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Cablegate: Mali's Input On Report On Fiscal Transparency

VZCZCXRO6971
RR RUEHMA RUEHPA
DE RUEHBP #0236/01 0660854
ZNR UUUUU ZZH
R 060854Z MAR 08
FM AMEMBASSY BAMAKO
TO RUEHC/SECSTATE WASHDC 8845
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHLMC/MCC WASHINGTON DC 0110

UNCLAS SECTION 01 OF 02 BAMAKO 000236

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON PREL ML
SUBJECT: MALI'S INPUT ON REPORT ON FISCAL TRANSPARENCY

REF: STATE 016737

BAMAKO 00000236 001.2 OF 002


In response to reftel, Embassy's input on the
Congressionally-mandated report on fiscal transparency in
countries receiving USG assistance is provided:

-- Is the host country's budget made public?

Yes, it is made public annually.

-- If so, through what medium?

The GOM publishes a complete volume following the approval of
the budget at the National Assembly.

-- Are all revenues and expenditures included in the
publicly-available budget?

Yes, they are included in the budget.

-- How meaningful and accurate is the information?

We believe that it is meaningful and accurate; the IMF must
approve the drafted document prior to its adoption.

-- If a country is weak on fiscal transparency is it due to
capacity or lack of will?

The higher levels of the Malian government have expressed a
will to improve transparency, but complain of a lack of
capacity to provide oversight over the entire process.
USAID's programs help in capacity building. Also, the GOM
would like to conduct audits more frequently, but lacks the
trained accountants and resources. The Auditor General has
requested more training on several occasions to improve their
services.

-- Are there any USG programs to strengthen the host
country's capacity to develop sound fiscal policies and that
support transparency and good governance?

USAID Mali's Shared Governance Program works directly with
elected mayors, local government officials and civil society
organizations to develop financial management systems,
including tax revenue tracking, budget development and
tracking, and accounting systems. The approach uses local
radio stations to reinforce transparency and ensure that
residents of the communes are fully aware of how their taxes
are being used. The program has already demonstrated some
success in increasing tax revenues for local communities.

-- Are there other donor countries or multilateral
institutions providing assistance in these areas?

The Canadian and German development agencies have similar
programs (based largely on the USAID Shared Governance
model). Other donors, including the Dutch, European Union,
French and the World Bank support Malian financial management
programs through budgetary support.

-- Has the country volunteered for the IMF to report on the
country's compliance with standards and codes covering fiscal
transparency?

Yes, the IMF reported on Mali's compliance with standards
covering fiscal transparency in February 2002.

The IMF reported that "Mali has made progress in recent years
in increasing the transparency of government operations. The
legislative base underlying the budget is very extensive.
Some modern developments in budgeting, such as the
preparation of program budgets that focus on government
objectives, have become institutionalized as part of budget
preparation (although the organic budget law has not been
modified to include the tendency toward focusing on budget
outcomes). The budget document presents a clear description
of the fiscal and economic outlook, although a full-fledged
medium-term budget framework has not yet been developed.
Mali's Finance Committee of Parliament plays an important
role in examining budget estimates.

"Good quality monthly data on central government expenditures
on a payments orders basis are available within ten days
after the end of a month. However, longer delays are
experienced in obtaining fully comprehensive fiscal data,
especially for foreign-financed projects. Most periodic
fiscal reports are not published, but interested observers
generally may obtain them. Internal audit institutions are
quite effective -- they have revealed past irregularities,
which are being addressed by a high-level anti-corruption
committee. In contrast, the external audit agency is
particularly weak and annual accounts of government are

BAMAKO 00000236 002.2 OF 002


examined with many years' delay because of insufficient
resources." (Note: the Auditor's General office was created
in 2004, following this report, and has been more effective
at uncovering irregularities.)

The Malian authorities state that they are committed to
improving fiscal transparency further. The IMF proposes
that, apart from speeding up the production of monthly fiscal
reports, efforts should focus on four areas, prioritized as
follows: (i) establish an effective external audit office and
further strengthen internal audit; (ii) improve further the
budget preparation process; (iii) address weaknesses in the
legal framework governing the budget; and (iv) provide the
public with more information on government finances.
MCCULLEY

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