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Viewing cable 08COLOMBO237, MALDIVES: FISCAL TRANSPARENCY REPORT

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Reference ID Created Released Classification Origin
08COLOMBO237 2008-03-10 11:47 2011-08-25 00:00 UNCLASSIFIED Embassy Colombo
VZCZCXRO0210
RR RUEHBI RUEHLMC
DE RUEHLM #0237 0701147
ZNR UUUUU ZZH
R 101147Z MAR 08
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 7791
INFO RUEHKA/AMEMBASSY DHAKA 0760
RUEHIL/AMEMBASSY ISLAMABAD 7748
RUEHKT/AMEMBASSY KATHMANDU 5934
RUEHNE/AMEMBASSY NEW DELHI 1876
RUEHKP/AMCONSUL KARACHI 2331
RUEHCG/AMCONSUL CHENNAI 8363
RUEHBI/AMCONSUL MUMBAI 5842
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION
UNCLAS COLOMBO 000237 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EEB/IFD/OMA, SCA/RA, AND SCA/INS 
 
E.O. 12958: N/A 
TAGS: EAID ECON PGOV PREL MV
 
SUBJECT: MALDIVES: FISCAL TRANSPARENCY REPORT 
 
REF: SECSTATE 16737 
 
1. (U) The following is the text of Embassy Colombo's fiscal 
transparency report for Maldives. 
 
2. (SBU) Begin text: 
 
The Government of Maldives practices generally good economic 
management.  It has not achieved a high degree of budgetary 
transparency, but this is due to capacity limitations, not lack of 
will. 
 
Maldives' existing budget process and public accounting system were 
introduced more than three decades ago and are in the process of 
being modernized.  The budget papers are usually prepared in 
December of each year for submission to the Parliament and comprise 
the past year's performance, current year's status and proposed 
future budget proposals.  Budget documents in the vernacular 
language, Dhivehi, are posted on the internet.  Budget documents are 
not available in English on the internet.  The financial legislative 
framework is not comprehensive.  Under the current legislative 
framework, no annual financial statements regarding the government's 
financial position and status are reported to the parliament and no 
audited financial statements are prepared.  The annual accounts and 
information are included in the budget papers.  Only a limited 
accounting reporting structure exists.  Not all transactions are 
reflected.  The accounting system used in atoll (sub-national) 
administration units is highly inefficient, leading to excessive 
holdings and movements of cash.  Maldives has developed and 
publishes online a development assistance database, which tracks 
foreign aid. 
 
The Maldives constitution gives broad powers to the executive branch 
in performing most of the core functions relating to budget 
management, planning, execution, monitoring and evaluation.  Recent 
legislative initiatives aim to improve financial management and 
regulatory reporting.  A new Public Finance Act defining the legal 
framework for an improved budget process passed in 2006.  A new 
Audit Act creating an independent Audit Office came into force in 
2007.  The first Auditor General under the Audit Act was appointed 
in December 2007.  The Auditor General is appointed by and reports 
to the President and the Parliament.  The power of budget approval 
rests with the legislature. 
 
The Government of Maldives has initiated a program to modernize its 
public accounting system to enable it to improve financial 
management of the public sector, enhance public sector governance 
and strengthen its accountability.  A diagnostic phase, with 
technical assistance support provided by the Asian Development Bank 
(ADB), was completed in 2002.  An implementation phase of the 
Financial Management Reform program began in 2006 after passage of 
the Public Finance Act.  It focuses on implementing an integrated 
public accounting and financial management information system.  This 
system includes features for publication and broad dissemination of 
reports on managing, monitoring and evaluating budget processes. 
The United States has contributed to this effort by allocating 
$425,000 of its $10.6 million tsunami reconstruction grant to the 
Maldives' public accounting system reform program.  In addition to 
the ADB, the World Bank and the IMF are the major supporters of this 
program.  The ADB has also recently approved new technical 
assistance projects for strengthening economic and financial 
management, debt management and project management. 
End text. 
BLAKE