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Viewing cable 09COLOMBO378, MALDIVES: FISCAL TRANSPARENCY REPORT

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Reference ID Created Released Classification Origin
09COLOMBO378 2009-04-02 06:16 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Colombo
VZCZCXRO7189
RR RUEHBI RUEHLMC
DE RUEHLM #0378 0920616
ZNR UUUUU ZZH
R 020616Z APR 09
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 9732
INFO RUEHKA/AMEMBASSY DHAKA 1510
RUEHIL/AMEMBASSY ISLAMABAD 8501
RUEHKT/AMEMBASSY KATHMANDU 6738
RUEHNE/AMEMBASSY NEW DELHI 2862
RUEHKP/AMCONSUL KARACHI 2476
RUEHCG/AMCONSUL CHENNAI 9150
RUEHBI/AMCONSUL MUMBAI 6471
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION
UNCLAS COLOMBO 000378 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EEB/IFD/OMA JULIA JACOBY, SCA/RA, AND SCA/INS 
 
E.O 12958: N/A 
TAGS: EAID ECON PGOV PREL MV
SUBJECT: MALDIVES: FISCAL TRANSPARENCY REPORT 
 
REF: (A) SECSTATE 28885 
(B) 08 COLOMBO 237 
 
1. (U) The following is in response to ref A request for information 
concerning Maldives' compliance under Section 7088(c)(1) of the 
Department of State, Foreign Operations, and Related Programs 
Appropriations Act (SFOAA), 2009 (Div. H, P.L.111-8).  Responses are 
keyed to ref A questions. 
 
2. (SBU) The central government of Maldives is receiving FY 09 U.S. 
foreign assistance funds. 
 
Public Availability of Budget 
------------------------------ 
 
3. (SBU) 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 
presented 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 in English are not available 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 developed and published an online development assistance 
database which tracked foreign aid; however, it is no longer in use 
due to lack of funds. 
 
4. (SBU) 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 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. 
Post's assessment of the extent to which the publicly-available 
budget accurately reflects actual government incomes and 
expenditures 
--------------------------------------------- ---------- 
 
5. (SBU) Maldives does not strictly follow the IMF's Government 
Finance Statistics (GFS) format when reporting its budget.  For 
instance, loan amortization is included as part of expenditure. 
Revenue is overstated, as it includes grants and privatization 
proceeds.  Line items may also not reveal full details. 
Nevertheless, post has no indication that the government is trying 
to intentionally mislead the public or donors regarding its budget. 
 
 
BLAKE