Auditor General’s Office, in a report released on June 16, identified extensive financial mismanagement, lack of transparency, and weak internal controls.

According to the report, the MVR 3.48 million misappropriated in 2021 is part of a larger pattern of irregularities totaling over MVR 9.03 million between 2020 and 2024. The audit states that poor recordkeeping and undocumented transactions severely compromised the integrity of PSM’s accounts.

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Among the key issues flagged by the Auditor General’s Office:

• No depreciation or amortization recorded for fixed or intangible assets.
• Over MVR 127 million in expenses unverified due to lack of supporting documents.
• An unexplained MVR 13.8 million adjustment made to retained earnings.
• No reconciliations performed for key bank accounts; cash balances were not physically verified.
• PSM failed to implement mandatory accounting standards (IFRS 9, 15, and 16).
• Retirement benefit obligations were not recorded in accordance with international standards (IAS 19).

In addition, auditors found that PSM had no proper asset registers, and several of its assets—including land, buildings, and regional offices—were not included in the financial statements. The state media company also recorded MVR 516 million in capital contributions from the government without adequate documentation.

PSM ended the year with an accumulated loss of MVR 177 million, including a net operating loss of MVR 123.9 million. To stay afloat, the company depended on a government grant of MVR 100 million during the period under review.

Due to these serious deficiencies, Auditor General Hussain Niyazy stated that his office could not determine the true financial position or performance of PSM, resulting in a disclaimer of opinion—the most severe outcome in an audit report.

The findings raise fresh concerns about financial oversight and governance at state-owned enterprises and are expected to draw scrutiny from the Parliament and public watchdog bodies.